I had the pleasure of speaking alongside Marty Metro on the topic of Entrepreneurial War Stories at the Tech Coast Venture Network. We spoke to a crowd of early stage startups about our trials and tribulations during the startup phase of our ventures, ThemBid.com and UsedCardBoardBoxes.com. Here are some notes I took during the event.
Before I go into the notes, I want to congratulate Adam Miller for winning the 30 second fast pitch competition for his startup Abroad101.com.
Elmer Thomas, CEO ThemBid.com
Be careful about spending too much money on marketing early on, without a solid plan to convert the traffic.
Avoid adding employees to your payroll until you can clearly define the need and understand the ROI.
Be careful promoting employees to leadership roles too early. Even though you may be eager to replace some of the many hats you wear, realize that some people are not ready for leadership roles.
Create a board of advisors based on the overall needs and goals of your organization. Tie their compensation, whether cash or equity, to some performance metrics and longevity.
Before accepting external funding, be sure to have a plan that specifies the need and use of the money.
Be careful of the “too many advisors” trap. What happens is that you will find that each will have great advice, but often contradicting. The key is to step back, combine their ideas with your own research, and then make a independent decision.
Marty Metro, CEO UsedCardBoardboxes.com
The biggest lesson learned was the need to build systems that can be replicated. See The E-Myth Revisited: Why Most Small Businesses Don’t Work and What to Do About It
Investigate your advisors and make sure they will be a good fit for your business.
Don’t try to fit your company into a solution. Define what your company should be and then find solutions and systems to support.
Build business models that don’t require people.
Build scalable systems that are tuned to ensure that each transaction ensures a gain. Don’t even allow non-profitable transactions to occur.
Make sure the numbers behind your business make sense before considering outside funding. Make sure you understand the market’s capacity to buy your service or product.
When dealing with advisors, keep in mind the difference between a partner and a vendor. Many are vendors, rather than true advisors.
When issuing equity, be sure you have a means to buy the stock back at a later date.
Don’t try to sell a concept that you have not proven yourself.
Speak Your Mind