phildini.dev
Key insights from “The Art of the Start”
I first read Guy Kawasaki’s “The Art of the Start” when I was in college, and didn’t really know if startups were going to be my whole career, or if I was going to ever start one. As I look towards going further and further down that path, I revisited the book and took notes on what I found to be the greatest insights. There’s no real order here, this is a reference mainly for me that I’m putting out in the world so I can find it again later.
Getting Started
- Make Meaning
- Make Mantra (not a mission statement; instead a phrase you can repeat ad nauseum as a guiding principle)
- Get Going
- Define Your Business Model
- Weave a MAT (milestones, assumptions, tasks)
If your org never existed, the world would be worse off because:
Your idea should be polarizing to someone; if it’s not then you probably won’t have anyone passionate about it either.
Milestones
- Prove your concept
- Complete your design spec
- Finish a prototype
- Raise capital
- Ship a testable version to customers
- Ship the final version to customers
- Breakeven
Put these, with expected dates, on your office wall
If three close friends tell you to give up, you should listen
The Art of Positioning
“What do you do?”
Answers should be:
- Positive
- Customer-centric
- Empowering
- Self-explanatory
- Specific
- Core
- Relevant
- Long-lasting
- Differentiated
The Art of Pitching
Set a timer to one minute. Give your pitch until the timer goes off. Ask the audience to write down one sentence that explains what your organization does. Collect the answers and compare them to what you think you said.
Pre-pitch questions:
- What are the three most important things you would like to learn about our organization?
- What attracted you to our idea and convinced you to give us an opportunity to meet?
- Are there any special issues, question, or landmines I should be prepared for?
- How old will the oldest person in the meeting be?
10/20/30
- Ten slides
- Twenty minutes
- Thirty-point-font
Ten Slides
- Title (name, presenter name, contact info)
- Problem
- Solution
- Business model
- Underlying magic
- Marketing and sales
- Competition
- Management team
- Financial projections and key metrics
- Current status, accomplisments to date, timeline, use of funds
Setting the stage
- How much of your time may I have?
- What are the three most important things I can communicate to you?
- May I quickly go through my presentation and handle questions at the end? However, please feel free to interupt me if you need to.
The Art of PowerPointing
- use a dark background
- add your logo to to master slide
- use common, sans serif fonts
- animate your body, not your slides
- “build” bullets
- use only one level of bullets
- add diagrams and graphs
- make printable slides
The Art of Writing a Business Model
- do not exceed twenty pages in length
- select one person to write the business plan
- bind the plan with a staple
- simpliy your financial projections to two pages
- include the key metrics, such as the number of customers, locations, and resellers
- include the assumptions that drive your financial projections
The Art of Bootstrapping
Bootstrappable:
- low up-front capital reqs
- short (under a month) sales cycles
- short (under a month) payments terms
- recurring revenue
- word-of-mouth advertising
Negotiate everything. Circa 2004, everything is negotiateable: rates, payment schedules, and monthly fees. Even in good times, don’t be afraid to negotiate — it’s part of the game. Many firms, for example, will delay billing until you’re funded if you have the chutzpah to ask
“Morpheus” Questions
- When is your product or service going to be ready for market?
- What are your true, fully loaded costs of operation?
- When will you run out of money?
- How much of your sales pipeline is going to convert?
- How much of your account receivables is collectible?
- What can your competition’s product or service do that yours can’t?
- Who are your nonperforming employees?
- Are you doing all you can to maximize shareholder values?
- What is your org doing to change the world and make meaning?
- How good are you as the leader of the organization?
Execute
- Set and communicate goals
- Measure progress
- Establish a single point of accountability
- Reward the achievers
- Follow through until an issue is done or irrelevant
- Heed Morpheus
- Establish a culture of execution
The Art of Recruiting
Ask the candidate who all their important decision makers are. Including spouses! And parents!
Check references early. Earlier than you think.
The Art of Raising Capital
Get an intro
- Current investors
- Lawyers and accountants
- Other entrepreneurs
- Professors
Show traction
- Sales
- Field testing and pilot sales
- Agreement to field test, pilot, or use prior to shipment
- Establishing a contact to pursue a field test
Competition: Table!
- Row: competitor
- Column: We can do, they can’t
- They can do, we can’t
Trick Questions
- What makes you think you’re qualified to run the org? “I’ve done OK so far getting us to this point, but if it ever becomes necessary I’ll step aside.”
- Do you see yourself as the long-term CEO of the organization? “I’ve been focused on getting our stuff to market. I will do whatever is necessary to make this successful–including stepping aside if needed. Here are the logical milestones at which we can make this transition…”
- Is ownership control of the organization a big issue for you? “No, it’s not. I realize that to make this successful, we need great employees and great investors. They all need to have significant stake. I will focus on making the pie bigger, not on getting or keeping a bigger part of the pie.”
- What do you see as the liquidity path for the organization? “We know that we have a lot of work to do before we can even dream of liquidity. We’re the designing this company to be a large, successful, and independent entity. Right now, our heads are down, and we’re working as hard as we can to do this. An IPO would be a dream outcome–plus these five companies are possible acquirers in the future…”
The Art of Managing a Board
- Save trees
- Provide useful metrics
- Send the reports two days before a board meeting
- Never surprise a board (except with good news)
- Get feedback in advance
Whatever the first offer, ask for a 25 percent higher valuation because you’re expected to push back.
(Be reasonable and back up the push back)
The Art of Partnering
Partner for “Spreadsheet” reasons.
Getting going doesn’t start with a document:
- Get together face to face. Discuss the deal points
- When you start agreeing, go to a whiteboard and write them down
- Follow up with a one- to two-page e-mail outlining the “framework” for a partnership
- Reach closure on all details via e-mails, phone calls, and follow-up meetings
- Draft a legal document
The question for lawyers isn’t “Can I do this?”. It’s “Here is what I want to do. Now keep me out of jail.”
The Art of Rainmaking
Lead generation:
- Conducting small-scale seminars
- Giving speeches
- Getting published
- Networking in a proactive way
- Participating in industry organizations
Make prospects talk
- Create a comfortable environment by asking permission to ask questions
- ask questions
- listen to the answers
- take notes
- explain how your product or service fills their needs — but only if it does
Provide a safe, easy first step
Learn from rejection!