Secrets of Self-Made Billionaires

Forbes.com has a cool feature where they ask self-made billionaires a bunch of questions to find their secrets. Worth a quick read. For example,

One lesson is clear: If you want to make serious cake, start a business. Of the 400 titans on our list, 274 are self-made–up from 270 last year. Six of the top 10 spots on the Forbes 400 belong to entrepreneurs (as opposed to those born into wealth). Their combined net worth: $166.5 billion.

Its a nice feature with pictures and videos and there are some good nuggets in there. BTW, 5 of the 8 (including Donald Trump) are currently worried about government  regulations adversely affecting their business going forward.

WSJ on Student Entrepreneur’s Use of Twitter

Interesting WSJ article by Riva Richmond about one student entrepreneurs use of Twitter in starting his firm,  soliciting user feedback in improving their product/service, gathering competitive intelligence on other firms in his industry, choosing a logo, and finding strategic partners.  The startup is called TweetPhoto and the entrepreneur is Sean Callahan.

3 (or 4) Reasons Why Entrepreneurs Should Take Cold Showers

Over the past 2 weeks I have been taking nothing but cold showers and have come to believe that entrepreneurs should only take cold showers. Here are the 3 (or 4) reasons why entrepreneurs should take cold showers.

1. Taking cold showers saves time. There is no lolly gagging, singing, or day dreaming while in a cold shower. This saved time allows entrepreneurs to get more done. It also reminds us that time is precious and shouldn’t be wasted in the shower or other places. I would have to say my shower times have dropped from 12-15 minutes to 3-4 minutes. This at least an extra hour a week or 52 hours (2 days) a year.

2. Taking cold showers saves money. Using cold water means my hot water heater works less, lowering my utility bills. This saving on hot water is a reminder to entrepreneurs that we should always be thinking about spending less. There are two sides to the income statement — revenue and cost. As Ben Franklin noted, “a penny saved is a penny earned.”

3. Taking cold showers builds character/fortitude — the whole Goethe “whatever doesn’t kill us makes us stronger.” It reminds the entrepreneur that a strong character is needed if success is going to be achieved. Entrepreneurs will be in uncomfortable situations and be required to do new and awkward things often. While taking a cold shower is really not that difficult, almost no one chooses to do it (so there is clearly discomfort there).

4. Taking cold shower is humbling (for men) as the cold water has an obvious effect on certain male body parts. (See the famous Seinfeld segment for more information if needed.) The point is that entrepreneurs must be humble, constantly aware that we will make mistakes and that we should always be looking to learn from others; the cold shower is a great reminder of this (for male entrepreneurs especially).

So go take a cold shower and grow as an entrepreneur — while shrinking physically (& temporarily) if you are a male entrepreneur.

Recession is Here, Time To Launch A Biz!

I was fortunate enough to be interviewed recently by a personal finance magazine writer (I will let you know which mag it is if I make it into the article) and was asked whether I thought a recession was a good time to start a biz. I thought yes because a) fewer people are willing to take a risk and just want to hold onto their jobs and b) larger firms are also in a conserve position.

It appears that some researchers at Kauffman have some data that shows that more than 1/2 of the Fortune 500 was founded during recessions. From our friends over at the Growthology Blog:

I started with a question posed by our Kauffman colleague Keith Mays: how many companies on the Fortune 500 list were founded during a recession? It turns out that well over half of the companies on the 2009 list started during a recession or bear market.

This, in and of itself, is remarkable. But it also turns out that the Fortune figure, when broken down by decade and when looked at in the context of recent Census papers that Kauffman has helped fund, fits neatly into a narrative of the American economy moving from the bureaucratic capitalism of Galbraith’s New Industrial State to the entrepreneurial capitalism of the past two or three decades (and the entrepreneurial capitalism of a prior era). The composition of the companies on the Fortune list is rather dynamic (surprisingly, I think), but even more importantly, startups have been enormously important in terms of job creation. Without startups, we would have had only a handful of years in which overall net job creation in the economy was positive.

So, whether you are a student, mid-career professional, senior manager, or retiree, if you have ever wanted to launch a biz, now is the time — the trends are on your side. Get out there and do it.

VC Investors Don’t Care About BPlans

Writing a business plan is something virtually every entrepreneur and entrepreneurship student does. A new study out of U of Maryland, authored by my friend David Kirsch and co-authors Brent Goldfarb and Azi Gera). From the NYTimes article by Brent Bowers:

Researchers found that venture capitalists, who screen hundreds or thousands of solicitations each year, pay little or no heed to the content of business plans. Instead, the study said, because they make decisions “under conditions of high uncertainty,” venture capitalists rely on instinct and their expertise in ferreting out information by other means to evaluate the prospects of a business.

That means, the study said, that they pay little attention to the documentation from entrepreneurs about their academic credentials, work or start-up experience, previous success in raising equity capital, ability to form a top-notch management team or even how much money they want.

“In general, business plans don’t matter,” said Brent Goldfarb, an associate professor of management and entrepreneurship at the Robert H. Smith School of Business, who wrote the study with David A, Kirsch, also an associate professor at the school, and Azi Gera, a doctoral student. “Nobody is going to read them.”

That assertion flies in the face of the conventional wisdom that writing a business plan is one of the first and most essential tasks an entrepreneur should undertake, Mr. Goldfarb acknowledged. But, he says, the report’s conclusions jibe with the feedback he gets from venture capitalists.

A Headline Telling You to Become an Entrepreneur

From Bloomberg, “Job Losses in U.S. Spreading to Workers With College Degrees.” Of course no one is untouchable in a capitalist system, but the numbers of highly educated layoffs are growing. Full article by Courtney Schlisserman.

Tulane BPlan Comp: Social and Business Tracks

Just received word that the Tulane Business Plan Competition is open for entries until Feb. 15. They are awarding $40,00o in cash to the winners. There is a social venture track and also a business innovation track.

I would expect the social track to be a competitive field given Louisiana’s recent history and also the fact that it is the first state to have an Office of Social Entrepreneurship.

The contest is open to teams across the US as long as one member of the team is a student at an accredited university. Good luck. Go Green Wave!

At the Bottom of it All: Sales

Mary Pilon at the WSJ had a cover story over the weekend on the education of the door-to-door sales force at retail stock brokerage firm Edward Jones; a financial firm that is growing in the face of our bear markets.

It is a great reminder of the importance of getting out there and doing it when it comes to sales (especially for new brokers and those of working with a startup) and also that no matter what the market, there is always opportunity.

The story, of course, includes some great vignettes (it is the offbeat cover story from this past weekend’s edition). Here are a couple good snippets:

The Continuing Evolution of BPlan Competitions

Just read an interesting story by Kimberly Cornuelle covering BU’s Institute for Technology Entrepreneurship and Commercialization (ITEC) competition. In this competition, there will be real time voting for finalists by audience members. While it doesn’t appear that these votes are not counted in a specific way, according to the article, the judges will take audience votes into account.

While the decision of the judges — a panel of venture capitalists and business leaders — will not be based solely on the number of votes, Goldstein says votes in favor of a particular team can only help. “The judges will definitely take the votes into consideration,” she says. “They will be looking at the actual plan proposed, how the finalists articulated their goals, plus the audience votes.”

This is an twist in determining the winners of a competition that I had not seen before. The business plan competiton has come a long way from its birth at the University of Texas. And it is good to see that different competitions are trying different techniques to expand the reach of business plan competitions.

As discussed previously, we have seen social venture competitions, corporate sponsored competitions, media led efforts, economic development competitions (ie Gov’s Contest in Wisconsin), market based competitions (ie the Boomer Contest), and online contests (ie Vator.tv, StartupNation). This latest innovation is cool because it brings the audience into the contests and presumbly asks them to consider the viability and growth potential of the firms presenting. Ideally this helps spread ‘the gospel’ and ‘ideals’ of entrepreneurship.

From the article,

The final projects are AutoNAIS, which proposes a new product that helps biologists save time and effort with sample preparation; RemesaTel, which hopes to provide inexpensive access to credit and trading opportunities through mobile text messaging in Mexico; Nakama Media, which will sell its online multimedia language learning tool MediaLesson in Japan and Korea, and Essense Medical, which develops disposable medical tools, initially focused on colorectal cancer, to diagnose and treat cancer in real time.

Are Accelerators Going to Become Campus Players

While looking for the GWU entrepreneurship club today I came across a posting by LaunchboxDigital.com, a new DC based new venture accelerator. It turns out they are actually hosting an event with the GWU entrepreneurship club tonite. I can’t make it, but as I read the blog post, I began to wonder if applying to be in an accelerator is a better strategy than entering business plan contests. It looks like LaunchboxDigital is interested in getting access to students and the campus eco-system.

According to a recent report on accelerators from the Kauffman Foundation; this new model of funding and building firms is becoming more common.  Here is a piece from the report.

This so-called new “accelerator” model differs from previous early stage investors, such as incubators, which are oftentimes limited to real estate deals, with start-ups as tenants who pay for shared overhead. In contrast, the accelerator typically helps form companies as legal entities, interviews and hires the appropriate initial management team, and lends its own management expertise. In short, the accelerator becomes the “new company” throughout seed-stage development.

Like American Idol contestants who audition their skills before a panel of judges, new business start-ups compete for slots on the accelerator’s “team.”