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SPONTANEOUS STARTUPS (PART 2): Learn from a real $300 million example

Spontaneous Startups just happen. Often very well.

Today I'll share an amazing example of a real new enterprise that spontaneously rose from nothing to sales of over $300 million (and climbing).

EXAMPLE

The startup is Wayfair.

Its on-line service sells "everything for the home."

Why don't you know about them? That's part of their story and it's a clever one, filled with excitement, risk and extraordinary success.

I highly recommend you read the well written story (just click on the Wayfair link above) in which the two founders, Niraj Shah and Steve Conine, tell how they moved from startup idea to startup idea until one day they found a very special idea for their new enterprise would become Mayfair. It simply "occurred to them".

As you dissect this amazing saga (it took years and a lot of hard work), keep the following characteristics in mind, they'll help you glean extra value from your thinking, they will generate things to apply to your own startup:

• Stalled with several startups, bailed (wisely) one after the other, until they got The Big Idea.
• Took no venture capital until success was very clear, years after starting.
• Stayed focused, did not get distracted during early formation years.
• Looked and looked and looked for a better idea than the one they had at the moment.
• Techies made the move to marketing savvy as a natural consequence of their processing of ideas.
• Settled on a very simple idea, yet one with huge potential.
• Bold vision: "determined to think big -- really big."
• Flanking Strategy: moved into uncontested territory, a new market not yet dominated by a Gorilla.
• Profitable from Month One.
• Quick to follow successful step after successful step (and to not repeat failures).
• Creative with cash flow management.
• Learned how to do the (retail merchandise) business by doing it.
• Avoided attacking Gorillas.
• Figured out what customers were frustrated with, solved that problem.

I'll leave the rest of the story thinking up to you. Read, think and repeat several times how you analyse this Wayfair story. Each reading offers to you the chance to glean a fine harvest of stimulating ideas for how to do a Spontaneous Startup.

BOTTOM LINE: Wayfair is a find example of how to do a Spontaneous Startup. You can do the same. Study the process the founders went through. That is where the low hanging fruit is waiting for you. When you "get it", you'll know the secrets that made serial entrepreneurs serial winners. And you'll be able to use your idea to build an unfair competitive advantage.

I wish you The Best on your Adventure!

TWIST YOUR STARTUP IDEA UNTIL IT SOLVES A BIG PROBLEM: "Better" is living death

This past week I was working with teams of four or five techies in my startup Entrepreneurship class at Cornell University.

What struck me was how tricky it is to get techies to see the difference between "better" and "BIG".

Great startups find BIG problems to solve.

Companies that get started and go sideways focus on making something BETTER.

Words ending in "er" are four letter words to VCs and experienced startup employees: faster, better, cheaper are not firing up their eagerness to join your new enterprise.

The founders who focus on solving a basic problem that ails a huge number of people produce the great startups. That takes courage and conviction, confidence and determination. There is a lot of emotion in making that decision.

To test your idea, ask yourself "Has this been done before?" Then ask "What that is similar has been done before?" Great ideas for startups find that idea is fresh, new, has not been done before. And the similar solutions are old generations of clunky solutions. You want to move from a ho-hum idea on to one that is very exciting, that has a lot of "WOW!" in it.

TWIST YOUR IDEA : 

Use your first idea to begin a process of altering it week after week, twisting it into different forms that solve different problems. That twisting process will advance your initial idea, most likely shifting it to focus on a very different problem to solve. That is what serial entrepreneurs are terrific at doing.

EXAMPLE:

Here is an example for you to think about: "Build a better game" is not going to lead your startup to greatness. But as you ponder building new games, you realize there is big decision you have to make: On what devices (computers, game boxes, smartphones, pads) should your game run on? It is a lot of work to make a game run on one operating system and one device. How about a dozen in various combinations? Now that is a BIG problem needing a solution.

So how about creating a language that can be used to build one game that works on the many different devices?

Sounds great!

But hard to do (good barrier to competitors).

That is Exciting!

And yes, there is a startup that is focused on doing just what I have mentioned. It is Game Closure. The company has built HTML5. It is a set of standards that lets Web browsers understand animations, videos, graphics, and other multimedia content without the need to download a plug-in like Adobe's Flash.

You can imagine how you might have come up with this idea yourself: as a game developer you grew frustrated at the basic problem of cross platform game playing software coding. You set out to solve it with a couple of ways, tried a few in the lab, kept on thinking and twisting your idea, and then "presto!" you get the idea that we have just discussed.

That is how to move from an initial idea to a great idea. Twist your first idea round and round until it transforms into a solution for a really BIG problem.

That is how you attract the great people and great financial backers.

BOTTOM LINE: Beginning with your initial idea, start twisting it and keep on going until it becomes -- in its transformed shape -- a solution to a BIG problem. That will be the foundation for building an unfair competitive advantage. It is how serial entrepreneurs do it. So can you.

I wish you The Best on your Adventure!

STARTUPS 2012: How should a founder get prepared?

One thing is clear from the 2012 Consumer Electronics Show: millions of people are eagerly seeking to find and ride one of the next big waves. The competitors include the Giant Global Corporations as well as Startup Founders. Mobs are forming, milling about, seeking the fresh waves to surf.

My bet is the Startup Founders will spot the next set of waves before the Giants Corporations do.

Somewhere in the confusion and scrambling about smart televisions, content management, pads and phones is the seminal energy that will start the fresh waves lifting. From hundreds of miles away you can feel the CES energy radiating, pulsing around the globe.

BE PREPARED

So what should the wanna-be startup founder do right now?

Simple: as the Boy Scouts motto says "Be prepared".

Here is what serial entrepreneurs do at this early stage in the phase we are in:

• Start with a bold idea. The key word is "bold". Your initial idea is going to change rapidly. But it always has to be bold so it has enough power, reach and attraction to stand out from the intensity of what everyone else is talking about.
• Secure your Buddy. You have to have at least one more close friend to help work through all the changes your initial idea is going to go through. In the biography of Steve Jobs, that person was Steve Wozniak. Google was two friends. Solo is for pilots, not entrepreneurs.
• Pick a wave to ride. Look, think, decide. Go for it. The early waves will change as they form shape. Your job is to continue to change your initial idea so it begins to ride the forming wave. Be careful to not get ahead of the wave (it will overtake and crush the too-early surfers). Be careful to not be too hesitant (you'll be behind the half dozen front runners and find it hard to overtake them).
• Change, changed, change. You are working with head knowledge at this point in the process. It's quick to alter, even abandon the inital idea. I've watched entrepreneurs abandon one, two, three ideas on their way to the one that launched the startup. That takes guts. And smarts.
• Build your resources network. You are going to need workers and money and lawyers and related services. Contact them, even if you do not yet have a company started. You will learn a ton of great things from short meetings with them, phone/Skype chats. Talk, don't email. Get personal. Get smarter from those smart people. Every question asked of you demands an answer. Soon you will find yourself working on solutions for issues about your fast changing idea. And it cost you nothing but a bit of time.
• Start documenting your Executive Summary. One page. Everything about your idea that you know up to this point. This document is living, it will morph week after week as you make change after change. Writing forces you to make decisions, guess at unknown numbers, be confronted with problems that must be resolved. This is a discipline (based on an old Greek word that means "dis-is-no-fun").
• Plan the construction of your first product/service. On paper. With numbers. And dates. And resources required. Sketch it. Use the resulting costs to start your first cash flow requirements. Add that to your Executive Summary. Keep it simple. The engineers can later dive into the details of how to do their magic.
• Look for the "WOW!" in your idea. You have to have WOW! to stand out from the crowd. It has to be hyper-compelling to end users. This is central to your success. Without it, step aside and just watch.

That will keep you very active, focus your thinking, force you into making important decisions.

BOTTOM LINE: The next waves are forming as you read this. Your job is to prepare to ride one to the beach and win big. Serial entrepreneurs use the above process of continuous change to get their minds ready for creation of the company. This is a matter of months, not days, but time will fly and so should you. Your objective is to get ready with an idea that will attract the resources required to form the company and build an unfair competitive advantage as you ride a fresh wave that lifts you higher and higher as it grows global momentum. That's how serial entrepreneurs do it. You can do the same.

I wish you The Best on your Adventure!

STARTUP FOUNDERS LEARN FROM YOGI BERRA

Today's Wall Street Journal featured Yogi Berra's response to watching the movie "Moneyball". Reporter Jason Gay notes that during the discussion following the movie, this scene took place:

Of course, there are his famous Yogi-isms, jumbled koans which will live forever. Halfway through dinner, a woman in a black coat sweeps over to the table and leans into Yogi.

"Excuse me, could I be very rude and say hello?" she asks. "I'm an international opera singer and we use 'It ain't over 'til the fat lady sings' at least once a week, and I think of you every time."

Yogi smiles.

"For clarification, he didn't say that one," David Kaplan interjects. "Yogi said, 'It ain't over 'til it's over.'

"Oooh—well, I love that one too!"

 =============

I find the veterans of new enterprises chant the mantra, "It ain't over 'til it's over."

They have found that keeps them focused on a final victory during the month after month slog of morphing from first idea to First To Get It Right.

It sure gets discouraging at times for entrepreneurs. There is so much action in every new space, it arrives so swiftly, that new markets look like (as I emailed a serial founder last week) "The new space has been carpet-bombed!".

That means a couple of dozen startups (prior to yours) have been attempting to "go viral", to "scale", to finally get repeated use of their app/product/service. And yours has to stand out in order to attract the resouces it requires to become The Gorilla of the new space.

"At last, we have momentum on our side!" is what the startup veterans all focus on. That is the name of the game, because when that happens, the energy builds on itself, your Great Thing is eagerly sought by customers, and you shift from hard selling, to furiously taking large orders. You are then "In the tornado", being propelled higher and higher.

But to get there you have to have a special mix of courage, determination, innovation and wisdom.

Yes, there are often moments when it is best to throw in the towel, shut the business down and start over with a new idea.

More likely, you will be challenged by the milling herd of new enterprises in your new space, stimulated to figure out how to morph your latest version of your idea into the one that "takes off" at last.

This process is very difficult to go through. The pain is unavoidable. Like the butterfly that must struggle out of its chrysalis to get strong wings so it can fly away in all its majestic beauty, so you too will have to go through it all.

So while that transpires, remember the wisdom from a very successful coach of very talented people, "It ain't over 'til it's over".

BOTTOM LINE: Startup CEOs learn they must go through a very difficult process to move from first idea to the winner's podium. While you go through that, recall the Yogi-ism, "It ain't over 'til it's over." Serial entrepreneurs know what that is about. When you do, you'll be well on your way to building a powerful unfair advantage.

I wish you The Best on your Adventure!

WINNING STARTUPS MORPH FROM FIRST IDEA TO WIN: Consider the example of Jennifer Dulski and The Dealmap

Winning startups cross the finish line looking very different than what their founders imagined on Day One.

I have found the histories of famous (and lesser-known) enterprises support that finding.

• Facebook moved from males ogling local college women to the global social networking gorilla.
• Google morphed from search engine to on-line advertising behemoth.
• Intel climbed the value added ladder from individual transistors to integrated circuits to complex microprocessors.
• Think how different Apple has become from its first personal computer days.

What started out ends up very different.

That's a characteristic of startups that serial entrepreneurs quickly learn.

EXAMPLE

Last week I listened to an impressive founder whose hard work and wise decisions led to some recent significant success. I've had the privilege of watching her leadership in action over several years and have concluded that the company's history also maps the above startup characteristic.

I was attending a Cornell Entreprenerial Network event in Silicon Valley and on the discussion panel was the founder and CEO of The Dealmap, Jennifer Dulski. She recently sold her startup, The Dealmap, to Google. 

Her success is the story of a determined and very able first-time founder CEO who began with an idea for a new enterprise and ended up with a very different -- and winning -- business. She showed that it is not too difficult to get started, but it definitely is difficult to grow an idea quickly into a very large enterprise.

The process she followed I label a "startup morphing". She began with Business 1, launched it, watched it grow, assessed its future and decided to significantly alter that idea into what became Business 2. (Bear with me as I make my point with these simplified examples -- leading real startups is both complex and very difficult).

Business 2 was launched a short time thereafter and like its predecessor, was modest in its appeal to users, yet also was growing and moderately popular. So Jennifer made another decision, to morph from lessons learned and launch Business 3. That one became The Dealmap (now owned by Google).

All this took place in less than four years. Fast, yes indeed. Successful, right again. Different than the first idea, you bet!

That is how it is done.

And it is being done right now all around this planet. (I just got an email from a serial entrepreneur I've been following: "We've gone viral!") That's Business Number 3 for him.

BOTTOM LINE: So that's how it's done in the real world of real startups. The first idea is just the starting idea. What you end up winning with is going to be very different than what you began with. Veterans of new enterprises make on-the-fly changes, morphing from change to change until they have The Great Thing that propells the lastest version to greatness (It's got "WOW!"). That startup morphing is a special skill they use to build their unfair advantage. When you can do that, you'll stand out from the herd competing for employees, venture capital and customers.

I wish you The Best on your Adventure!

DAY ONE STARTUP FOCUS SURPRISES: What should be done and how?

Did you recently launch your first product/service and get surprised at who is using it?

Are you finding the users/customers widely spread, far flung from whom you expected?

Are you wondering in which direction to now move your startup?

Those questions are asked daily by entrepreneurs who have proudly launched their first product/service. Anything can happen after First Launch, including a lot of unexpected end users, customers, blogger comments and strategic partner reactions. The surprises lead to doubt and pondering by the CEO founder. The above questions pop up. Deep emotions are stirred in the souls of the Core Team members.

The related issues are important and need immediate responses. Like the newborn child, the fresh startup that is beginning to struggle needs swift attention before it becomes ill.

TIPS FOR RESPONSE TO FOCUS SURPRISES

Today I'll make some suggestions from my experiences with serial entrepreneurs, those intrepid souls who continue to figure out what to do to a fledgling enterprise so it grows with good health, very fast.

I'll begin with an edited email that I received today from a first time entrepreneur and then I'll show you the tips I sent.

ENTREPRENEUR'S EMAIL INQUIRY

We built the product and just went live a couple of days back! Please check us out when you get a chance at [NEW COMPANY ("NEWCO") WEBSITE] -as planned we are doing this pilot in New York. What do you think of the product? Btw, we also have one transaction in already.

I wanted to email you and see if I could interest you once again in advising me. This time it would be about how to maneuver NEWCO to success. This is very exciting milestone- seems like we traveled a long way from the idea we had 3 months back - but we understand that the first iteration of the product is only an artificial milestone! Now comes the part when how artful we are in discovering and validating our core customers will make all the difference.

I need some advice and guidance at this point. As you can see right away from the initial few services offered, NEWCO does not have one strong identity - people are offering all kinds of things from organic flour to management consulting advice on our service platform. We originally thought of this as a place where people can [proprietary service of NEWCO] and I think we are convinced we have people who will want to use the site. But who will be our core buyers - whom should we focus on? It's getting tricky. This might seem like a basic question, or perhaps we should have already known the answer to this by now? If you have any pointers/thoughts/suggestions that'd be really helpful!

STARTUP COACH REPLY

Hi Kim,

Always pleased to view a fresh entrepreneur in action, especially one from Cornell.

My advice for you today is to “Think about what you want people to think about first when they recall the name of your business.”

That will help you Focus.

It will lead you to the Marcom Messaging that will brand your company over time.

What do you want your company to stand for?

Then compare that to related new enterprises. There are a lot more these days working on a business model similar to yours. That will help you with your Competitive Positioning.

 Hope that is helpful.

JOHN

BOTTOM LINE: Get ready to alter your expectations as soon as you launch your first product/service. Surprises are most likely to happen quickly. Dissipation of focus is the enemy. Chasing every rabbit is unproductive, and leads to dwindling of scarce resources. Instead, serial entrepreneurs stand back while collecting the latest pattern of end users, customers, blogger comments, and strategic partner input. Then they analyse the findings and choose a focus for the new enterprise, one often very different than first planned during pre-launch days. The fresh input is then crafted into a revised (often very different) marketing communications message that is compared with competitors and modified further. The end result is a Positioning Plan that becomes a powerful element in constructing an unfair advantage based on delivering a product/service so compelling to end users that they shout "WOW!" and start Tweeting immediately. Serial entrepreneurs know this is very hard work that kicks up powerful internal emotions, but it is vital to do this swift response very well. When you can do that, it can lead you to become one of the great veterans of real startups.

I wish you The Best on your Adventure!

STARTUP DUD: Find a new use for the engine/technology

"What do you do when you launch your app and end up with 100 users?" That's the central discussion point of my talk this morning with a budding, bright entrepreneur.

What should be done next seems obvious at first to many observers: Stop.

• But if you've put in two years of no-for-pay work with two other guys, giving up is not easy.
• So when should you stop?
• What should you do with what you've built?
• What can be done to succeed in spite of the dud on launch?

Yes, even the best, the world-class pros launch products that are duds. Dead on arrival. Go nowhere. Get slammed by the bloggers. Get Twitted to death, mercilessly.

For a touching example, so you get the picture, look at a story about the film Conan the Barbarian (dud). It was sent to me by a serial entrepreneur I greatly respect (Thanks KT). Read and think a moment about how the lead writer went through the post-launch-blues. Download Conan Writer Describes His Emotions to a Boxoffice Failure.

1. So the first lesson is: Expect less than a spectacular win. Remember, startups are statistically going bankrupt (i.e. over 60% of venture backed new enterprises go out of business). Good news: you are not alone. There are a lot of others you can learn from out there, they'll help you step on fewer startup landmines. Start talking to them.
2. Next: Start thinking about what you could do different (VERY different) with what you have built. Here is a metaphor I often use with techies: "Okay, let's admit the idea is a dud. So what do you have to work with? Technology you say? Well,think about it as an engine. Then start looking for what vehicle you could put that engine into: passenger sedan, SUV, light truck, spare generator, green machine, and so on." Here is where you have to have guts, think boldly, take whacks on the sides of your heads, brain storm, do out of the box. Often the Second Time Around produces something Great.
3. After this, test each New Idea for how much "WOW!" it has (compelling reason for the end user to use/buy). This is classical startup work fron here on. I'll not dwell on it here.

My point for the day is simple: Even the Hollywood greats launch duds. So do serial entrepreneurs. You can use such events to make a decision about what to do next.

Sometimes it's best to close shop and find a job (e.g. wife expecting second child, parents aging needing closer attention, have less than 6 months rent in the bank).

More likely it is time to intensely search for something very different, something to apply what you have built, something to solve a Really Big Problem (that others have overlooked - see my August 22 blog on Flanking).

All of this is part of being lost in The Wilderness of Undistinguished Startups. Your Core Team now has to have the courage to know you are lost and screw up the guts to think boldly to find a way out.

BOTTOM LINE: Launching a dud is common. When it hits you, get through the emotional process of accepting reality and depression and recovery. Then you can start to get creative and figure out what to do with what you have built. That's how serial entrepreneurs think and behave. It's part of their DNA, what they use to build unfair advantages.

I wish you The Best on your Adventure!

STARTUP MANAGEMENT: Example of how easy it is to get started (but what comes next?)

It is easy to do a startup.

Yes, easy.

Open a web site and you are in business.

Write some software code, post an App on Apple or Amazon and you are ready to start selling, taking in cash.

Starting is easy.

The Big Question is "What do we do next?"

In other words, “How do you make a business out of the new product?" "Should you do a quick sale for cash or strive to construct an enterprise that will endure, prosper and grow to significant size while competing with gorillas and other aggressive new enterprises?"

For a real life example, try this one that I spotted today: Groupchat.tv. It is an app that was created over one weekend by experienced techies participating in a hack gathering in San Francisco. I enjoy seeing such enthusiasm and creativity blosssom. I sense that the team has a chance of coming up with Something Great in the near future.

So let's use this to help your thinking about "What next?"

Here are some actions you might expect of entrepreneurs who have launched an app that is easy to create:

1. Sell it ASAP! for Quick Cash! Find a company with lots of cash.  Emphasize "Faster time to market" ("Buy it before your competitor does or [copies ours]!"). Sell it for a bit more than their engineering team would cost to build it. Take their cash, pay your taxes, and think about "your next gig." Time Span: 1 - 3 months to cash in the bank, after launch of the new thing.
2. Launch, Grow end user base (demonstrate "traction"), then Sell at a Higher Cash Price. This takes some cash (pay for the servers and related service each month), plus $ to fuel your people (you and a friend or two) who have to have some cash to live on (personal savings most likely, or a girlfriend with a steady job). Time Span: 6 - 9 months including 2-3 months to find the eager buyer and negotiate a reasonable deal.
3. Launch, Grow the user base to a Significant Level (perhaps 1 million users), then Sell at a Significant Price (might include some stock of the Buyer). This will take a lot more cash to get there. You are going to have to starve a long time ("Sweat equity") or find an angel to do a  Seed Round. Time Span: something like 1 to 2 years = 3-5 months to find the angel cash; overlapping will be the 9-18 months to ramp up the end user numbers, plus 3-5 months to negotiate a "good deal".
4. Plan on doing Classical Venture Rounds to win Gorilla status and march on to IPO. This plan begins with a Seed Round, followed by growth cash from a multi-million dollar A Round and most likely a follow-on B Round double the size of the prior round. Time Span: This is the 5 Years to IPO Classic model. 

So pick your plan and go for it. The potential $ ROI for you is "One more zero in value for each of the 4 Alternatives above. For example, if you think you can get $X00,000 for Number 1, expect $X million for Number 2, $XX million for Number 3 and $XXX,000,000 for Number 4.

Here is another way to think about "What do we do next?": Get started with Number 1 and in a few months you may change your mind and do Number 2. And so on it might go for you.

BOTTOM LINE: Thinking about "What do we do next?" with your creation will add realism to your life. Starting a new enterprise is easy. Building it into something great takes a lot more effort, people, cash and risk-taking. Serial entrepreneurs know that. When you do, you can plan on what to do about building an unfair advantage and cashing in on it.

I wish you The Best on your Adventure!

STARTUP MANAGEMENT: Founders share their insider's story

Last evening I enjoyed an entrepreneurial event in San Francisco sponsored by Cornell University. Three founders of growing startups shared stories of their adventures, slogging through the jungle of new enterprises.

Cornell Silicon Valley (CSV) in partnership with the Faculty of Computing and Information Science (CIS) present:

Startup Stories: The Good, Bad & Ugly

Wednesday, August 10, 2011 - San Francisco 

     

                            

ASIDE: If you are interested in learning entrepreneurship and/or one of the world's finest universities, I highly recommend Cornell. Its depth and breadth of startup courses will blow you away. The 18 month Masters of Engineering program is top of the world (check out Computer Science and Electrical Engineering. Amazing professors, all new buildings). And I teach Entrepreneurship for Scientists and Engineers at Cornell whose Johson Graduate School of Management has delivered corporate leaders around the world. Its Entrepreneurship and Innovation Institute is another example. Cornell graduates are among the ranks of world-class venture capital firms and startups that have gone public. End of commercial, time to get back to the point of this blog.

TIPS FROM THE EVENING'S FOUNDERS 

Here is what I heard from the four respected, experienced startup founders:

• It's hard to go solo. Alone is very alone. Best to take more time to find great people to co-found with you, form a Core Team.
• Avoid getting stuck in the startup rat race ("I coded last night until 3:oo a.m., got some sleep, woke at 7, checked emails, was back in the office by 10:00 a.m. Started doing marketing things, expect the day to repeat itself.")
• When looking for co-founders, only select people you trust and know well.
• Determination and "scrap-iness"get you attention from investors.
• You will often be confronted with "This is not going to work out." That's when the hardest decisions are made for a startup.
• Do not be dependent on "key employees". They can hold you hostage to "more cash" and "more stock". (Blackmail).
• Strong personalities in employees leads to confrontations about you, the founder, which can be helpful ("They tell me the truth, especially about me.") yet frightening.
• Founder CEOs get pulled in all directions, all the time. The job is ever changing, shifts radically every six months.
• Big Decision Time -- Black Days -- Depression: "Who do you go to then?" You have to have people to talk to. Mentors and coaches help a lot. Best are peer level people (other founders of startups).
• After launch of first product, expect to shift to half time improving the product and use the other half to build your management team. Managing people becomes number one in rank of importance.
• Pay attention to details. "Where are the legal docs showing you own the company logo?" and other due dilligence questions (from investors) require answers, and thus demand care for details from Day One.
• The Early Days are totally consumed trying to figure out "What is our market? What do customers want, are they the wrong ones to focus on, what in the product has to be changed?" The list goes on and on. Chaos. Expect it.
• Creative actions in the Chaos stage lead to priceless answers. "They came to get their free flashlight and told us a a ton of things we needed to understand." "We listened to five end users and changed our user interface back to the first format (we had "improved the UI and they hated it."). "By accident we discovered we got free PR only after the customers paid for the product -- they did not want it for free!"

Those are some of the highlights. Note the human factors emphasis on responses to questions from the audience. That in itself is a Tip: As one founder CEO put it, "You don't get much training on how to manage people when you are coding 18 hours a day."

Note also the urging of budding entrepreneurs to start connecting with other active entrepreneurs. Such networking takes time but is worth it, some would say it is vital to success.

BOTTOM LINE: Listening to othe founder CEOs talk about their adventure in the jungle of new enterprises is where you begin your journey. Gathering tips, connecting with real people and thinking creatively lead to momentum. Career focus on how to manage people along the way will make you stand out to potential employees and investors by the time you are ready to do your first startup.

All of that can be done anywhere around the globe. You can be in Dubai, Mumbai, Shanghai, or Mami and do all of it. You don't have to be in Silicon Valley (but if you can, it's a great place to learn entrepreneurship from real people).

So think about the tips above and digest them. Work on your personal plan to move on from where you are, using the Tips to speed your time to market and reduce your risk of failure. That's what serial entrepreneurs do. It's how they build their unfair advantage. You can do the same.

I wish you The Best on your Adventure!

START-UP CEOS CAN TAKE ADVANTAGE OF IPO MANIA: Understand the underlying economics and use it to your advantage

This is the pattern of the wave that start-ups ride, from birth to peak to bust. It was documented by the late MIT Professor Kindleberger, based on his research from tulip mania to modern times.

The wild IPOs of LinkedIn and then Yandex are signs of the Mania phase in action. You should already know the numbers and valuations, so let's move on to the point of this blog.

What can entrepreneurs do to take advantage of such as wave? Here are some tips from serial entrepreneurs:

• The now-rich VCs are racing to get fresh money (before the bubble pops) to invest. Look for recent funds raised and go after the green cash, it's eagerly looking for the next great thing.
• The IPOs have spawned rich individuals with lots of cash in their hands. Some have worked more than a decade to get rich and will now "stop working" and do something else. They often become the new wave of angel investors. Read the IPO documents to find the names of the large individual shareholders. Knock on their doors (yes, at their homes) and pitch your deal to them. Great start-ups have gotten going that way.
• High IPO valuations favor start-ups. $8 billion Yandex and $4 billion LinkedIn are the balloons lifting the numbers higher and higher. Investors are looking for "really big deals". Your forecasted numbers must support their dreams. Your sales and valuation in five years has to be very large. Spend time, do your homework, generate large numbers. Change your business model if you have to.
• Be bold. This is not a time to be "conservative" or cautious. Use the same confident language the VCs and super angels are using.
• Be confident. This is time to choose which great investor you want for your next round. All of them are eagerly looking for a great start-up. They are intensely competitive with each other. Get them competing for your deal. Such competition is the entrepreneur's best friend.
• Be smart. Plan your campaign to raise your funding. Choose your investors carefully. Select only the best. Prepare for intense, fast negotiations.

All of this requires a lot of work by you. The numbers have to be generated. Yes, they are dream numbers, but hey, so were the numbers shouted out by founders of Facebook, Google, and Yandex when they got their first money. So come to presentations with investors prepared to talk about "How large could this business get?" The larger the better. It's your business, you know better than investors how large it could become.

BOTTOM LINE: Take advantage of the current IPO boom. Use its energy and underlying wealth creation economics to get the deal you want for your next round of financing. Do your homework. Generate your numbers for sales, customers, etc. Prepare your discussion about how large the business could become. Then get investors competing for your deal. When you can do that, you'll be well on your way to building an unfair competitive advantage.

I wish you The Best on your Adventure!