Start me up: 5 tips for budding entrepreneurs -- Career Center Blog

June 18, 2012

Start me up: 5 tips for budding entrepreneurs

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By Randy Woods
NWjobs

For those with an entrepreneurial spirit who are nevertheless stuck in the job-search loop for extended periods, the urge to strike out on their own has been stoked in recent weeks by anecdotal reports of a resurgent venture capital market. In our own backyard, the Madrona Venture Group announced earlier this month that it has launched a $300 million fund for local tech-oriented startups, the largest such pool of investment cash in the Pacific Northwest since the pre-recession days of 2007.

The news is enough to whet the appetites of hundreds of clever technology entrepreneurs in the Puget Sound region who wish to turn their ideas for a killer app into the next Instagram. But not every brilliant idea can be profitable overnight. In fact, most entrepreneurs toil on their projects in both obscurity and poverty for much longer than the average job seeker before they find success -- if ever. Only those with a deep commitment to their business ideas and who can align themselves with the right partners for the shape-shifting technology market can survive as entrepreneurs.

That was the gist of last Thursday's brief presentation by serial entrepreneur James Sun at an event celebrating the opening of Thinkspace's Mobile Innovation Hub office in Redmond. Sun, who achieved national fame as a 2007 finalist on the TV show "The Apprentice," has launched three successful tech companies, including his latest venture, Pirq, a mobile retail discount application (similar to Groupon and LivingSocial) that just landed $1.9 million in a recent venture round.

In his presentation, "Raw and Unfiltered: What it Takes to Be an Entrepreneur," Sun gave some tough love to the packed audience of more than 120 technology professionals seeking advice on how to get by in this cutthroat field. Here are some of the tips to help separate what he called "entre-poor-neurs" from successful startup enterprises.

1. Always be selling. All founders and partners, even CEOs, must also be able to sell the business concept to investors -- a skill many entrepreneurs, including Sun himself, have trouble mastering. "Even if you start out as a programmer, you have to be able to get your message across when you talk to your first angel investor over coffee," he said. "I'm actually an introvert. I'd rather sit at home and read a book. ... But I taught myself how to talk to people."

Salesmanship is not a one-size-fits-all technique, either. For the first 100 customers and early investors, Sun said, you might not have a product ready yet, so you must sell them on your vision and the potential market share. Then, as you launch and grow, you can begin to focus on service. "You have to constantly change strategies for every new 100 customers you get," he said.

2. Learn the art of the pivot. Today's technology sector evolves so rapidly that entrepreneurs must learn how to change course as often an NBA point guard, such as New York Knick sensation Jeremy Lin, "a master of the pivot step," Sun said. The needs of the customers change so fast with the rapid pace of technological advances, startups can't afford to stick to one strategy and never deviate from the path. "You almost have to learn habitually to pivot, like Lin does," he said. "At Pirq, we literally have a pivot every day to adjust to changing conditions, both internally and externally."

3. Surround yourself with experts. "I've never seen a sole entrepreneur make it all by himself," Sun said. "You always need a partner as a sounding board for your ideas. Take your time and pick someone who shares your same basic values but has your opposite skill sets." If you happen to be a good salesperson but don't have an advanced degree, for instance, find partners who have the necessary technical skills or at least have experience running a startup business, which is very important to attract investors.

Also, Sun emphasized, make sure you retain legal counsel to negotiate term sheets and help you write a business plan. "No decent venture capitalist will even read your proposal without one," he added.

4. Give people clear roles. "Not everyone can be beautiful," Sun said. Many startups, he explained, tend to trip up when the partners all act like equals and each wants to be CEO. A new company should have a clearly defined operations person, a marketing person, a salesperson and a "beautiful person" -- CEO and the face of the enterprise.

That person may not be you, even if it's your original idea. "You have to be humble enough to take a backseat role and to understand who you are," he said. "Venture capitalists look for that from the start; one of their first questions will be 'Who is the CEO?' That person should also get the better equity stock option."

5. Focus on a niche. Finally, you need to provide a unique product or service that stands out from the crowd and caters to a specific audience. "The ocean is vast and it all looks the same color of blue, but the temperatures in Hawaii are not the same as in Ocean Shores," Sun said. "Consumers in this ocean are getting more segmented every day. You have to figure out a niche strategy first and go segment by segment as you grow."

Randy Woods writes about job-search tools, networking techniques and other tips to help you land your dream job.