11 July 2007

Lessons learned

During the past year I have reviewed several dozen business propositions, talked with founders, entrepreneurs, angel investors, venture capitalists, and plain old rank and file business people. I've been in search of the the holy grail of business opportunities - and have yet to find it (but that is the definition of the holy grail isn't it?)

Along the way, I learned and confirmed some business truths that I thought were worth sharing.


  • There is lots of it available in the market. Even VCs have more capital than they can manage themselves.
  • Valuations are always astronomical for other companies (i.e., not yours).
  • Angel capital usually comes from people who have too much time on their hands and put their noses in places in which they have no expertise.
  • Just because you have money to invest does not make you smart – in fact there may be an inverse correlation. (Thanks to Harry Gruner at JMI for that truism).
  • Money alone can’t help a bad venture or a good venture with a bad management team.
  • You probably can’t succeed without it.
  • If you continually have too little of it, you either are spending too much time looking for it, your valuation is stupid, your management team is inept, your venture is not worthy, or more likely all of the above.
Management Talent

  • There is not enough to go around.
  • In the land of the blind the one eyed man is king.
  • A combination of business savvy and engineering talent is virtually non existent.
  • Most techies would disagree.
  • Just because you are a founder, does not mean you deserve to run an organization (unless you are the only employee).
  • Good management techniques transcend most industries.
  • If you think your industry (or business) is different, you are wrong.
  • Founders who hold the title of CEO only because they started the company are usually in the wrong job.
  • Founders who have this epiphany, can actually become good CEOs.
  • Friends and family teams are usually all that is necessary to burn down a very promising venture.
  • Most bad management teams don’t agree with any of this.


  • You can’t risk your success on the back of one or a small team of technical people who don’t believe in technology transfer as a priority.
  • As a CEO if you don’t understand it, over time you still won’t get it.
  • It is highly overrated.
  • Companies that start with great technology and succeed have figured that out.
  • In order to succeed, your technology actually has to solve some problem.
  • Creating the problem just so your technology has something useful to do just won't cut it.


  • Great sustainable sales only exist in an environment where there are processes and metrics.
  • If you claim to have metrics, but don’t track them or can’t recite them, you are fooling yourself.
  • If you think your business is different and you don't need metrics, you are wrong.
  • Great sales talent is not personality based – it is process based.
  • If you are not concentrating on how to create reproducible sales – you won’t have any.
  • You can always spot a sales driven organization - their employees wear company-logoed clothing.


  • Believe their ventures are worth at least an order of magnitude more than people with money do.
  • Think that the money guys don’t get it.
  • Expect that splitting the pie is equivalent to shaving ice.
  • Need adult supervision.
  • Every organization has at least one.
  • If you care about how people feel about you, it’s probably best not to be his/her immediate successor.
  • There is much too much more to include (see the rest of my blog postings for more).


  • Some people thrive in the details.
  • This isn’t always bad.
  • There is a place for them in every organization.
  • I’m not one of these people.

Quality of Life

  • In today’s world this often takes center stage.
  • Working with great people, having a flexible work environment, and controlling your own destiny often count more than fewer hours in the office.
  • Working for a, with a, or just be- cause can shift this balance.


  • There is a significant variance about the propensity of individuals to accept risk, which varies over time, with the weight of their pocket books, and the size of their mortgage.
  • Potential participants in any venture have different short term vs long term needs which also varies over time.
  • Everyone says they are looking for long term wealth generation.
  • Most can’t afford to really do that.


  • No good person wants to work with assholes.
  • Most assholes would love to work with you!
  • You are only as good as the company you keep.
  • That includes clients and investors.
  • Even a bad technology can succeed with good people.
  • The converse is never true.