Preface
The purpose of this book is to address the needs of every technical entrepreneur who dreams of turning their passion and application ideas into a successful business. They need to know where to start in taking the idea from a concept to a product, incorporating the business as an LLC or C-corporation, finding the funding required to complete development and roll out the product, and how to build the team they need for all the marketing and delivery tasks, and all the details in between.
Equally important, the book will provide tips on how to network for partners and investors, communicate effectively with customers and employees, organize your business infrastructure, and have fun at the same time.
The entry cost for technical entrepreneurs to develop new applications is at an all-time low, with inexpensive yet powerful new software toolkits and hardware platforms. With the advent of smartphones and new web technologies, the application opportunities are huge.
At the same time, crowd-funding is adding a whole new dimension to the funding challenge. Old and new funding sources are discussed in detail, including the new alternatives with crowd-funding, as well as the implications of Angel funding, Super-Angels, and VCs.
The guidance is intended to be pragmatic and practical, rather than theoretical, based on my own many years of experience working as a developer, small software company executive, large company executive, mentor for startups, and Angel investor.
What this book covers
Chapter 1, Do You Have What It Takes to be an Entrepreneur?, sets the context for the book by providing you with a profile of entrepreneurs, who are markedly different from technical geeks that can write code in their needs and expectations and how they network and communicate. Through the more detailed discussion, readers have an opportunity to reflect on their own interests and passions, their strengths and weaknesses, and their ultimate success and happiness with the entrepreneur lifestyle.
Chapter 2, Does Your Dream Idea Have the Potential to be a Business?, helps you bridge the gap between a great idea and a great startup. I'm sure you all realize that there could be quite a distance between a great idea and a great startup. However, many people don't have a clue on how to bridge the gap. Some entrepreneurs are so caught up in their dream that they jump immediately into implementation with no focus on strategy and tactics first. The result is that when they hit the first obstacle (and there will be many), it seems like the end of the road. They don't have any idea which way to turn.
Even when your startup is a one-man show and lots of fun, a "business" needs some discipline and controls to keep it from being defined as a hobby by investors, and to assure some financial return.
Chapter 3, When, Where, and How Do You Formalize a Technical Business?, introduces you to the practical requirements you need to understand and execute to start a business. These include naming your company and product, the formalities of incorporation as an LLC or C-corporation, tax and liability considerations, and creating a website. In today's environment, this also includes how to use social media, writing a blog, creating an account on LinkedIn and Twitter, and an introduction to marketing.
Chapter 4, Does a Technical Entrepreneur Really Need a Business Plan?, discusses all the pros and cons of a business plan, and then tells you how to build one with all the basics, including surrounding elements such as a financial model and elevator pitch, without a huge cost or investment in time. The thought of preparing a business plan for the first time can be very intimidating. There are many "moving parts," and it's easy to get lost in the details. In reality, if you are not looking for investors, no business plan is expected by anyone. Yet I would suggest that creating one is still a valuable exercise since you need the plan as the blueprint for your company, team communication, and progress metrics, unless your management style makes this a waste of time.
Chapter 5, When and How Do You Find Funding for a Technical Business?, explores the most common and most productive approaches to get your startup moving forward. Of course, every approach has pros and cons. For example, with any outside investment, you give up some ownership and control, and with bootstrapping, your growth curve will likely be longer and more organic.
Money to build the business is the number one challenge for most startups. Don't believe the urban myth that you can sketch your idea on a napkin and professional investors will throw money at you. In reality, only 3 out of 100 companies who apply are successful with Angels, and the success rate with VCs is even lower. A large percentage of startups never apply to either.
If you are new to the entrepreneurial world of startups, you are likely confused by the terminology of seed-stage, lean startups, micro-VCs, and Super Angels. Don't be embarrassed since even professional investors are often confused these days by the new terms as well as old terms used with new meanings. In any case, this chapter looks at the options you really have and how to make them happen.
Chapter 6, After the Funding, How Do You Survive the Execution Risks?, covers details about patents and other intellectual property. A large portion of every startup's competitive advantage and potential value to investors is the size of your intellectual property portfolio. When someone says Intellectual Property (IP), most entrepreneurs think only of patents. In reality, patents are only one of many items that should be in your IP portfolio. This chapter explores the range of these items, helps readers understand the pros and cons of each, discusses cost issues, as well as value to investors, founders, and customers.
Chapter 7, Are You Ready for All the Leadership and Team Challenges?, explores the fact that creating and building a business is not a one-man show, even though it usually springs from the mind and determination of one person—committees don't start successful businesses. But turning an idea to a business success requires many people to work together effectively, and that requires entrepreneurial leadership.
Leadership is not a skill one is born with, but it can be learned and honed from experience and failures. Startups also require many different leadership skills, from technical to financial, so an entrepreneur needs to understand how to build the right team, work will all kinds of people, and provide communication and motivation to all.
Chapter 8, Do You Understand How Social Media is Changing the Business Landscape?, tells a new entrepreneur where and how to start using social media, as well as how to measure the impact, and make the required trade-offs between cost and value received.
Everyone is talking about how social media can help you jumpstart your business at no cost, and experts are springing up on all sides to help you do it at a high cost. So who do you believe, and what are the keys to success for any startup?
If your startup can't be bothered with social media or has no plan to take advantage of it, then you are definitely at risk these days with the new generation of customers. But simply jumping in is not enough. Before you start spending money and time being a user, you need to understand how it can help you and your business.
Chapter 9, If You Build It, Will They Find You, and Will They Use It?, focuses on the requirement for marketing in general, as well as the new rules required by social media and the overload of information bombarding potential customers via the Internet and traditional marketing sources.
Marketing is everything these days. You can have the best technology, but if customers don't know you exist or they don't know how your technology solves a real problem for them, your startup will fail. Yet I see many entrepreneurs that focus on the basics of marketing too little and too late.
Chapter 10, Can You Build the Relationships Needed to Succeed in Business?, explores the fine line between competitors and partners, and provides guidance on where, when, and how to find the right partners for growth and strength, without unduly risking your position with competitors.
New entrepreneurs are usually so focused on selling more of their branded product or service to their own customer base (organic growth) that they don't consider the more indirect methods (non-organic growth) of increasing revenue and market share. Non-organic growth would include OEM relationships, finding strategic partners, "coopetition," as well as acquisitions.
In all cases, the challenge is the same, of finding people that you can work with and enjoy in the business relationship. The relationship has to have trust, communication, and respect in order to work. Otherwise, like a marriage, it will be doomed to constant conflict, second guessing, and unhappiness.
Who this book is for
This book is targeted to young and first-time entrepreneurs who have a technical background and training, a great idea for an enterprise software product, but don't have experience or training in setting up a business, marketing a product, and managing the finances required.
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