Mark Cuban’s Advice To Entrepreneurs – Risk, Energy, and Funding

According to online dictionaries, an entrepreneur is “a person who starts a business and is willing to risk loss in order to make money” or “one who organizes, manages, and assumes the risks of a business or enterprise.”

Well, I get a check for both of those. My past venture into the fashion industry was fraught with risk and cost me plenty. Now, I have little to show for it, save for a closet full of the most amazing handbags EVER CREATED.

I’m normally a risk-averse person, but somehow, when I’m on a quest to find the formula for success in some endeavor, I throw tons at it – money, energy, time – hoping to find the magical components. The problem is, when you invest in something you really don’t understand, you come up empty more often than not. Knowledge is power, sometimes more so than money, and that’s what struck me with this video from Mark Cuban.

The big takeaways?

Seeking funding for a new business venture is failure. It’s an admission that you can’t hack it on your own, can’t find success with the resources you already have, and need to sell-out in order to plunge forth. The question is, how successful will you really be when you are on the hook for millions of dollars to others who believed enough in your idea that you probably could have rocketed on your own first, albeit a little slower??

I never thought of it that way…

My latest venture is challenging, to say the least. And while I’ve researched the concept itself, I’ve thought many times about how I’ll pitch the idea to investors, how I can get into an accelerator, how I can get the attention of venture capitalists…all so I can command funding and leverage expertise from those who have already found success.

But after watching this video, I realize my mindset needs some fine-tuning. Funding is not necessarily the answer. Preparation is the missing element in my formula. It’s where I fell short with my first business. Not taking enough time to learn about the industry before jumping in, spreading myself and my resources too thin to be even slightly effective, not doing enough research in the form of focus groups prior to designing my products. It was a totally ad hoc, fly-by-the-seat-of-my-pants, throw-lots-of-crap-at-the-wall-and-see-what-sticks process, with no tried-and-tested repeatable elements. I had no blueprint, no measurable metrics, and no plans for future execution. So, what did I do? Hired a new, more expensive PR firm (which did squat, btw), designed even more products without customer input, spent more money than I could afford…only to land flat on my face with no answers and lots of anguish.

I never acquired the knowledge, though I did amass mountains (now they’re more like hills) of debt as a result. I could have mitigated the risk with a deep understanding of the business landscape, including potential pitfalls and competition elements. But not me! I’m an instant gratification whore, way too impulsive and impatient to waste time on LEARNING, of all things.

To my own peril. I’ve raised many a glass to that toast, regrettably…

So, Mark. Thanks for the advice. Knowledge is the most powerful tool in your arsenal. The more ammo you have, the more prepared you are for battle. And yes, it IS a battle. But winnable if your head is in the right place.

How Do You Know You’re Ready For Launch?

We all want a big-splash launch – no matter what the offering. Who wouldn’t want mountains of accolades and recognition for a job well done?

In the period leading up to your big day, the best advice I can give consists of one very important word – plan.

Planning is critical to a successful launch, so make a list of everything you can possibly do to make your event as grand as possible. Here are a few suggestions to consider:

  • Create a Task Timeline – Identify each component of your launch prep along with an expected timeframe for completion and a point of contact.
  • Prioritize Each Task – For each group of tasks you’ve outlined, ask yourself which ones will have the greatest impact on your launch. Focus on the ones that will deliver the biggest bang for your buck first.
  • Ask For Help – Reach out to all your contacts – family, friends, colleagues – anyone who can help you spread the word. Send them Facebook posts, tweets, images to share via Instagram, fliers to hand out in their towns – anything that will highlight awareness.
  •  Leverage Your Existing Fan Base – Come up with creative ways to engage your existing fans. Word of mouth is the most effective way to generate interest because of the credibility factor so ask your fans to get involved with your launch.
  • Cross-Promote – Identify potential partners who have launches around the same time as yours and augment your target audience by gaining access to theirs.
  • Maintain Your Plan – Update all notes and statuses so at any given point, you can see exactly what your progress has been in preparing for the launch.
  • Follow-Up As Needed – People generally don’t have a sense of urgency about someone else’s endeavors so a gentle nudge is sometimes warranted.
  • Get Out the Corkscrew – When you’ve fully executed your plan and feel confident you’ve done all you can do, the rest is up to the stars. So sit back, relax and have a glass of wine because you deserve it.

Red and white wine pouring on wood background

Got Funding??

Part of the issue with running a startup is figuring out how to keep up your monthly expenses while waiting for your sales to explode. After all, if you can’t pay the bills, you won’t be able to sustain and grow. It’s difficult to pinpoint exactly what you will need at various points and a lot is dependent on how quickly your offering explodes in the marketplace. That’s both good AND bad…good because you have a lot more incoming funds to line your bank account and bad because you need to maintain momentum while meeting increased customer demand. Sales may fluctuate from month to month as well and you need to have enough cash on hand to keep the lights on, even during the lulls.

falling dollar bills from money tree

falling dollar bills from money tree

This is where working capital comes into play. In layperson’s terms, it’s basically the money you need to pay your operating expenses – the things you have to pay aside from your development or manufacturing costs. These expenses include administrative, legal, insurance, office overhead, salaries, payroll, taxes, transportation…the monthly bills that recur without fail, independent of how many widgets you produce or sell.

Some newbie CEOs fund their businesses using credit cards. I might have been one of those at one point…let me give you a bit of advice. DON’T. DO. IT. 0% offers look like loans with attractive terms but they expire. It’s tempting to use those blank checks, I know. But there are better ways to manage your finances.

Small business loans? Um, okay, if you want to pay back insanely high interest rates. They are also extremely difficult to secure AND you practically have to hand over your firstborn as collateral. Just a little more added stress to deal with. No thank you!

You may also have the discretionary funding available for personal investment purposes. If that’s the case, good for you! Not everyone has that luxury. But don’t get too discouraged. There are other options available.

A revolving line of credit is actually a really good way to mitigate some of the risk related to keeping your business solvent. You use what you need when you need the cushion and pay back only what you’ve spent with flexible terms, without having to worry about high fees or high interest rates. You can pay the money back as a lump sum or broken out into monthly payments at a set rate. You may want to create your own unique repayment schedule. You may only need funds at crunch time while you’re waiting on receivables from slower-paying customers. A revolving line of credit gives you steady access to cash when you need it most.

Kabbage is a company that helps put small business owners in touch with the funding they need. Low interest rates and flexible repayment options? Yes please!! The application is quick and simple – you can get approval in minutes and the funds are generally available to you upon approval. Besides all that, they have a really cool logo. And you should know by now I’m a sucker for a good logo. =)

SONY DSC

SONY DSC

Can You Be Disruptive Enough To Win $50K??

TechCrunch Disrupt 2015 is upon us. It’s time to take the party to NYC, for the bargain price of $2,995. General admission gets you access to ALL – rub elbows with up and coming entrepreneurs, hear from industry superstars, check out all the cutting edge technology…maybe party is an understatement. =)

Courtesy of TechCrunch

Courtesy of TechCrunch

You may recognize the event name from the HBO show Silicon Valley. Season 2 premiered on Sunday night and although I had high hopes of being able to stay up until 10, it wasn’t happening. So Hubby and I watched last night and it was awesome. Long time coming, definitely didn’t disappoint.

Anyway, I digress.

Last season, Pied Piper presented their compression algorithm at Tech Crunch Disrupt in Cali. All I remember thinking was, how flipping cool would it be to actually GO? Answer – SUPER COOL. The Hackathon, a 24-hour event for developers and designers, kicks off the festivities and guess what? It really happens just like in the show. All the companies present their creations but only one takes home the famed Disrupt Cup and $50,000 prize. Hundreds of startups will be in attendance…only one will claim the top prize and instant stardom (okay, maybe not the last part but they’ll at least they’ll be able to keep the lights on until some VC throws some more seed money at them).

It would be AWESOME to hear from people like Ben Rubin and Kayvon Beykpour, CEOs of Meerkat and Periscope respectively, Carly Fiorina, the former boss of HP, and Dennis Crowley who’ll chat about Foursquare and Swarm.

Energy, entrepreneurship and excitement will be exploding out of the Manhattan Center in a few short weeks.

How ironic that I’ll be headed to the Valley at the same time. Oh well. Maybe next time.

Thanks For A Great Year! Here’s A TESLA!

If you want to increase employee morale, you better dig deep because money doesn’t only talk, it SCREAMS.

Let’s face it. People perform their daily jobs because of what you pay them in salary. It’s why they work 9-5 but it may not light a fire under them to work 5-9.

Now imagine what they would do if you augmented that salary and rewarded them for their involvement and contribution to the company’s successes…say at bonus time??

A startup translated as WiFi MasterKey (backed by Chinese game developer and publisher Shanda) has taken that concept to a whole new level. This year, employees with the company longer than 4 months will receive a Tesla as a bonus.

WiFi MasterKey is a is a mobile app that automatically connects your devices to public Wi-Fi networks when in range. The app claimed more than 500 million users as of the end of September last year, and 230 million monthly active users. It claims to have free access to 120 million Wi-Fi hotspots across China.” – VentureBeat

“Talent is the key determinant for the success of high-tech companies. Through this move, we want to show how much we value and respect our talent,” said Chen Danian, the startup’s founder (and twin brother of Shanda CEO Chen Tianqiao).

Motivate + reward = retention.

Just something for CEOs to keep in their back pockets. =)

Image Credit: WiFi Master Key

Image Credit: WiFi Master Key

Giveaway Time! $50 Amazon Gift Card & Swag!!!

It’s giveaway time!!!! How would you like a chance to win a $50 Amazon gift card and your choice of one of my fab SWAG items????

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Soooo easy to enter…just like my Facebook fan page, follow the Twitter accounts listed, and/or tweet a message about Unlikely Venture!

It’s already pre-populated so you don’t even have to make one up!!!!  =)

Click Here To Enter The Rafflecopter Giveaway!

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Obsessing About Mr. Wonderful

I’m giggling because I’m mildly obsessed with Mr. Wonderful these days. Anyone who’s read my blog recently can attest to that.

Could it be because he kinda reminds me of Paul Emerson, ruthless and calculating CEO of Blue Coat Capital?

Check out my novel Unlikely Venture if you’re curious!!!

I found this video on YouTube…first of a four-part series…The Best of Kevin O’Leary. It’s kind of spot-on…I can totally hear Paul saying some of this stuff.