First, I believe that mistakes are the biggest gift that we have as entrepreneurs because they force us to focus on what to do right the next time. Plus they humble us, which is also a tremendous gift that helps us grow—if we are smart and pay attention to the bigger lesson!
Lesson number one for us was about how to manage the build-out of our technology, both from a people and a partner perspective. In this day and age, there are many ways to build a business. You can build and own every one of your technology components or you can use a mixture of your own intellectual property and/or that of other firms. In any venture that relies on technology to succeed, you have the choice of outsourcing not only development, but also using external components to “accelerate” development, or to bypass development altogether
and use existing services to provide those components. If you choose to build and own the intellectual property as we did with LeisureLogix, don’t be fooled into thinking that you will save money by deferring the hiring of the CIO or CTO role. In a technology business, this really should be the first position that you fill.
Because I had a lot of technical expertise myself and had some very good product development people on board, we entrusted this role to an outsourced technology provider. That’s a little bit like letting the wolf guard the hen house. Even of you have a competent partner, you don’t have a way to make sure that the architectural decisions that are being made are in your long-term best interest. An internal CIO or CTO would have taken responsibility for building a product
that could scale and that was affordable moving forward. It’s easy as an entrepreneur just to look at the up-front cost and not to concern yourself about the long-term total cost of ownership.
I am happy to say that I have now learned this lesson and in starting Solutionz Media Group in 2009 and launching the Internet-based radio network known as Solutionz Live!, I determined that this time around I did not want to own the technical infrastructure necessary to deliver the shows. I am now using BlogTalkRadio.com’s highly functional platform. And did I mention that they are well funded? More simply said, this lesson is “let others do commodity functions
that they do well and keep the core competency and differentiation of the venture (including the management of the partners) inside.”
The second lesson, and the most interesting one to me personally, had to do with the role that I played with my first non-consulting venture from beginning to end. There is often a conundrum, particularly with outside investors, of what role the founder should play, particularly if the founder is also an inventor. Quite often, the founder is the visionary and also deeply in love with the product and sees its capabilities both in the short-term and in the long-term. It is not unusual for that person to be a bit of a free spirit, without some of the professional discipline that would come from being an operational executive. I was no exception. Although I had been the CEO of my consulting firm for ten years, I didn’t have experience as the CEO of a corporation and hadn’t had to manage an investor or a board of directors. In the end, at the leading of our investment bankers, once I had seen the company through the initial build phase, we brought in an external senior management team, including a new CEO, to take the company to the next level.
In short, even though the people we hired were highly competent individually and they had tremendous experience in the travel industry, put simply, I moved out too soon. And, particularly since we had hired individuals without significant startup experience, it left the company without the much-needed entrepreneurial spirit when we hit the inevitable bumps in the road, not meeting the original projections and missing the mark on the key business model elements.
In my new media venture, I will be using the knowledge gleaned from this important lesson to craft a seasoned entrepreneurial team moving forward, but will see it through to profitability before handing over the strategic leadership of the company.
Lastly, I didn’t recognize the importance of putting an external board in place that could propel us forward through making key introductions and providing the added credibility we needed beyond getting the launch client signed. We did this as an advisory board, but I don’t believe that advisory boards have the same strength or motivation to actually build a company. If I had it to do over again—no wait—I do have it to do all over again! With Solutionz Media Group, I’ve asked two highly seasoned broadcast executives, each of whom has tremendous entrepreneurial spirit, to be on my board moving forward.
This is an excerpt from Bootstrap Business, being published in August 2009. The book features best-selling authors Tom Hopkins (How to Master the Art of Selling), Jack Canfield (One Minute Manager), and John Christensen (FISH!). Chicke Fitzgerald, Hopkins, Canfield, and Christensen are joined by other well known authors and speakers, each offering time-tested
strategies for success in frank and intimate interviews.
No comments:
Post a Comment