Small Business Summit 2011

I’m on Virgin America (it still rocks) back to SFO from NYC.  I spoke at the Small Business Summit 2011 yesterday and wanted to pass on some thoughts.

First, Ramon Ray, the conference organizer is an insanely great guy.  I’ve known him for years as he has written and blogged about Jigsaw kindly many times.  When he asked me to speak a year ago I readily agreed.  He and his partner, Marian Banker, did a fantastic job with the conference and it was very well organized.  Ramon’s limitless energy and enthusiasm permeated the whole room and infected everyone there.

There were several hundred small business owners and start-up entrepreneurs in the audience.  I spoke for 30 minutes and basically told the Jigsaw story and gave them some lessons learned.  After I was done Ramon had six volunteers come up to the front for an impromptu small business clinic.  They had to present a quick business problem they were having trouble with and I had to give them a quick answer/advice.  At first I was thinking “Great, I have to trash people’s ideas in front of a big audience!”.  But, it was fun.  Ramon knows what he’s doing!

I got a lot of questions after, mostly from those in the audience that have a burgeoning technical start-up or are trying to get one off the ground.  You can view the deck I presented here.

General observations:

  • Software/Internet entrepreneurship thrives in NYC. A LOT of very young people with great attitudes and the clear willingness to work their asses off for no pay in order to realize their dreams.
  • A surprisingly high percentage of these people were women.  Maybe it was the audience, but it feels like NYC has a higher percentage of women starting up than the Silicon Valley.
  • Many questions on how/when/why to raise money from VCs.  Compared to the Silicon Valley they seem far more wary about giving up equity.  Many seemed to distrust VCs.  I got so many questions on this subject I decided to write down my advice on fundraising and you can read it here.
  • Many questions on how to turn their service into a product.  (People who do custom work and want to convert the result into a repeatable sale).  My belief is that this is very hard to do.  The DNA of a company founded to do custom work is very different from a laser focused product company.  Plus, it is very hard not to chase revenue for other custom projects that come up when you have bills to pay.  Entrepreneurs think they can do both, and I don’t think they can very often.  To do this takes discipline!
  • I was reminded again the difference between styles on the East Coast vs. the West Coast.  New Yorkers are far more direct and blunt.  I like it!

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Small Business Summit 2011

One Response

  1. I was the person who brought up the concept of doing custom work and converting to repeatable sales. Here’s the recipe (still work in progress, I admit. But your insight helped).
    1. Stick to a “space” so that your assets are reusable.
    2. Build it but license it, never sell it.
    3. Always have a lead customer for every product – they tell you what to keep out, and what matters. Its very helpful if they are paying for it. Its even better if they pay you enough to cover the cost of the entire development. [This was triggered by my observations that VCs always want to speak to your customer and ask if they like the product, who the competition is, and how many more like them exist. Then the VC gives you money with hopes you give it back manyfold. A customer, on the other hand, gives you money with instructions on how to make them happy, and expect nothing more. Also, they tell everyone else and that credibility is huge.].
    4. Not being under VC pressure yet have cash flow allows you to battle harden the product with the lead customer, who, because they have skin in the game, won’t reject your product.
    5. The owner should handle customer service, not chase VCs. This enables them to identify large, under-you-nose opportunities they could never dream up.
    6. Over time, build slack; these revenues can finance a Skunkworks. I made QuickBooks add-ons, and then, Apple announced App Store. I was first off the block, and continue to enjoy the lead.
    7. Never develop without distribution already locked up.
    Sorry I waxed eloquent, but I have stood on the same stage teaching entrepreneurship to the MBAs at Brooklyn Polytechnic, and nothing vexes more than an incomplete thought.
    Cheers

    Hart Singh March 24, 2011 at 10:13 #