How Critical Is Cloud Computing For Small Businesses And Startups

It is the wave of the future.

All the fascination about terminal hardware applications will be over in the near future. The "Cloud" and SAS will rock the hardware and software world and make access to technology easier for vast populations. Devices to do so will cost pennies on the current dollar or they will be free.

Like the PC makers, the sun is already setting on cell phone devices, associated applications, OTS packaged software and related products. Even though these products are enjoying current popularity They are expensive and will be rapidly overtaken by tight economics and services competition.

Smart,strategic planners are pointing to the future and it is not a hardware and licensed software market - it is service oriented with low cost access and rates. Volume, free products, advertising and shareware will drive it all.

Possible exceptions for a bit longer period of time are the high-end hardware and software technologies in government contracting, which for security reasons must be cloistered, protected and safeguarded. Your friendly government agency will be the last to boot its PC out the window.

How critical cloud computing is to *any* business - startups or otherwise - depends entirely on the business itself - on its needs and goals and on its policies and strategies. It is far from certain that all businesses need cloud services.

"Cloud" technologies are much misunderstood, much misrepresented and poorly understood even amongst those who work in IT: amongst the issues which are now poorly presented are

a] there's no such thing as "the cloud" - there are many many different cloud-like deployments of systems and services; each offering different levels and types of service. Some are entirely private, some are entirely public; and others are a mix of the two. Some clouds are entirely on-premises; some clouds are remote, and some may be a mix of the two. There is no "one-size fits all" cloud deployment. There is no cloud. There are merely collections of distributed services which are *described* as being a cloud - or as something or other as a service.

b] moving to a cloud deployment is not significantly different to deploying any other fail-safe high-resilience deployment of technology. The difference is that one has moved the complexity further away - outside one's direct control, and increased the fragility and the number of dependencies unless suitable risk and impact analysis has been done prior to the design/deployment phase - and done to appropriate standards of due diligence.

c] the reduction of costs is largely an illusion; we ourselves may see reduced capex/opex costs, but meanwhile the energy costs and Carbon footprints of the global data warehousing and cloud industry and all of its NOCs have spiralled exponentially so that they now significantly exceed those of all the worlds air traffic and are well on track to exceed those of air and road transport combined by circa 2020. Cloud doesn't reduce those wider social and environmental "costs" it merely moves them elsewhere - out of our sight - leaving "us" with the illusion that we have reduced our capex/opex.

d] moving to a cloud deployment is all very well but it increases a critical risk which has been with us since the dawn of the internet; the wire limit - how much data one can move between locations in a given time period. We are now creating [and using] data at a rate that vastly exceeds our capacity to move it.

We are also creating a gigantic single point of failure for all businesses which make themselves entirely dependent on the cloud; if all their comms fail so does the business. If their data movement time exceeds their risk recovery window then the business fails.

**************

Cloud technology can be very useful; but only when all parties involved truly understand its risks and its rewards. Startups need to make informed choices when determining how critical a cloud deployment may [or may not] be for them. Appearances are often deceiving.

You can easily find out what a cloud network can do for your business ... by requesting a comparison of available providers including free quotes here:

Compare Cloud Providers

How To Grow Your Small Business And Gain Customers

In order to be a market leader you have to constantly innovate to grow your business and customer base.

The most important thing you can do to grow your business and gain customers is to address their needs and deliver extraordinary value.

Marketing is not about the company, but about the customer - you should be entirely devoted to the client's agenda and achieving success on their terms.

Learn how to focus on exactly who is your target customer, how you can help them and where you can find them and engage with them.

This is such a critical part of growing a successful business, it not only makes the marketing much easier as you can begin making progress with the right people from the start, rather than chasing prospects that are never going to be customers, but it's also a massive saving for a small business. Focused marketing really helps control costs as you are investing in doing less but see a more profitable gain.

Treat every customer like a guest in your home. Build your business one customer at a time with personalized customer service and sales. Great listening and follow up skills are critical as is never saying "We can't do that."

Two more things come to mind that can help you grow ....

1- Develop credibility with credbile people

We have found that our best source of new business comes from people that we have served, advocated for, helped advance their endeavors.

2- Learn to say no.

Dont be afraid to say no to a client or prospect. You have to show some confidence and power in you and your abilities AND, you should not take on a project or a client simply because you need the revenue.

You need to create customer loyalty, which then translates into retention. As customers choose to stay with your company, they'll expande the services they use, products they buy, and the amount of money they spend. All of which are at no to minimal additional cost to you. Basically, provide excellent service to clients, resulting in a network of referral based business as well as a pipeline to future business.

Pinterest Marketing for Niche Businesses...Live Video Q&A FREE

Pinterest is EXPLODING in popularity right now. It has literally created entirely new revenue streams for small biz owners who were smart enough to recognize the "potential of the pin."

Pinterest has quickly rifled to #3 of all social media, just behind Facebook and Twitter. Let's not beat around the bush...

We're so excited about the growth potential for site owners and marketers with Pinterest that we've set up a special event dedicated to the subject.

And to host the event, we've invited the cream of the crop - Jason Miles. A little bit about Jason...

Jason is the Vice President for Advancement at Northwest University, author and universally-recognized Pinterest expert...

Jason's not your average Social Media Expert. He actually puts his own knowledge to practical use!

Together with his wife, he founded Liberty Jane Clothing, which they grew into a six-figure niche business. Their top social media traffic source? You guessed it... Pinterest!

Excited yet? We are too. Here's how you can catch Jason during this unique one-time-only event ...

Pinterest LIVE Video Q&A with Jason Miles Wednesday, July 25, at 6PM ET

You can learn more here ....

Marketing With Pinterest

Come join us for some rare (and oh-so timely) insight on a subject that suffers from a serious lack of credible information -- Pinterest.

During the live Q&A, Jason will dispel some popular Pinterest rumors and focus on what this emerging SMM platform means for YOUR small business!

Creative Financing Options For Small Business

Think "finance needed"...think "bank loan". It's a pretty traditional model that probably far too many of us were brought up with but in these far from traditional times, the options are vast...aren't they?

Today's success stories so often seem to be born of genuine creative genius, particularly with outstanding marketing, innovative product lines, and irresistible customer services packages - surely financing solutions can be equally creative?

Getting outside (i.e. somebody else's) money to finance a business can be done in only two ways ....

(1) borrow it or
(2) sell something (like shares).

Then depending on a number of variables, whether you are selling debt or equity, you may need to consider technical obligations created by state and federal securities laws (because you are selling an investment in your business). There are already an extremely broad array of techniques and methods by which both debt and equity financing is structured. You should speak with a transactional (corporate) securities lawyer in your jurisdiction to get an idea of the universe of financing options.

For business loans that range between $25-$100k that are unsecured you can go to Professional Funding.com and they'll put together credit card lines of finance. It costs $500 to apply (you get it back if they can't do it) plus around 8% of the amount you're borrowing. Its unusual but it works. Be aware that you have to have a credit score of 700+ for this to work.

There are lots of creative alternatives to traditional financing (debt and angel/VC equity) such as:

- Get customers to pay sooner, including sometimes 1 year in advance, rather than just in arrears

- Locate a business partner who finds your product/service strategic, and get their money (either in equity or revenue)

- Bootstrap

- spend little money

- Grants

- Donations (see kickstarter.com)

- Revenue

- find creative ways to quickly generate revenue to cut your cash burn rate, even if the revenue isn't in your core business

Also consider strategic relationships with mutually beneficial businesses that will consider injecting capital into the business in return for equity or profit share.

Alternative financing is creative and "no" it is not just factoring, purchase order, or equipment leasing.

Asset based lenders can create a line of credit against assets.  For example, a company has inventory, AR, machinery or equipment, these can be used as collateral for a line of credit. Also, for real estate there are products such as hard money loans or bridge loans.

Other types of financing are investors, angels, venture capitalists, and crowd funding or if you have securities, stock, life insurance or bonds, these can also be used for collateral for a loan.

If you have a banker, ask them if they have a reliable person that works in the alternative financing arena. There are options outside of banking, you just have to make sure that you are working with someone reliable.

There are options for every need you might have. All lenders want to get repaid - just like you want to get paid in your business. Thus, they look to some type of cash event for repayment. For standard business loans, they look to ongoing cash flow. For other types of financing they can look to financial assets like accounts receivables, credit card receipts, or purchase orders - all things that create future cash event to repay the loan or advance.  There are also others that do bank statement loans or micro payment business loans.

There are specific loans for specific needs and general loans for general needs. Its not about getting creative in creating loans - the real challenge comes from being creative enough to take those funds and earn a solid return (more than they cost) from them.

Lastly, just like everything in business - you have to due your diligence or you will get ripped off. But, a little homework and you can find the money your small business needs - just know that you will not get something for nothing.

Mobile Marketing For Small Business

Somewhere in America a small business owner just experienced an anxiety attack that included breaking out in a cold sweat, because he had just discovered two things:  Half of the prospects and customers in his market cannot find his business. Half of the calls his prospects and customers want to make to his business never get through.

Pretty scary, huh?! Glad that’s not your nightmare, right?! Well, hold on to that thought as you digest the following information.

Currently, about 100 million Americans own smartphones and that number is growing exponentially. That’s about half of the U.S. population who are likely to own a smartphone sometime in the near future.  Here’s the math: 300 million Americans, minus children and others not likely to own a smartphone equals about 200 million, of which half already own smartphones.

So what are 100 million Americans doing on the tiny screens of these magic wands? Besides making calls, texting and sending emails, they are....

Shopping online – making decisions about what they want and who to buy it from.

Navigating to businesses – the one they chose while shopping, or the one previously unknown to them that pops up in their local search.

Buying stuff – using PayPal, credit card, or internal charge in the case of an established account.

But in order to do all three of these things in such a way that makes it easy-peasy for the smartphone owner, the business has to be mobile-ready. That means having all of your business information and resources compatible with the smartphone form factor and technology in at least two ways:

- Online information is optimized for mobile search, especially local search.

- A mobile website option is available to smartphone users.

By now you get the picture that the anxiety attack of the small business owner mentioned earlier is because his business isn’t ready for mobile primetime. So how dry is your forehead right now?

In the 21st century, where being relevant to customers is trumping being competitive, a big part of relevance is being fully accessible and high-functioning regardless of how a prospect or customer wants to connect with you. And every day, that connection is increasingly being requested from the palm of the hand.

This will be on the test... Not all small businesses need a mobile app, but all need a mobile website. Is your business ready for mobile prime-time?

Heidi Roizen

Check out the latest interview with Heidi Roizen. We asked her the questions that students voted up as the ones they most wanted answers to!


If you use a supported browser, you can view Youtube videos via the YouTube HTML5 Video Player, which may be more accessible for keyboard and assistive technology users. This can also be used to playback the video at a faster rate of speed.

• First time here? 
• Join the next class!
• See the class description and frequently asked questions. 
• The course operates according to the flipped class, where team-based, experiential education (learning by doing) is central and video lectures and readings are there for support.
• If you'd like, form a team and follow along at http://venture-lab.org, like us on facebook and join the group, or follow the Google+ page.
• Start with the intro and course overview videos.
• For Chinese viewers the videos are also on YouKu (http://u.youku.com/eesley)
• See what some of the teams did for the last assignment and the description of the next assignment.
• View the videos for Sessions 1-3 to catch up here.

What Is The Biggest Technological Hurdle Small Business Face When Marketing Themselves Online?

Is it a time issue? Is it a lack of skill? Is it budgetary constraints? What would help small businesses make the biggest impact in the shortest amount of time if that hurdle didn't exist?

All of the above, and more.

Human beings tend to stick with what provides proven results. That means doing things the way they've always been done.

Small business owners, like everyone else, have "invisible scripts" that affect their decision making even if they're not aware of it. They probably have this script in the back of their minds that says, "Anything related to technology and online tools is going to be expensive."

In other words, it may not be a REAL budgetary, skill, or time constraint, but the perception that these factors prohibit online ventures. Plus, they don't really know where to start. They probably know that either they're going to have to learn (script: "I don't have time for that") or hire somebody on to manage it (script: "I can't afford to hire someone to manage an unproven tool"). Perception trumps reality every time.

Though new technology can save money and make tasks easier in the long run, and online ventures don't have to cost an arm and a leg, if the perception is that such things are going to be expensive with questionable ROI...

But it may also be more fundamental. Small business owners get a bright idea, or have a skill, and want to turn it into a business. They decide they need a website. Then, usually much to their distress, they discover that they will have to be in 2 businesses. One of them is the one they want to be in, and the other is something, that vaguely dawns on them, under the heading of internet marketing. They aren't sure where to turn. They don't know who to trust. They discover that if they don't get a grip on technology and marketing, they probably won't have a business.

Have you heard the expression, "surrounded by people and no one to talk to"? The whole 'technology and marketing' thing is so vast, with so much information, much of it conflicting, that they wind up frozen in place. They don't know where to turn, or what a reasonable first step might be.

We've spent years trying to crack the code on this. I think we learn a little more about it every day. When it comes to technology and marketing online I think small business owners need to first take a step backwards, back to the basics of marketing and planning. I'm a firm believer in setting goals first, then making a plan based on those goals, and then taking action.

Without knowing what they want to accomplish it's difficult to decide which tools to use. More web traffic? More sales? Make the phone ring? And it's hard to determine a budget for online marketing if you don't know why you're doing it.

That said, I think small business owners face one or all of the hurdles mentioned. Time, skill, money. As to what would help, once they've identified goals and challenges, it's easier to identify if they need to carve out time, learn new skills, or outsource everything. I don't think there is one size fits all solution, but if you've got one, I want to know!

Developing Economy Entrepreneurship

Being an entrepreneur in a developing economy context can be very different than in Silicon Valley. The political context becomes another part of the business model that you have to test out alongside aspects like the revenue model and marketing. In this video I give some tips for entrepreneurial strategy in a developing economy.


If you use a supported browser, you can view Youtube videos via the YouTube HTML5 Video Player, which may be more accessible for keyboard and assistive technology users. This can also be used to playback the video at a faster rate of speed.

Another reason Small Businesses are so important to our economy or “I have to join what!”

I hope as part of your Business Plan you remembered to include all of those costs associated with the various groups you need to belong to. These groups, organizations or associations are the ones where as you belong, but cannot readily see any benefit you can put your hands on other than the notoriety or because it looks good. These may include Chamber of Commerce, the various national professional groups associated with your particular product or service and local associations relative to your product or service. At this point I am not including charitable organizations or activities as you do get tax deductions for these.

These various groups and associations require yearly fees or dues and can add up which is why you should be including these in your projections as costs for doing business. You should try and break these up as much as possible so they all do not come due at the same time, like at the first of the year.

Now, I have said you cannot readily see any benefit and I know there are those already building their argument as to why I am incorrect in making this statement. Let me explain by saying belonging to these groups may very well be necessary for the ultimate success of your business. In essence, by belonging you elevate your business in the eyes of potential customers for various reasons. If as a particular service provider you belong to the national association(s) representing this service then potential customers may recognize your business as being “better” than those that do not belong. In some cases these associations or organizations may include a referral base they may tout as a resource for sending you more business. Most, if not all of these entities, will provide you with their logo to include on your web page and or advertising materials such as business cards or brochures and fliers to show you are a member. Unless you receive direct customer referrals it is difficult to gauge how much belonging to these organizations actually contributes to your client base or sales and this is why I say you cannot readily see any benefit.

There are some entities such as the Chamber of Commerce that do offer benefits up front such as free advertising in their publications, free Grand Opening ceremony, free newspaper ad announcing your business opening and listing in their on-line local businesses data base. In many cases the Chamber will, also, have a referral base for those who call in looking for a particular type of business and if yours fits the need your number or website will be given out. Many of these referrals or listing in their periodicals is done on a rotating basis and therefore your business may not always show up. These benefits are real and do offer something in exchange for the yearly dues. This is one of the better investments your business can make as many people view those belonging to the Chamber as true members of the community and the Chamber encourages the members to shop at or use the services of other members exclusively or whenever possible. This coupled with the many get togethers the Chamber sponsors will allow your business to make many contacts quickly. Some members of the Chamber will, also, offer discounts to other members.

Deciding on just which ones to belong depends on your particular business and should include your current income. You may want to focus on the ones with the most potential for return first and join others down the road as your income increases. Just don’t forget to allow for the dues on a yearly basis. Tracking your sales/client improvements should shed some light as to which organizations are providing for an actual return on investment and at some point you may want to invest in a survey to better identify where the most returns are coming from. This is no different than recognizing which type of advertising is providing the most bang for your buck and then changing your contributions accordingly.

Participation by small businesses in these organizations and associations provides a direct economic benefit in the creation of jobs and strengthens products produced in the United States as well as pride in your local businesses and locally produced products or services. So don’t just stand alone in your business, but contribute and join many others like yourself and enjoy the benefits of being part of a larger group and use this to promote your business to its fullest!

The Top 10 Mistakes People Make When Starting A Small Business

Here is our top 10 list of mistakes people make when starting a business:

1. Not enough money: The most common reason why new businesses shut down is that the owner runs out of money. Cash flow is critical to a startup business. You could be profitable and still have to close your doors because your customers are taking too long to pay you. Cash is king in a startup venture and you need to prepare for it.

2. Not thinking survival: Starting a business is all about survival. How do you stay around one more day so that you can learn more about your market and close new customers?

3. Losing momentum: Many new entrepreneurs have ambitions to start a business so they create a website, try to make a few sales, go all out for a few months and then stop completely. Building a business is all about momentum. If you had 24 hours to spend on a business they would be put to far better use by spending one hour a day than for 24 hours straight.

4. Doing it all alone: Nobody is perfect or has the skills to do everything themselves. You need to understand what it is that you bring to the table and what you need to surround yourself with. If, for example, you are very strong at inventing but don’t want to sell then you need to find a salesperson to help you.

5. Not hiring right away: You should begin looking at who can be brought on board to help you from the first day of starting your company. There will be tasks in any business that you, as the owner, should not be focusing on if you hope to build any sort of sizable organization. Why are you doing admin work when you should be out closing customers, talking to the media, and landing new partnerships?

6. Doing it just for the money: If you don’t truly love your business then you won’t be successful. If you read the stories of famous entrepreneurs and how they built their organizations you will find that it all comes down to the root of loving what you are doing.

7. Getting to year 1, past year 2: Many entrepreneurs have a hard time getting to the end of year one. Typically it’s because they started the business on a whim and got excited about an opportunity but didn’t do the proper research. These entrepreneurs usually run out of money and close down after a few months.

8. Don’t build around a customer: The best way to make a lot of money quickly is to find a customer who has a problem and is willing to pay you to solve it – and then you go out and build the solution. Most entrepreneurs take the opposite mentality of “if I build it, then will come” only to realize that they’ve built it and nobody is coming. Instead of talking to customers as to why they’re not coming they decided to continue building and building. Soon they find out that they’ve invested years of work and nobody is interested in buying from them.

9. Don’t seek mentors: A great way to get a business going is to find out what other people have done to achieve success and implement those strategies into your own company. Find mentors who have knowledge of your industry and will give you time out of their day to help you.

10. Don’t get involved in the community: Tied in with not seeking mentors is not getting involved in the small business community. Countless opportunities are generated by connecting with other young entrepreneurs and finding out what they are up to and how you can help. You will get new business opportunities, partners, investment, media attention, ideas for productive tools to use, advice for your company, and many other resources that otherwise would take you years of trial and error to figure out (if you ever do at all).

Course Summary

It's hard to believe that we're down to the last course video - the course summary.

It's been a terrific road we've traveled together and I'm extremely proud and amazed at what you all have done with your ventures over such a short period of time!

I'm closing the formal part of the class with your personal business plan assignment and with a summary of what we've learned in the course together along with one of my very favorite video clips from Steve Jobs, a truly inspiring video and worth watching the entire thing!

I hope you all will stay engaged and together as a community. I'd love it if some of you would help to mentor the next batch of students when we do the class again!
Those participating in the Demo Day can continue on and of course venture-lab will continue to be a resource for you all.

Thanks for a great experience everyone!

Session 14

• Videos
• Course Summary
• Assignment
• Personal Business Plan
• Additional Resources
• Social entrepreneurship
• A Capitalist Jolt for Charity - New York Times
• The Meaning of Social Entrepreneurship - J. Gregory Dees
• More videos on ECorner on Social Entrepreneurship
  
  
• First time here? 
• Join the next class!
  
• See the class description and frequently asked questions. 
• The course operates according to the flipped class, where team-based, experiential education (learning by doing) is central and video lectures and readings are there for support.
• If you'd like, form a team and follow along at http://venture-lab.org, like us on facebook and join the group, or follow the Google+ page.
• Start with the intro and course overview videos.
• For Chinese viewers the videos are also on YouKu (http://u.youku.com/eesley)
• See what some of the teams did for the last assignment and the description of the next assignment.
• View the videos for Sessions 1-3 to catch up here.

If you use a supported browser, you can view Youtube videos via the YouTube HTML5 Video Player, which may be more accessible for keyboard and assistive technology users. This can also be used to playback the video at a faster rate of speed.

Practical Advice For A Small Business Startup

Many new small business owners start on a vision which is great; however that vision truly does not have a plan. A business plan is important to offer a solid foundation for your business model and forethought of expense, income, marketing, etc.

 I work with many small business owners and truly not all 'ideas' or 'dreams' are the right fit for that person.  One major downfall with many business owners is that they act on impulse and not logistics.

Example... 'Bob' has a relative who is diabetic – he decides to open a store front bakery in a strip center and only utilizes family and friends to help create, build, market and originate ‘goods’. No one is on a payroll – everyone is a volunteer which of course equates to no accountability. The store receives some media attention due to the ‘specialization’ of the store. People come in from the media attention – store becomes busy – no true employees since employees are volunteers / family and Bob is now having a hard time keeping up on orders because he does not have the funds to purchase bakery supplies. Bob is selling as much as he can but he is truly upside down on funds since he has utilized all of his personal funds to get the bakery up and running. Bob realizes that he needs to sell over 5,000 cupcakes to make his rent, insurance payments, vendor payments, etc. Unfortunately, 7 months later, the bakery closes.

This is a true example of not having a solid business plan with a realized budget. Good people with good thoughts however did not have the guidance from a SCORE or SBA counselor to assist them with their business model.

Make sure that you take the time to meet with your proposed landlord to learn about the fine print, make sure you meet with the local village or city to learn more about the demographics of the area, make sure you have disposable income since you will not be ‘making money’ right away, make sure that you have a clear sense of what you wish to have your business look like – stick to your plans – do not let anyone up sell you on your plans.

Enumerating all the mistakes may be productive to a point, but discussing the means to avoid them as a whole is more constructive.

A sound business plan is the best tool for the new enterprise. It is just as much for the business planner as for the investor. Completing the process will convince the most important individual that a viable business vision exists for the enterprise. That individual is you.

When you have completed your business plan, you will be able to pitch it with confidence to people who can help you. It will be your road map to your future that you can slide across the table to a banker, partner or investor. You can address it with verve because you own it by having done it.

The free links below provide free tools and examples on business planning.

 How To Write A Business Plan

 Sample Business Plans

 MicroMentor

Post Your Personal Business Plan here

If you are following the course on http://venture-lab.org then post your personal business plan there.

However, if you're just following along on the blog, then you may post your personal business plan in the comments below.

I look forward to reading these!

Post Your OEP here

If you are using http://venture-lab.org, then please post your OEP assignment there. If you are just following along here on the blog, then post a link to your OEP in the comments below.

Good luck to everyone!

Start-up Chile

Check out this video by Steve Wozniak on Startup Chile, a great organization in Chile that I'm on the Board of along with a few other Stanford faculty.

Tips For Avoiding Failure As A Start-Up Small Business

Most small businesses fail within the first few years. That's just a cold hard fact. To avoid being one of them here's some tips to consider....

Many emerging entrepreneurs make the mistake of not being specific enough in choosing a target market. They think they'll be turning away potential customers if their services are not broad enough. This also means that their vision in marketing is too broad and clouded. Lacking a specialty can come off as a lack of commitment or lack of expertise in any given service offered. You don't want to be a jack of all trades, master of none.

Once "positioning" has been determined, I found that many people make the mistake of taking on every client and opportunity that comes their way. Instead, they should be focusing on clients that they will be happy working with, fit well with the expertise they can offer, and actually appreciate what is being offered. The mistake is that they end up dealing with clients that take up all their time and do not help them grow. The focus should be on serving clients that you really want.

Also, when branding and positioning their new business, instead of trying to compete head-on with others on price and/or services, they should try to build a niche in their market and in that way not compete directly with others. Try to be the best in one area instead of being good in a lot of areas.

I think it's irresponsible to tell new entrepreneurs to do what they love and they can make a business. No, not everyone can be an entrepreneur or business owner (which are two different things). A lot of people have skill and passion but lack the technical skills to run a business. Not everyone has access to incubator programs, MBA programs or consultants, so it keeps them from getting properly educated.

The other thing I would say is that people lack confidence and are risk averse. To be an entrepreneur you have to be willing to take risks and be confident in your product/service. Before anyone launches, they should be researching their market (and no, no just reading about it, but getting out there and talking to your demographic). Once you understand where the needs are, who the customer is, and how much they're willing to pay for your solution, then you can start building a company from there. It won't be perfect out the gate, but you'll have an idea of how to build your foundation. You can learn the rest of the skills along the way, or hire your weaknesses.

Too many people start businesses without a clear set of objectives that they can measure over time. This is like shooting a bow and arrow without a target. How do you know if you are successful if you have no target?

The Top 10 Mistakes Of New Business Owners

What are the "top 10" mistakes you consistently, across the board see in new business owners?

Consider the scenario where you want to jump into the entrepreneur scene, have no guidance, are just told to "do what you love", bust your ass and hustle 7 days a week .... and fail.

The road is far from straight - hard work alone means nothing - but there are definitely some big mistakes I see the same new business owners making again and again.

I've got a few, but I'm most interested in the ones you've seen. What were your biggest mistakes in starting a new business?

Top 2 I've seen .....

#1 Starting with your "passion" or skills you have, without seeing if anyone will actually pay for it. Is there market demand?

 #2 Positioning ... Have you actually sat down for 3 seconds to determine why someone would actually choose you over someone else?

I was once told that the #1 reason why people leave a service after having used them over years is because.... they've become a commodity. McDonald's or Burger King? Who cares.

What about you?

Demo Day, Removing Teammates and Equity

As we get close to end of the class, we need to make a distinction between two groups of students: 

1- The students who wish to develop a site, a service, or even form a company with (some of) their teammates. 

2- The students who took the class just to learn about the entrepreneurship process, or did not find the right team, or just do not have the time and do not want to take the next step. 

Both options are completely fine. You should have a conversation with your teammates by the OEP interim report deadline (July 7) to decide what you wish to do. Those of you who are in group 2 can submit a personal business plan after July 7 and help us with reviewing team reports. 

If you wish to do #1 with your team, you should discuss it among yourselves and see whether a subset of team members wishes to continue. It is perfectly fine if only a strict subset of members of a team continue with choice 1. In that case, the rest of teammates can leave the team.   We will have a demo day at the end of the class where you can present your final presentation, business model canvas, marketing page (or website), and team to a group of experts, investors, and members of the press. Since this will be highly visible and could lead to funding or partnerships, you should work hard to create a perfect deck. 

More detail: [We want to create a demo day for those teams that have a site, a product, or wish to continue together to build something. Although the demos are online, we will invite mentors, investors, and members of the press. A select set of teams can also give a live pitch to a few Silicon Valley investors and get feedback. If your team wants to participate, you should put together a demo (pitch) deck, which includes links to your site (or marketing page), business model canvas, team and so on. You can review Henry Wong's video on the "Acid Test for Entrepreneurs" as well as my venture finance videos 1-3 for what should be included in a pitch deck and demo. We will announce the date in the next week or two as we are working to line everything up.

It is perfectly fine if you do not wish to do the demo day, and it is also perfectly fine if you do not want to continue with your team. Just submit the personal business plan as the final assignment. Or form a new team right away. 
You can also wait to form a new team with new students in the next round of the class!]

After the OEP interim report, we will let team leaders remove team members. This should be done with consultation with the rest of the team. If the team member was helpful in the beginning please be helpful by writing them a positive endorsement or a thank you note for their initial help. Your reputation is very important in entrepreneurship because so much of it is trust-based. We have an appeal process. If you feel you should not have been removed, you can initiate an appeal which will send a message to all of your teammates asking them to log-in and vote for whether you should continue to be part of the team. The majority decision will stand. Ties will remain on the team for the teammates to work out a solution. If you're removed, you can still submit the other assignments and the final personal business plan. You can also try to join a new team. If you are removed you can appeal. You will need majority support to come back.

In any case, we will maintain that you were a member of a particular team on your profile so it will be in your list of accomplishments if you wish to try again with the next class, or for other classes that we plan to offer on this platform. 

Finally, regarding equity, we can't give you a specific formula or resolve equity disputes between team members. Typically, if you are not continuing with the team to actively build the business, then you should not expect equity from those who do. For team members who are continuing you need to have a frank conversation about how to split equity that recognizes those who are taking bigger risks and devoting more towards the venture. Equity should also always vest over time, even for co-founders.

Lessons and Take-Aways Towards the End of Class

I wanted to give a few lessons and take-aways at this stage of the course. At this point in the OEP project, my students at Stanford (and most likely you all as well) typically have experienced many of the ups and downs of the startup roller-coaster experience.

Currently I can tell that consistent with the Stanford classes, there is a group of teams that are really energized and excited about the progress that their startup ventures have made. They may have come into the class with an idea already or they stumbled across a promising idea from the very start, or in many cases, they responded to feedback from the market and pivoted to an idea and business model that customers are really responding positively towards. These teams are usually pouring tons of energy, the team has really come together and enjoys spending time and doing a lot of work in their startups and it's tremendously fun to watch and be a part of them. Usually these teams are emailing me with all kinds of questions about things that are really good problems to have. How do we incorporate? We have an offer from an angel investor who wants to put in money, how do we negotiate? We have a large corporate partner who wants to meet about doing something together, how should we prepare for a meeting? Where do we find a good lawyer to help us get patents? These are all great problems to have and topics for future courses and class sessions one day!

There's usually another group of teams where it's been more downs than ups. There may have been some conflicts among the teammates. Some people aren't pulling their weight or have dropped out entirely as they lost faith in the vision or the rest of the team. Negative feedback from the customers usually exacerbates internal team conflicts that were brewing. The team may have tried to pivot their business model a few times, but when these pivots and new ideas are also met with negative feedback from the market then it's easy for the team to get discouraged and arguments to ensue. Not all startups are going to work out and this is perfectly natural. The team might try another pivot or just might wind up having to disband and try again with a new team. While these teams and students are often frustrated and discouraged, sometimes it takes a few months, but when I run into them again the following school year they often tell me that they still learned a lot from the class. I have been a part of startups like this and we often learn a lot more from the failures than from the successes.

The third and often largest group of teams are usually somewhere in the middle. They are neither complete successes nor complete failures. Maybe a teammate or two have dropped off and aren't putting much work into the project but the rest of the team still believes in it. The feedback on some aspects of the business model has been good, but in other areas there are still problems. Maybe a larger company has recently announced a very similar product. Or maybe the marketing is just really difficult for this customer segment or they want the product but just aren't willing to pay enough to cover the costs. Maybe the product is just too early or too late to the market and it's hard to figure out how to pivot it exactly but it seems like there must be a way. Or perhaps the team is realizing that the business is viable but the market just isn't that big and it may not be worth pursuing after all. The frustrations are numerous and it's difficult to name all the possibilities, but it feels like a tough slog. This is what a lot of startup life is like. This is precisely why it's so important to start out with a problem you're truly excited and passionate about solving and a team that you get along with well enough to make it through these times together and not split apart entirely. It helps you to push through this time period in the startup life.

Many of these projects are salvageable and can be made into successful businesses. It's not going to happen overnight and it's not going to work out for all of them. The trick of entrepreneurship in many ways is knowing which of these projects to continue being persistent about and continue iterating and which of them to just give up on and move on to something else.

Update: Some teammates in all three types of groups will naturally want to remove teammates or reduce the team size at this point. Look for an update from us on the ability to do this and how to go about it soon.