I was reading some random blog link I got on Twitter that had the great title of “Premature Scaling Kills Startups – The Startup Genome.” At first I thought it was going to be a post about the Human Genome. I guess my recent post about the Human Genome and EMR might have influenced that thought. Turns out, the post was talking about the “genomic data” of a startup company. Something I actually love more than the Human Genome.
You should go read the whole post, but his list of bullet points at the end hit me:
The team size of startups that scale prematurely is 3 times bigger than the consistent startups at the same stage
74% of high growth Internet startups fail due to premature scaling
Startups that scale properly grow about 20 times faster than startups that scale prematurely
93% of startups that scale prematurely never break the $100k revenue per month threshold
He also provided 2 summary items which help you get the most out of the bullet points above. I’d describe them simply as:
When reading this post by Brad Feld, I was reminded of the challenge that is being an entrepreneur and leading a company. In Brad’s post he talks about a couple of strong, capable entrepreneurs that were starting to have self doubt. Brad suggests a way out of this self doubt using inquiry. Go read his post to learn about that.
What hit me about his description of self doubting entrepreneurs was how much of a challenge it is to be an entrepreneur. As the founder and leader, you’re constantly walking the tight rope of humility and confidence. You have to be humble enough to not compare yourself to others (and other companies), while keeping your confidence for the rest of the team.
Both of those characteristics are hard to manage.
I think by our very nature we want to start comparing ourselves to other people. If it’s not in our nature, then it’s in our culture. Either way, the ability to not compare yourself to others is a challenge. When you talk to other entrepreneurs you rarely get the whole story. They only tell you the exciting and wonderful parts of their business. They seem to avoid telling you about their fears, anxieties, pressures, stress, and even failures.
Since all you’re hearing is the great things about other companies, it’s not even fair to compare your business to another. Even if you do hear the challenges of another company, there’s still little value in finding your self worth in your company being better than another company. Guess what? It doesn’t really matter.
Related to the above challenge is the entrepreneurial challenge of remaining confident for the rest of your team. There’s a reason that a coach is so great for an entrepreneur. It gives them someone to share their deepest fears that they’ve kept bottled up from the company because they want to maintain the culture.
I’m not talking about lying or misleading people in your company. You should always speak frankly, honestly and openly with the people who work with them. However, the best CEO’s know when is the time to keep your fears to yourself and when is the time to share those fears with the company. Often some things are better kept unsaid.
Thus the dual life of an entrepreneur. I’d love to hear your thoughts on this challenge. How do you deal with it? What have you seen?
As I posted a couple months ago, I was part of the organizing committee that brought the Startup Weekend event to Las Vegas. By all accounts, it was a huge success. The sold out event was completely packed and full of great startup energy. It makes me wonder how many more people would have come if we hadn’t sold out.
Then, during and after the event we had news coverage from the RJ, ABC Channel 13, Fox, CBS Channel 8, and I’m sure I missed some others. It was really great to have all this coverage of tech startups in Las Vegas.
However, more important than all that coverage was the buzz that happened within the tech and startup community in Las Vegas. The connections that happened thanks to Startup Weekend is what I really wanted to have happen because of Startup Weekend. I wanted startup companies and internet startup minded people to have a chance to meet and come together. That happened in spades during startup weekend.
Whether any of the ideas that were started this weekend at Startup Weekend will continue after the event really doesn’t matter to me. What I do know is that many of the relationships and connections that were made at the event will endure for many many years to come. This is why I call Startup Weekend a raging success.
I was also really excited by the caliber of judges that we had on the Startup Weekend judging panel. I think it was best summarized by a tweet from @JonMumm:
“las vegas sw win the prize for most intimidating judges” @terradrop#swlv
No doubt, it was an incredible opportunity for entrepreneurs in Las Vegas to be able to present and interact with the likes of Tony Hsieh, Kevin Rose, Tom Anderson, Josh Reich, and Ryan Carson. Not bad to have founders and investors from a number of billion dollar companies on the judging panel.
I think the weekend is nicely summed up in a quote of mine the RJ published:
“We learned that Las Vegas has enough tech companies to actually have a tech scene, but none of us knew about each other,” said John Lynn owner of Crashutah.com, a website creation and marketing business in Las Vegas. “This event was the start of bringing those companies together so Las Vegas can begin to build its tech scene.”
Certainly this was the start of something and not the end. The question is, Where will we take it from here?
There’s no one individual that’s going to make it happen. Instead it’s going to take a little bit of effort from a whole lot of people to continue to grow the Las Vegas startup community. I’m committed to continue doing my part to grow the community. I hope everyone will do the same.
I love the quote that says, “Many hands make light work.” That’s definitely applicable to growing the tech startup community in Las Vegas. Let’s all help grow the community.
I know I’m kind of crazy to admit it, but one of my hobbies is to read venture capitalist and startup entrepreneur blogs. Maybe one day I’ll be brave enough to go after VC money for a startup company of my own. I haven’t needed to do so yet, but maybe one day. Until then, I’ll continue to enjoy it as a hobby.
As I mentioned in my last update, I’ve been doing what I can to help grow the internet startup eco-system in Las Vegas. As I continue to meet more Las Vegas entrepreneurs, I see all sorts of challenges and issues related to the Las Vegas startup eco-system. One of those issues is having more Fall Back Las Vegas Startup Companies.
This is one of the powerful features of a city with a strong startup environment. The numbers are against every startup company. If I remember right, it’s something like 9 of every 10 startup companies fails (and that might be being generous). That means the majority of new companies that are created are going to fail. We need more Las Vegas startup companies so that if and when a startup company fails the founders and employees of those companies know they have other companies they can go and work for.
One beauty of silicon valley and other startup hubs is that the culture accepts companies failing and there are other opportunities if and when it does fail. Certainly even in silicon valley they aren’t happy when the company they’re working for fails. However, at least when it does happen, they have a lot of other companies that will hire them. They don’t have to go start parking cars to pay the bills, but can move on to another startup company. Rinse and repeat.
Ok, I may be oversimplifying it a little bit, but the ability of a city to absorb talented people who worked for a startup company that’s failed is something I’d love to see happen in Las Vegas.
I guess I should have made my post that I published earlier today about my Father since it is Father’s Day. Although, as I thought about my father, I think they my previous post about all the amazing things I’m doing really just might be the best Father’s Day present I could offer my father.
You have to understand that my day has the entrepreneurial bone in his body. Well, maybe not the bone, but he has it in his head. The desire to be an entrepreneur has always been my father’s dream and it’s always alluded him. He’s tried over and over and never really succeeded at it.
I still remember as a young child sitting around listening to my dad talk about this business or that business. Inevitably he would use a line that went something like this, “If I only have XXXX customers paying $X.XX a month, then I’ll be set.” It didn’t matter if it was Amway, Investing, Life Insurance, or some other company that my dad tried to do. I was always there to sit there and listen.
I think even as a young child I would challenge my dad on his assumptions. I really wanted to learn how it was going to work, what the commission structure was, and how he was going to grow the business. Obviously, I’d inherited that same entrepreneurial bone. I’d ask him hard questions like “How are you going to get XXXX customers.” And the always popular, “What if you only get X customers?”
I certainly was a precocious young kid wasn’t I? I guess I still am. Just ask any entrepreneur that I’ve talked to. I never enjoy people that say “That sounds good.” or “I really like that idea” when I ask them for some feedback on something I’m doing. I prefer someone who’s going to ask me the hard questions and help me to be able to answer them.
So while my Father’s unfortunately never reached his dream of entrepreneurial nirvana, I hope my Father’s proud of all the entrepreneurial success I’ve had. The reality is that without my father I wouldn’t be nearly the entrepreneur that I am today. Not only did I get his genetic traits, but I also learned incredibly valuable lessons from his experiences that made me who I am today.
I’m really excited to tell you about Startup Weekend finally coming to Las Vegas. I’ve wanted to participate in Startup Weekend for quite a while. In fact, I was friends with one of the first people involved in Startup Weekend and I can’t say I wasn’t a little bit envious of him being part of it. Well, now it’s coming to Las Vegas.
Ok, if you’re still not convinced, here’s the rest of the details about how the event works and a great video which captures the essence of Startup Weekend quite well.
| About SW |
Startup Weekend is a 501(c)3 non-profit that brings together the entrepreneurial, web development and design communities for one weekend with one goal: Going from idea to launch! Here’s a quick video of the recent events in Philly: watch. I believe it captures the essence of the Startup Weekend, a launchpad that we’re truly excited to bring to Vegas!
The weekend is easily broken down into Pitch, Build, Present. Friday is pitch night when anyone with an idea gets one minute to pitch to the crowd. The crowd votes on the top 8-10 ideas and we start to form teams and build. We build all day Saturday until around 4:00 on Sunday (with some awesome meals mixed in). Finally, Sunday is launch day where teams will have the opportunity to present their ideas to investors, industry leaders. A few awesome ideas and their entrepreneurs have even gone on to receive funding.
| Judges | Sunday (6/26) – 5 PM – 8:30 PM
There are so many ideas that come out of Startup Weekends. Some of them are wacky and a lot set out to rule the world. Judges are encouraged to give valuable advice/feedback in addition to just asking questions. We have a list of 5 basic criteria for the winners circle:
1. Execution (what teams have actually accomplished over the weekend; i.e. deliverable)
2. Presentation (self-explanatory)
3. Viability (financially speaking)
4. Innovation (is the concept unique? disruptive?)
5. Breakthrough Potential (maybe it’s popular among first adopters, but can it be scaled to a larger market?)
| Speakers | Friday (6/24) 7PM – 7:45PM
We’re going to have two speakers and a local startup do a demo before we begin pitching. Speakers will have 10 minutes of full on attention to speak on topics like: bootstrapping vs. raising funds, the local investment ecosystem and team dynamics and the importance of picking the right people and communicating effectively. The audience will then have 5 minutes of Q&A. Slides are ok but not required.
| Mentors |
Generally speaking, mentors spend about two hours on Saturday and/or Sunday meeting with teams or individuals. We plan on having some awesome ideas launched in Vegas, so we understand if you want to stay longer.
Saturday – 10AM to 6 PM and/or
Sunday – 10AM to 5PM
6:00pm – Registration starts (pizza served)
7:00pm – Kickoff & Speakers
7:30pm – Pitches Begin – (60 seconds per person)
9:00pm – Attendees vote for the top ideas
9:15pm – Teams start forming and discussing ideas
10:00pm – 1:00am – Teams begin to work
[Recharge on Fremont E]
9:00am – Doors open. Breakfast & coffee
9:30am – Teams continue working. Mentors arrive and begin working with teams.
12:00pm – Lunch
6:30pm – Dinner
7:30pm – Mid weekend check-in, status reports, call for help
12:00 midnight – Finished for the day. Stay and work as late as the venue will allow.
I had this little link stored away in my draft posts. It’s an article about a man named Michael Tchong who sees Las Vegas as a future Silicon Valley. The article is a nice read and does a good job talking about the challenges of internet startups in Las Vegas. However, I agree that there’s some real potential here in Las Vegas for entrepreneurship and specifically internet startups.
I did a little more digging and found Michael Tchong’s website called ubercool (nice name). He also has a twitter account by the same name and it even lists Las Vegas, NV as it’s location. So, I guess he does live in Las Vegas according to Twitter. Although, if you look at his speaking schedule on his website, it looks like he travels a whole lot. He does seem to have a pretty interesting background and so I hope that one day I get to meet him.
It’s fun to think about Silicon Las Vegas. There are some tremendous upsides to living in Las Vegas versus Silicon Valley. Not the least of which is the now very inexpensive housing. Of course, there are some challenges as well. This quote from the article linked at the top is one of the largest ones:
Information technology and Web publishing employees comprise less than 1 percent of our workforce, according to the Center for Business and Economic Research at UNLV, meaning Las Vegas isn’t exactly a tech hotbed.
Of course, the fact that UNLV categorizes them as information technology and web publishing (who uses that term?) should say something about the area as well. There’s so little activity they don’t even know how to categorize it.
However, the article is right that Las Vegas could use a few more Zappos like companies to make their home here. While the jobs from those companies would be good. There’s even a greater value of having technology companies like Google and Yahoo located in a city, because many of their employees will end up quiting and starting their own companies. Or they will leave the large tech companies and provide the future work force for the smaller internet startups.
If I were in Las Vegas politics, I’d be working to bring some of those large tech companies to Las Vegas. It would be worth the cost.
I know that there are lots of arguments all over the internet about whether entrepreneurs are born or made and of course the right answer is it’s somewhere in the middle. Some people’s nature would never make it as an entrepreneur and some people’s environment makes it impossible for them to be entrepreneurs.
However, I’m a strong believer that you get what you want. If your heart is set on being an entrepreneur then you’ll more than likely end up with that result. It’s hard to stop a person’s strong desire and passion.
I think one of the biggest problem we have is what we define as an entrepeneur. Don’t get me wrong. I think there is a very big difference between small business and entrepreneurship. For example, a mechanic runs a small business. Unless they have a dozen repair shops. Then, they become entrepeneurs.
However, I think we also love to glorify the entrepreneurs who get hundreds of thousand or millions in funding which they burn through like a women burns through cash in a shoe store.
My favorite is when groups define entrepreneurship by revenue. So what if you have $500k in revenue if you have $1 million in expenses. I’d rather have the entrepreneur with $300k in revenue and $200k in profit. It is certainly a different approach to entrepreneurship, but just as valid as the former in many cases.
The key for me is that an entrepreneur sees a way to make 10 times the amount they were making with the same amount of effort.
Plus, the reality when your an entrepreneur in a place like Las Vegas is you have to be smarter with your money since the investment dollars don’t flow the same way in Las Vegas (at least for internet startups in Vegas). I think this is a really healthy thing and it is why I’m glad to be a different kind of entrepreneur in Las Vegas.
I debated for quite a while how I would describe myself on my LinkedIn profile. I have a hard time describing what I do and who I am since I just do so many different things.
I finally ended up with the description of “Full time internet entrepreneur and blogger.” I think that kind of describes the two sides of what I do. Certainly there’s a lot of nuances in each of those things and I have some really specific niches, but that kind of describes what I do for a living.
Recently I’ve been thinking about the idea of whether blogging could really become entrepreneurship. I should first clarify that I think there’s a difference between a entrepreneurship and small business. Entreprenuership is about building a business that can scale. Small business is about doing a job that will provide for your family. With this definition of terms in place, I must admit that I’m stuck wondering if blogging can really become entrepreneurship or if it’s generally destined to just be a small business (ie. Can’t scale. Feeds the family, but you have to keep doing it forever).
The first question that I think must be asked is whether blogging can really be scaled. There are certainly examples where blogs have been scaled up nicely. Techcrunch scaled nicely and had what I’m guessing was a lucrative exit to AOL. I think it’s fair enough to say that blogs like Huffington Post have been able to scale in amazing ways.
I guess the question is whether there are smaller blogs that can scale beyond small business. For every Techcrunch and Huffington Post, there are a dozen Scoble’s and Dooce’s that are both incredibly successful bloggers and I’m sure they make a good living blogging. However, they have such unique voices that without them their blogs really don’t exist. So, they’ll have to keep doing it for a long time it seems. That’s small business and not entrepreneurship (from what I can tell).
Of course, I’m guessing that Scoble and others would argue that it really doesn’t need to scale. If he wanted to scale it, he’d choose to do something different to make it scale. He loves blogging and if he chose to scale it up it would take all the fun out of what he does on his blog. Plus, the end goal isn’t always about money. He makes good (probably even great) money doing something he loves. Why would he ever want to scale it?
Although, I think that deep down most people want to see more traffic to their site and find more ways to monetize the site.
One simple example for me. When I started my EMR and HIPAA blog, I worked really hard to drive as much traffic as possible to the site. After about 6 months and quite a bit of effort, I reached what I thought was the max traffic I could reasonably obtain for that blog: about 1000 pageviews per day. I reasoned that maybe that’s all of the people that were interested in such a narrow niche.
Long story short, Obama announced something called the ARRA EMR Stimulus money (Translation: $18+ billion for EMR). I read about it early and blogged about it early. That’s now paid off in spades as I’ve been able to grow my traffic to 5-7k pageviews a day.
Point being that I was able to scale that blog even though I originally thought that I couldn’t scale it anymore. It did take some outside circumstances to help the situation. Although, it’s also taken quite a bit of effort to maintain and even increase the traffic now that I have it.
The question I’m asking myself now is what else can be done to really take my blogs to the next level? Is it possible to scale blogs into true entrepeneurship?
I’ve also just started some talks with a company that is possibly interested in acquiring one of my blogs. The results of those discussions will hopefully shed some interesting light on that aspect of blogs and entrepreneurship as well. Certainly it’s nice to have a cash cow blog/website that just generates cash for you. That’s small business (a really nice small business, but still small business). Entrepeneurship requires an exit of some sort. I’m not sure what exits are available for a blog.