Through Motivation, Innovation and Execution
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Great Advice For Any Entrepreneur or Investor
I received an email from Howard Lindzon the co-founder and chairman of StockTwits. It was such a simple and profound lesson that I want to share and pass along.
Here’s a lesson I learned in my early start-up days. It was told to me by a very successful entrepreneur and occasional angel investor, and I didn’t believe it at the time. Now I know it’s the Truth with a capital T.
“Ben,” he said, “I’ve got a lot of money and I’ve got a lot of rich friends. We could probably fund this idea of yours for a long time with the 3 F’s – family, fools and friends. But that would be a big mistake. You need to know if a professional VC will invest in this. You need to know if real customers will pay you money for this. You need to know if dogs will eat the dog food you’re serving up. Because if dogs won’t eat the dog food, you shouldn’t do this, even if you’ve got funding secured for years, even if you can fund it all yourself.”
Like I say, this didn’t make me happy at all when I heard it. I thought this was the angel investor’s way of blowing me off, and maybe it was. But he was absolutely right.
Entrepreneurs should fully expose their ideas to the steely gaze of real investors and real customers as soon as humanly possible.
And if your great idea dies under that steady stare, it dies.
Be grateful for that.
Why? Because the great tragedy for an entrepreneur is NOT a failed idea. You will have other ideas! No, the great tragedy for an entrepreneur is a zombie idea, a business that has no chance of growth and vibrancy, but is kept alive through some witch’s brew of too much friendly capital and too much misplaced hope.
Stealth mode? 99 times out of 100 it’s a crock, a smart sounding excuse for hiding behind a non-competitive curtain. Self-financing? Ditto. The courage of an entrepreneur isn’t risking your own money. Of course you’re doing that. That’s the necessary condition, not the sufficient condition. The sufficient condition is risking your identity in the very public arena of competition and capital.
It’s the Curse of Some Talent, when you’ve got an idea or a venture that seems great to you, but isn’t quite great enough to make it in the cold cruel world. But you remain convinced it’s SUCH a good idea, you remain convinced that you really really do have the talent to make it big, and you’ve got the resources to keep going. That’s how one year turns into two. That’s how two years turns into ten, a decade of meh, all because you didn’t listen to what the world was telling you, all because you couldn’t bring yourself to put down the merely good idea, all because you never forced yourself to dream the NEXT idea.