Thursday, September 29, 2011

101 Startup Lessons--An Entrepreneur's Handbook

Posted By: George Deeb - 9/29/2011

What started out as an unknown editorial adventure back in March 2011 (launching the Red Rocket blog), has resulted in my writing 101 St...

What started out as an unknown editorial adventure back in March 2011 (launching the Red Rocket blog), has resulted in my writing 101 Startup Lessons--An Entrepreneur's Handbook for executives of aspiring startups.  This is my small contribution back to the startup ecosystem which has treated me so well over the years.  Keep this "table of contents" list handy, as your future business needs arise.  And, thanks for forwarding this list to your entrepreneurial friends that you think may also benefit from such lessons.

Below are the original 101 Startup Lessons, plus following lessons I have written since then, sorted by major business topic:


Lesson #1: Drivers of Success for Startups. Do I Have a Good Idea?

Lesson #7: Key Components for Writing a Business Plan

Lesson #11: Considering Incubators or Accelerators for Your Startup

Lesson #12: How to Structure Your Board of Directors or Advisory Board

Lesson #17: Pitfalls to Avoid When Joining Someone Else's Startup

Lesson #19: How to Identify Your Competition

Lesson #37: The Plusses and Minuses of Franchising

Lesson #38: Things to Consider When Buying a Business

Lesson #43: Examples of Barriers to Entry For Your Business

Lesson #45: Find a Business Mentor or Business Coach

Lesson #63: Determining Exit Options for Your Startup

Lesson #64: How to Find Buyers for Your Business

Lesson #65: How to Structure the Sale of Your Business

Lesson #81: Considerations for Global Expansion

Lesson #96: Vertical vs. Horizontal Growth Options

Lesson #100: The Definitive Checklist for Startup Success

Lesson #110:  When to Drive Growth vs. Profits

Lesson #112:  Startup Ideation

Lesson #118:  Market Research for Startups

Lesson #121:  Designing an Omni-Channel Business

Lesson #128:  Try to Kill Your Startup Before You Start

Lesson #145:  Issues to Consider Before Selling to Big Companies

Lesson #149:  Can't Attract Venture Capital?  Buy a Business with Private Equity!

Lesson #151:  How to Start a Business

Lesson #164:  Is Your Startup Building a "Vitamin" or a "Pain Killer"?

Lesson #167:  The Unlucky 13 Reasons Startups Fail

Lesson #168:  Start Thinking Globally Now -- 3.5BN People Are Waiting!!

Lesson #170:  What's More Important?  Your Product or Proof-of-Concept??

Lesson #176: How to Filter Conflicting Advice from Multiple Mentors

Lesson #180:  How Retailers Can Combat Showrooming

Lesson #195:  Entrepreneurs Speak Out on What They Would Have Done Differently

Lesson #200:  Startup Success Equals Strategy AND Execution

Lesson #207:  Big Companies That Embrace Intrapreneurship Will Thrive

Lesson #212:  How to Roll-Out Your Local Business, Market-By-Market

Lesson #218:  You Don't Know, What You Don't Know

Lesson #221:  The Internet of Things is Coming, Hang On to Your Hats!!

Lesson #225:  The Potential Pitfalls from Mergers & Acquisitions

Lesson #227:  How to Run a Strategic Planning Process

Lesson #231:  The War Between Driving Growth and Profitability

Lesson #234:  Setting Mergers & Acquisitions Goals

Lesson #235:  How to Take Your Business Global

Lesson #238:  Continue to Innovate Your Products . . . Or, Die a Slow Death!!

Lesson #245:  You Cannot Cut Your Way to Growth

Lesson #246:  Buying a Business is Hard Work!!

Lesson #251:  U.S. Ecommerce Companies, Beware The Looming Overseas Guillotine

Lesson #253: You Can't Expand, While Your House is on Fire!!

Lesson #258:  How to Roll-Up Several Companies Into One

Lesson #260:  Where to Find Businesses for Sale

Lesson #271:  Want to Scale Revenues? It's All Math!

Lesson #272:  Do You Bet on the Jockey or the Horse

Lesson #279:  Ali Express, The Amazon Killer You Never Heard Of

Lesson #284:  How To Calculate Your Total Addressable Market Size

Lesson #289: Our First Acquisition--Red Rocket Acquires Restaurant Furniture Plus

Lesson #296:  Copy Proven Ideas for Quick Success--A Fortnite Case Study

Lesson #303:  How to Find Expert Consultants for Your Business

Lesson #312:  Don’t Let Short-Term Thinking Hurt Long-Term Success

Lesson #323: How Your Business Survives A National Crisis Or Pandemic

Lesson #329:  Leverage Market Downturns as Investment Opportunities


Lesson #3: The Importance of Timing & Luck for Your Startup

Lesson #8: Startups Require Flexibility to Optimize Business Model

Lesson #28: Expect the Unexpected -- Always Have a Cushion

Lesson #29: No Matter How Bad it Gets, Persistence Wins

Lesson #31: The Power of a Pivot -- Thinking Out of the Box

Lesson #39: The Art of Negotiation

Lesson #40: Focus! Focus! Focus! Build One Business at a Time.

Lesson #47: The Importance of Networking

Lesson #50: Do What You Love!! Passion Drives Success.

Lesson #71: Launch Fast! Fail Fast!

Lesson #85: Tap Into Your Local Startup Ecosystem

Lesson #86: Perception Often Outshines Reality

Lesson #87: The Art of Decision Making

Lesson #90: Proper Business Etiquette for Startups

Lesson #92: Building Your Personal Brand

Lesson #104:  Manage Expectations & Exceed Them

Lesson #114:  "Driven to Win" vs. "Fear of Failure"

Lesson #122:  Setting Key Milestones for Your Startup

Lesson #135:  Why Big Companies Struggle with Innovation

Lesson #160:  Don't Be Overly Infatuated With Your Own Startup Idea

Lesson #182:  Doing the "Smoke and Mirrors" Dance

Lesson #184:  Does Age Matter for Entrepreneurial Success?

Lesson #192:  Combat Management By Committee & Analysis Paralysis

Lesson #193:  The Best Medicine For Your Business -- A Fresh Set of Eyes!!

Lesson #201:  What is An Entrepreneur?  The Ultimate Definition

Lesson #215:  Stop Cherry Coating Your True Opinion

Lesson #224:  When to Take Off the Gloves With Competitors

Lesson #228:  Beware of Joining a Family Business

Lesson #237:  The Hockey Stick Principles of Growth

Lesson #257:  The 9 Types of Leadership

Lesson #261:  Leadership 101--Narrow Your Say-Do Gap

Lesson #263:  Having Laser-Focus Increases Odds of Success

Lesson #275:  Lessons From the Best VC Ever (John Doerr)

Lesson #276:  Lessons from Two Unicorns (LendingTree & Blackboard)

Lesson #278:  Entrepreneurs Mellow & Mature With Age

Lesson #297:  Top 10 Warning Signs Your Startup Will Fail

Lesson #302:  Business Lessons from the Great Conductors

Lesson #308: Want to Grow? Complete One Material Action Per Day!

Lesson #310:  Want Startup Success?  Keep It Simple Stupid!

Lesson #316:  Decision Making Only as Good as Quality of Data Studied

Lesson #328:  Creating a Symbiotic CEO and CFO Partnership

Lesson #341:  Don't Be the Smartest Guy in the Room

VIDEO  George Deeb Discusses Entrepreneurial Mindsets for Success on ASBN


Lesson #6: Structuring Strategic Partnerships for Your Startup

Lesson #20: Setting Product & Pricing Strategy for Your Startup

Lesson #21: Setting a Sales & Marketing Plan for Your Startup

Lesson #22: How to Calculate ROI on Your Marketing Spend

Lesson #23: How to Design Effective Advertising Copy & Creatives

Lesson #24: How to Choose a Name for Your Startup

Lesson #44: The Importance of Blogging

Lesson #48: Trade Show Strategies for Startups

Lesson #52: Viral Marketing Via Social Media

Lesson #53: Search Engine Marketing Strategies

Lesson #54: Incorporate Video Into Your Marketing Efforts

Lesson #68: Mobile Apps & Location-Based Services

Lesson #69: The Marketing Power of Free Publicity

Lesson #72: The 10 Basics of Website Design

Lesson #74: Brand Building for Your Startup

Lesson #77: The Basics of Email Marketing

Lesson #79: Determining Customer Lifetime Value

Lesson #88: The Basics of Online Display Ads

Lesson #95: The Basics of Telemarketing

Lesson #99: The Basics of Direct Mail Marketing

Lesson #107: Social Media Analytics & ROI

Lesson #120: Plan Ahead for Proof-of-Concept Marketing

Lesson #131: How to Design a Logo & Tagline

Lesson #137: The Basic Drivers of E-commerce Growth

Lesson #142: The Power of Content Marketing--A Red Rocket Case Study

Lesson #158:  Understand Your Brand Positioning (An Al Jazeera Case Study)

Lesson #162:  The Benefits of Contributing Content to Other Sites (vs. Your Own Blog)

Lesson #169:  Budget for Startup Marketing from Day One

Lesson #171:  The Basics of B2B Marketing

Lesson #174:  Growth Hacking--Marketing for Startups

Lesson #178:  Predictive Social Analytics

Lesson #185:  B2B Marketing Mix & Budget Benchmarks

Lesson #186:  Marketing Automation Tools

Lesson #189:  How to Price Your Software Technology

Lesson #191:  Targeted Marketing Has Never Been Easier, Especially in Social Networks

Lesson #202:  Writing a Book is Hard.  Writing Your Second Book is Harder!!

Lesson #211:  The Importance of First Impressions--A Red Rocket Case Study

Lesson #214:  The Basics of Programmatic Advertising

Lesson #229:  Marketing Tactics Evolve as You Scale--A Big Ass Case Study

Lesson #242:  Top 50 Content Marketing Strategies

Lesson #244:  Stop Selling the "What", Start Selling the "Why"

Lesson #252:  Marketing ROI--The Metric That Matters Most

Lesson #254: Managing For Meteoric Growth--A Home Chef Case Study

Lesson #280:  Tell a Story When Marketing Your Company

Lesson #282:  Don’t Start Marketing Until You are Ready!

Lesson #283:  Marketing Roles & Compensation

Lesson #287:  Stop Using Overly Aggressive Marketing Tactics

Lesson #294: Marketing Attribution: What Is It and Why It Matters

Lesson #295:  Top 5 Media Buys for First-Time Marketers

Lesson #298:  Top 5 Trade Show Marketing Ideas

Lesson #299:  The Search for Product-Market Fit (the Holy Grail)

Lesson #300:  Top 10 Traits of High-Performing Marketing Teams

Lesson #307:  Marketing Wisdom from Seth Godin

Lesson #313:  The Top 5 Benefits of Marketing Personalization

Lesson #320:  The Rise of Account Based Marketing

Lesson #321:  Marketing is Still an Art (and a Science)

Lesson #325: Reset Marketing Campaigns as Market Conditions Change

VIDEO:  George Deeb Discusses Maximizing ROI on your Marketing Investment


Lesson #21: Setting a Sales & Marketing Plan for Your Startup

Lesson #25: How to Structure Your Sales Team & Procedures

Lesson #26: Designing Sales Incentives to Motivate Your Sales Team

Lesson #98: Securing a Government Contract

Lesson #127: How to Screen Salesperson Candidates

Lesson #129: "Productize" Your Business for Maximum Efficiency

Lesson #130: Driving Sales Requires Driving Key Metrics

Lesson #141: How to Pitch Business Development Partners

Lesson #143: Upselling, Cross-Selling and Freemium Techniques

Lesson #144: Remove All Friction From Your Sales Process

Lesson #161:  Create an "Everyone Sells" Culture

Lesson #187:  The 1,024 Types of Salespeople.  Hire the Right Ones!

Lesson #190:  Selling Stories, Not Products

Lesson #194:  Operations & Sales Must Be Tied to the Hip (Break Down Silos)

Lesson #198:  Support Your Sales Teams

Lesson #208:  Five Sales Pitfalls Today, That Can Hurt You Long Term

Lesson #209:  Which Selling Technique is Best for Your Business?

Lesson #210:  Need a Salesperson?  Recruit Three!

Lesson #216:  Provide Multiple "Wins" Throughout the Customer Lifecycle

Lesson #223:  Ten Things You Need to Know When Responding to RFPs

Lesson #230:  Evolve From Selling "Widgets" to "Wisdom"

Lesson #241:  Successful Selling Only Begins With the Sale

Lesson #248:  Sales Not Closing?  Know When to Panic!

Lesson #256: 10 Universal Truths Every Salesperson Needs to Know

Lesson #265:  Top 10 Traits of Good Sales Managers

Lesson #268:  The Art of the Follow-Up

Lesson #270:  Benchmarking SaaS Sales Team Metrics

Lesson #286:  Want to Sell More? Keep Your Mouth Shut!

Lesson #301:  Sales Enablement Tools Help Accelerate Sales

Lesson #315:  Why We Turned Down a Chance to Double Sales

PODCAST:  George Deeb Presents Startup Sales Strategies on Best Selling Podcast

VIDEO:  George Deeb Discusses How to Influence Customer Buying Decisions

VIDEO:  George Deeb Discusses How to Find the Right Salesperson for Your Business


Lesson #61: Set Up Proper Accounting Controls

Lesson #67: Managing Accounts Payable & Accounts Receivable

Lesson #78: How to Build a Budget

Lesson #105: Run a Sensitivity Analysis on Your Projections

Lesson #108: How to Determine Your Revenue Model

Lesson #113: State Tax Credits & Programs for Startups

Lesson #132: Design a Recurring Revenue Model

Lesson #133: How to Avoid Paying Taxes on Startup Investments

Lesson #136: Save Taxes with "Profits Interests" vs. "Stock Options"

Lesson #139: How to Calculate Equity Split Between Founders in Startups

Lesson #146: Pitfalls Around Earnouts (and Why They Rarely Payout)

Lesson #179:  Reduce Customer Churn to Accelerate Revenues

Lesson #219:  Stock Option & Incentive Plans for Startups

Lesson #266:  Managing for Net Cash Flow vs. Net Profit

Lesson #273:  Benchmarking SaaS Financial Metrics

Lesson #319: How to Pitch a Business Investment Case to Your CFO


Lesson #4: How to Raise Capital for Your Startup

Lesson #5: Finding Angel Investors for Your Startup

Lesson #10: How Best to Approach VC's or Angel Investors

Lesson #27: How VC's Define a Backable Management Team

Lesson #32: How to Value Your Startup Business

Lesson #49: How to Get a Loan, or Not!!

Lesson #66: Preparing for a Due Diligence Process

Lesson #97: Securing a Small Business Grant

Lesson #102:  Protect Your Equity & Control Post Financings

Lesson #103:  The Evolving Venture Capital Market

Lesson #109:  Financing With Equity vs. Debt vs. Convertibles

Lesson #111:  Crowdfunding Startups

Lesson #115:  When to Trade Equity for Services

Lesson #116:  Seed Investment Terms & Trends

Lesson #119:  How to Screen Venture Capitalists

Lesson #123:  Crowdfunding Details Starting to Emerge

Lesson #124:  Vesting of Founder's Stock

Lesson #125:  How to Bootstrap Your Startup

Lesson #126:  What Startups Need to Secure a Bank Loan

Lesson #138:  Why VC's Bias Technology Startups

Lesson #140:  How to Build a Bridge to a 10x Return for VC's

Lesson #147:  Avoid "The Death Zone" for Venture Capital

Lesson #148:  How to Research Industry Valuation Multiples

Lesson #149: Can't Attract Venture Capital? Buy a Business with Private Equity!

Lesson #152:  The Importance of a "Clean" Capitalization Table for Investors

Lesson #173:  Corporate Venture Capital Funds, Accelerators & Incubators

Lesson #199:  Seed Investment Terms Trending More Founder-Friendly

Lesson #206:  The 4 M's of Evaluating Startups

Lesson #213:  The Birth of Crowdfunding Agencies

Lesson #220:  Venture Debt Financing, a Hybrid Between Debt and Equity

Lesson #226:  What Exactly is Venture Capital?

Lesson #233:  Key Red Flags for Startup Investors

Lesson #239:  Manage Towards Valuation Step-Ups

Lesson #243:  What is Your Digital Business REALLY Worth?

Lesson #255:  Crowdfunding Works--Monies Raised, Jobs Created

Lesson #262:  A Venture Capital Playbook Over Time

Lesson #264: Financing Mergers & Acquisitions

Lesson #277:  Revenue Share Loans

Lesson #322:  Need Venture Capital?  Take Your Company Public in Canada!

Lesson #324:  A Guide to Small Business Loans

VIDEO:  George Deeb Discusses if Investors Bet on You or Your Idea (on ASBN)


Lesson #2: Building The Right Team for Your Startup

Lesson #9: Spreading Equity to Key Employees & Partners

Lesson #13: Creating the Right Culture for Your Startup

Lesson #14: The Role of a Startup CEO

Lesson #15: Hands-On vs. Hands-Off Management of Startups

Lesson #16: The Plusses & Minuses of Virtual Employees

Lesson #18: The Right Work-Life Balance for a Startup

Lesson #30: When to Hire Employees vs. Contractors vs. Crowdsources

Lesson #34: How Best to Recruit Employees For Your Startup

Lesson #35: How to Read Resumes & Screen Employee Candidates

Lesson #42: Is Working With Family Members a Good Idea?

Lesson #51: No Public Displays of Rejection

Lesson #55: Creating a Healthy Office Environment

Lesson #58: How to Determine Employee Compensation

Lesson #59: Determining Employee Benefits for Your Startup

Lesson #60: Importance of Employee Handbooks

Lesson #75: How to Implement Layoffs

Lesson #76: How to Implement an Employee Change

Lesson #83: Startup Roles & Responsibilities

Lesson #93: Make Your Employees Feel Appreciated

Lesson #106:  Succession Planning

Lesson #127:  How to Screen Salesperson Candidates

Lesson #153:  Healthcare Benefits Decisions for Startups (Post Obamacare)

Lesson #156:  How to Find a Co-Founder for Your Startup

Lesson #157:  Consider Sharing Part-Time Executives Between Startups

Lesson #159:  Never Stop Recruiting (Even If No Current Openings)

Lesson #163:  Should a Startup Offer Employee Benefits

Lesson #165:  The 4 Types of Entrepreneurs. Which Type Are You?

Lesson #166:  Is Entrepreneurship Learned, or Wired Into Your DNA?

Lesson #175:  In-House Teams or Outsourced Services for Startups?

Lesson #181:  Should You Quit Your Full-Time Job Before Launching a Startup?

Lesson #188:  When Picking a Startup to Join, Focus on the Company (Not the Role)

Lesson #196:  The CEO's Role Must Evolve Between Early Stage and Growth Stage Companies

Lesson #210:  Need a Salesperson?  Recruit Three!

Lesson #217:  Millennials Wreaking Havoc on Employers, or Vice Versa??!!

Lesson #219:  Stock Option & Incentive Plans for Startups

Lesson #222:  Measuring Your Company's Culture Can Pay Big Dividends

Lesson #247:  The Key Drivers of Company Culture

Lesson #249:  Executive Compensation Benchmarks for Growth-Stage Companies

Lesson #250:  Personality Testing On The Rise, But Why?

Lesson #254:  Managing For Meteoric Growth--A Home Chef Case Study

Lesson #259:  With Human Talent, You Get What You Pay For

Lesson #269:  Want Hard Workers?  It Starts With You!

Lesson #274:  Do You Need a RE-Founder for Your Business?

Lesson #281:  Avoid Internally Shuffling People Into Wrong Roles

Lesson #283:  Marketing Roles & Compensation

Lesson #285: How to Recruit & Retain Rockstar Talent

Lesson #291:  Properly Classify 1099 Contractors vs. W-2 Employees to Avoid Legal Troubles

Lesson #292:  Should You Clone Yourself When Hiring?

Lesson #293: Don’t Be Afraid of Hiring Former CEOs as Employees

Lesson #305:  The Pluses and Minuses of Virtual Teams

Lesson #309:  The Risks of Candidates Climbing Back Down the Corporate Ladder

Lesson #311:  It's Time to Rethink the Pyramid-Shaped Org Chart

Lesson #317:  The Best Employees Have These "31 Flavors"

Lesson #318:  A New Workforce Optimization Algorithm

Lesson #340:  The Top 4 Things to Study When Hiring New Employees

VIDEO:  George Deeb Teaches Startups How to Build Team and Advisors

VIDEO:  George Deeb Discusses Recruitment Strategies


Lesson #33: The Importance of Customer Service

Lesson #41: Security Considerations for Your Startup

Lesson #56: Frequent Legal Questions of Startups

Lesson #62: Insurance Protection for Startups

Lesson #70: Protect Your Intellectual Property

Lesson #73: Consumer Usability Testing

Lesson #80: Pitfalls to Avoid When "Reeling in the Whale"

Lesson #82: Project Management & Prioritization

Lesson #129:  "Productize" Your Business for Maximum Efficiency

Lesson #134:  Where to Best Locate Your Startup

Lesson #183:  The Top 12 Reasons to Protect Your Trademarks

Lesson #194:  Operations & Sales Must Be Tied to the Hip (Break Down Silos)

Lesson #205:  Setting Up Your Back-Office Functions

Lesson #236:  E-commerce Fulfillment Strategies

Lesson #240:  Document Your Processes, Before They Walk Out the Door!!

Lesson #254:  Managing for Meteoric Growth--A Home Chef Case Study

Lesson #267:  Score One for Brick and Mortar Retail--An Disaster Case Study

Lesson #290:  Too Many Meetings Suffocate Morale & Productivity

Customer Service Case Study:  Had Your Identity Stolen?  Hope Thief Didn't Buy Verizon!!

Customer Service Case Study:  A Nightmare at Disneyland!!

Customer Service Case Study:  BCBS are Criminals!!

Customer Service Case Study:  My Wacky Website Weekend!!


Lesson #36: Picking the Best Technology for Your Web Startup

Lesson #117:  Legal Considerations When Using Open Source Software

Lesson #150:  Responsive Web Design for Multiple Devices

Lesson #155:  Best E-commerce Platforms for Small Business

Lesson #172:  Don't Finalize Your Tech Development Plan, Until You Involve Marketing

Lesson #189:  How to Price Your Software Technology

Lesson #197:  R&D and Sales Must Be Tied at the Hip (Break Down Silos Part 2)

Lesson #232:  Do You Own the Copyright to Your Own Technology?

VIDEO:  George Deeb Teaches Product Development for Startups

Chicago's Top Web & Mobile Design and Development Agencies


Lesson #84: Lady Gaga--An Entrepreneurial Case Study

Lesson #89: Startup Lessons from Scrabble

Lesson #91: My Entrepreneurial Heroes

Lesson #94: Netflix--A User Experience Meltdown

Lesson #154:  Entrepreneurial Lessons from Breaking Bad

Lesson #177:  Entrepreneurial Lessons from the Game of Monopoly

Lessons in Leadership:  Michigan Football

Lessons in Leadership:  Mount Everest

Lessons in Leadership:  The Race for the South Pole

Lessons in Leadership:  Tim Tebow

Lessons in Leadership:  Joe Paterno

Lessons in Entrepreneurship:  StyleSeek Case Study

Lessons in Entrepreneurship:  Emerson Spartz

Lessons in Entrepreneurship:  My Son's Kindergarten Class

Lessons in Entrepreneurship:  Pebble's $10MM Raise Via Kickstarter

Lessons in Entrepreneurship:  Moneyball (Big Data in Baseball)

Lessons in Entrepreneurship:  Skylanders (Upselling on Steroids)

Lessons in Entrepreneurship:  Rocket Internet (Copy Catting)

Business Lessons from NBC's "The Sound of Music Live"


Lesson #46: 23 Motivational Quotes for Entrepreneurs

Lesson #57: Required Reading for Startup Entrepreneurs

Lesson #101: The Plusses & Minuses of Entrepreneurship

Lesson #203:  Top Startup Blogs and Bloggers

Lesson #204:  Startup Accelerators by Industry

Lesson #288:  How to Build a Startup Ecosystem

Lesson #304:  Top 4 Ecommerce Trends of 2018

Lesson #306:  Startup Ecosystems Accelerate Success--Why Bigtincan Relocated from Australia

Lesson #314: The Only Winners in Ecommerce? Amazon, Google and Facebook!

Lesson #326: Kids Can Be Entrepreneurs Too!! (Pay Attention School Administrators)

VIDEO:  George Deeb Presents "The Birth of the Startup Excubator" at Techweek Chicago 2014

VIDEO: George Deeb Evangelizes Tech Coding for Core K-12 Curriculum

VIDEO: George Deeb Talks Startup Marketing, Hot Chicago Startups & Coding in Schools with Tasty Trade

VIDEO:  George Deeb Discusses Startup Incubators and Accelerators on ASBN

PODCAST:  George Deeb Discusses Entrepreneurial Lessons with Local SEO Today

Chicago's Startup Accelerators, Incubators & Co-Working Spaces

Chicago's Best Lawyers for Startups

Raleigh-Durham's Best Lawyers for Startups

Reflections After a Year in Raleigh-Durham

My Life's Annoyances Which May Stimulate Startup Ideas

Howard Tullman's Acceptance Speech at Chicago Entrepreneurship Hall of Fame

Lessons From the Lost Decade: Alternative Investing

Nostradeebus:  Predictions for the Next Decade

Key Digital Investment Themes in 2012

Digital Trends for 2013

Great Stories of Survival--Motivational Reading for Startup Entrepreneurs

Is Anybody Else Worried About Our Future?

[BRACKETOLOGY]  Elon Musk Voted Best CEO

A Successful Career--But My Best is Yet to Come!

North Carolina Venture Capital Trends (2015-2019)

Wednesday, September 28, 2011

Lesson #101: Plusses & Minuses of Entrepreneurship

Posted By: George Deeb - 9/28/2011

I finally made it to my goal of writing 101 Startup Lessons, with this being my last lesson of this series designed as a handbook for e...

I finally made it to my goal of writing 101 Startup Lessons, with this being my last lesson of this series designed as a handbook for entrepreneurs.  But, instead of a tactical lesson as my swan song, I thought I would speak more from the heart on the emotional plusses and minuses of entrepreneurship, and long term implications of starting your own business.


Being Your Own Boss.  Once you get the taste of being your own boss, it is very difficult to ever go back to being a "cog in the wheel" within a big corporate environment.  Nowhere else can you get the thrill of making senior level decisions across a wide range of business topics (e.g., strategy, finance, marketing, technology, operations).  The buck stops with you (literally!), and the success or failure of your business falls squarely on your shoulders, based on the decisions made by you and your team.  That may sound a little daunting, at first.  But, trust me, it is very exciting.

The Speed of Doing Business.  Startups move at "light speed" compared to the procedural, political and bureaucratic morass of big corporations.  If you want to do something as a startup executive, you make a quick decision within the snap of a finger, without multiple layers of approvals and procedures.  This can make for a really exciting environment, watching the twists, turns and outcomes from your actions in "real time".

The Feeling of Accomplishment.  Launching and building a successful startup is the equivalent of having and raising a baby.  And, when your startup achieves its desired outcome and long term success (just like seeing your baby grow into a well-mannered and respected college graduate), it truly creates a real feeling of accomplishment, looking back and saying "hey, I did that!".  Nobody really appreciates how hard it is to turn a "piece of paper idea" into a thriving business, unless you actually have done it yourself.  So, don't be afraid to pat yourself on the back, for taking the hard road and a job very well done.


Living Like a Pauper.  Let's face it, it is not easy plowing all your hard-earned savings into a risky startup, not getting paid in the early months of getting the business off the ground and not being sure where your next paycheck is coming from.  Unfortunately, unless you are wealthy from other means, launching a startup with hopes of a long term payback, often comes with the strings of living very frugally until the business gets its "sea legs" beneath it.  If you need the comfort and security of bi-weekly paychecks to cover your bills or lifestyle, don't get involved in the early stages of a startup.

High Stress Level.  Obviously, with weak cash flow and other business constraints, comes constant worry and stress.  Launching a startup was a big gamble: (i) you quit your comfortable job; (ii) you put all your savings (and those of your friends and family) at risk; and (iii) you will end up with nothing but life lessons learned and a "black eye" with your investors if the business goes under.  That is a big burden to carry around each day.  So, if you are not good when dealing with stressful situations, a startup is not right for you.

Impact on Your Resume.  Before being an entrepreneur, I was a big-bracket investment banker to Fortune 500 executives.  Nobody told me after 12 years of being an entrepreneur, that big company recruiters would label me an "early stage guy", making it very difficult to break into any business generating in-excess of $100MM of revenues.  Don't get me wrong, I love being involved in startups.  But, I would at least like to control my own career destiny, if I ever desire to try my hand at being a CEO of a bigger business.  The longer you are involved with startups, the more difficult it will be at turning back from a lifelong career in early stage companies.

Being an entrepreneur is not right for everyone.  Make sure you have a real appetite for the risks at hand, a real passion for your product and an unbridled confidence in your ability of building a great business, before jumping in.  But, once you do make the leap, hang on for one of the wildest rides of your life!!  As starting and growing your own business really is one of the most-rewarding life experiences you can have.

I hope you have enjoyed these life-learned lessons.  Make sure to keep these 101 Startup Lessons handy, and reference them as business challenges arise.  And, be sure to share them with your entrepreneurial friends who may also find them useful for building their own businesses. 

It has been a real pleasure having you share this editorial adventure with me. 

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Tuesday, September 27, 2011

Lesson #100: The Definitive Checklist for Startup Success

Posted By: George Deeb - 9/27/2011

Over the last six months, I have shared many lessons with you on how best to build your startup.  Below is a checklist of the most impor...

Over the last six months, I have shared many lessons with you on how best to build your startup.  Below is a checklist of the most important "must-haves" for any successful startup:

___  A good business idea--"secret sauce" solution to real world problem  (Lesson #1, Lesson #112)
___  A well-thought out business plan and recurring revenue model (Lesson #7, Lesson #78, Lesson #108 and Lesson #132)
___  A large and growing industry, where a big business can be built (Lesson #118)
___  A firm handle on current and future competition (Lesson #19)
___  Defensible barriers to market entry (Lesson #43)
___  An experienced board of directors or advisors (Lesson #12 and Lesson #45)
___  A deep network of colleagues in your startup ecosystem (Lesson #47 and Lesson #85)
___  A motivating and credible CEO (Lesson #14)
___  An experienced and backable start-up team  (Lesson #2, Lesson #27 and Lesson #83)
___  Appropriately compensated employees (Lesson #58 and Lesson #59)
___  Equity in hands of key managers (Lesson #9)
___  An entrepreneurial office culture (Lesson #13)
___  A healthy office environment with work-life balance (Lesson #18 and Lesson #55)
___  A religious focus on putting your customer first (Lesson #33)
___  The right product and pricing strategy (Lesson #20)
___  A profitable and tested "go to market" sales and marketing plan (Lesson #21)
___  Infectious enthusiasm and passion for business (Lesson #50)
___  A clear management focus on what you are building (Lesson #40)
___  Speed to market and knowing when to cut losses (Lesson #71)
___  Disciplined decision making skills (Lesson #87)
___  Flexibility to fine-tune model and navigate challenges (Lesson #8 and Lesson #31)
___  Persistence in goods times and bad (Lesson #29)
___  The right mix of intangibles that investors are looking for (Lesson #86)
___  Market timing and luck (Lesson #3)

And, more specifically, do not approach professional venture investors until you have acheived:

___  A good mix of the "must-haves" above
___  A sufficient proof of concept based on key milestones (e.g., revenues or visitor traction) (Lesson #122, Lesson #128)
___  Your planned go-to-market strategy tested and profitable (Lesson #120)
___  Meaningful customers under contract who would be solid references
___  A sizable pipeline of customers in the works
___  Key industry partnerships with brand-name marketing partners
___  Clarity you fit the types of investments your target investor makes
___  A fine-tuned elevator pitch, to get their attention
___  A credible "road map" for investor to realize 10x returns within 5 years (Lesson #140)
___  Realistic thoughts on potential exit options and buyers
___  A realistic expectation on valuation to attract capital (Lesson #32)
___  Clear handle on how much money you need, including cushion to last 18 months
___  Logical use of proceeds invested in future growth (not past debts)
___  A debt/equity investment structure that works for the investor (Lesson #109 and Lesson #116)

For this second list, please re-read Lesson #4--How to Raise Capital for Your Startup and Lesson #10--How Best to Approach VC's or Angel Investors.  And, be sure to watch this video presentation I made on How to Pitch Venture Investors.

So, keep this startup checklist handy.  If you check-off most of the items on the above list, you should be "off to the races" in building a winning business that should attract smart venture investors for your business.  Wishing you the world of success (and luck) in your entrepreneurial adventure.

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Monday, September 26, 2011

Lesson #99: The Basics of Direct Mail Marketing

Posted By: George Deeb - 9/26/2011

With the invention of email and mobile marketing, I assumed the direct mail marketing business would slowly die on the vine, given the h...

With the invention of email and mobile marketing, I assumed the direct mail marketing business would slowly die on the vine, given the heavy expense of producing and mailing the marketing materials. That may ultimately become its fate, as younger users, who prefer electronic media, get older. But, today, particularly for an older demographic, direct mail is still heavily used, particularly by catalog retailers, tour operators and vendors of local services. Today's lesson will summarize the basics of direct mail marketing.

The key things that drive the success of a direct mail campaign are: (i) the cost to produce and mail the piece; (ii) the type/quality/customization of the marketing piece; (iii) the quality/targeting of the mailing list; (iv) the quality of the offer; and (v) proper conversion tracking on the backend. I will address each of these points below.

The cost of the marketing piece has six components: (a) the cost of the list; (b) the cost of design; (c) the cost of printing; (d) the cost of shipping; (e) the size of the mailing; and (f) the cost of the offer, if any. If you are mailing your inhouse mailing list, there is no cost of mailing to your own names. But, if you are renting a mailing list from the major services like Experian, or dropping to a targeted media partner's list like Forbes Magazine, there are typically fees of $25-$50 per 1,000 names pulled to access such list (which can certainly add up the more names you pull). The cost of design will be cheaper by using your on-staff creative designer than using an agency, which can cost 15% more for the hourly time invested in the piece. Design costs can certainly add up depending on whether you are dropping a one-side post card or a 100 page catalog.

Printing costs can wildly vary based on where you have the piece printed and how big the piece is. One of the cheapest places for printing is South Korea, even after including the overseas shipping costs. So, depending on the size of your run, consider both domestic and overseas options, via the assistance of printing management companies. And, the per piece printing costs can vary from $0.10 per peice for simple postcards to $2.00 per piece for fancy catalogs (understanding per unit prices will be lower for higher volume runs than lower volume runs). A typical test run would not be less than 5,000-10,000 pieces, since the conversion rate on direct mail is only like 0.2%, on average. Dropping any fewer pieces is unlikely to deliver any conversions. And, on the high end, mailings can get into the millions depending on your budget and the size of your target market (e.g,. marketing toothbrushes that appeal to 100% of market; or Kenya safaris that appeal to 10% of market).

In addition, variables like four-color printing on thick page stock, will cost more than black and white postcards on thin page stock, so plan accordingly in your budgets. But, don't cheap out here. You are trying to break through the clutter of junk mail going to the mail box that most likely gets tossed unnoticed (hence the low conversion rates). So, an eye-popping creative will get their attention better than a bland creative. And, where possible, digital printers now have the flexibility to customize the printing to the recipient level. They can swap-in a person's name into the creative, or swap-in a man's photo for male recipients vs. woman's photo for female recipients. So, ask about these customization options with your printers.

And, don't forget, you are going to have to pay the U.S. Postal Service to get these pieces to the homes of your target recipients. Postage rates can vary significantly (from $0.15 to $2.00) based on the size of the piece, and whether or not they are pre-sorted. So, don't forget to include the postage costs in your budgeting process, and use a mailing service to assist you here with the pre-sorting process to help lower your postage costs.

Given the huge expense of direct mail, I am always a fan of doing more with less with your creatives. Dropping a postcard with a 50%-off offer, with more details available on the website, is more cost effective than dropping a multi-page piece detailing the offer by mail. Think of it as using the piece to get recipients to "self select" themselves into wanting to learn more. Tour operators are pros at this. They don't use 100 page catalogs for new customer acquisitions, given the heavy expense. Instead, they send a post card asking the recipient to profile themselves in terms of their desired trips and activities. And, then, they drop targeted catalogs to such recipients after they get their postcards replies back.

More important than anything is making sure your mailing is targeted to users that are actually interested in your products. As an example, at iExplore we had a lot more luck direct mailing the National Geographic list, than we had direct mailing the Gourmet Magazine list, even though they both served similar high-end demographics. And, as another example, if you are selling a new computer networking product, that is going to get a much higher response from CTO's than CEO's, and better yet, a list of systems network adminstrators would perform better yet. And, as another example, if you are a Nursery School looking for new students for your school in Winnetka, IL, limit your direct mailings to zip code 60093, the most logical direct marketing area (DMA) to pull students from. You can do sophisticated PRISM analyses to help you identify which zip codes are most appropriate to market your product or services (e.g., which zip codes have the highest average income). The better the targeting, the better your ROI. Period.

And, don't forget, mailing lists go stale at a rate of 20% per year with people moving to new addresses. So, make sure you are dropping to a freshly updated list to make sure your mailing gets to your desired recipient. I would avoid any lists older than one year old.

The quality of the offer is also important. And, what you think may be exciting to consumers, may not be. So, do a few small tests with variable offers to see which one performs best, before dropping to a much broader list. But, in all cases, I am a huge fan of: (a) some special offer; and (b) a deadline to redeem such offer, to create a sense of urgency. So, at iExplore, we would not send a generic "learn more about iExplore" mailing. We would send a specific and meaningful offer like, "save $1,000 on any new booking made within 30 days" (which can materially increase the cost of the overall direct mailing including the other costs above, so make sure you have enough margin to work with here to cover all costs, including the offer).

And, if you are a catalog marketer. Think of each quarter page of your catalog as a unique piece of real estate. You want to slot merchandise in each quarter page that converts at the same high level. If you have any slow sellers, swap them out for higher producers. Each inch of real estate matters in optimization the ROI from your expensive direct mail efforts.

And, underlying all of this is proper conversion tracking on the backend. There is a reason all catalogers ask you to read them the six digit tracking code in the pink box on the back of the catalog. They want to know what piece you are calling from, and see if the buyer is the same person the catalog was sent to, or if a new person not on the original list is calling, who borrowed the catalog from a friend. But, most importantly, they are adding up all the sales/profits from the direct mail piece, to compare it to their total costs of the piece for calculating the ROI from that initiative. Then, they are able to fine tune and tweak future pieces with the learnings therefrom. The best direct mailers are the ones that have done it for years and have optimized accordingly with each iteration (e.g., so not necessary the best tactic for startups with limited budgets).

Direct mail is a very big topic that deserves more space than allocated in this short lesson. But, frankly, as a startup, your marketing dollars may be more efficiently spent in other areas (e.g., search engine marketing, emailings, social media). So, make sure you have fully exhausted your higher ROI tactics before getting into the expensive world of direct mail.

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