What would you attempt to do if you knew you could not fail?

Last week I was so fortunate as to preside as the President of the Selection Jury for the 2009 Eurecan European Venture Awards. I sat-in on many of the presentations as 25 of the finalists pitched their business plans to investors and industry experts. I was struck by how good so many of these entrepreneurs really are. I was impressed with their passion, their commitment and their dedication to a dream of creating a successful business.

If you are an entrepreneur, then be bold. Don’t settle for a safe and easy startup. They usually die. Don’t be afraid to tackle the impossible and attempt to change the world. We need more people like you.

In my training as an executive coach, I was taught to ask empowering questions. I think that one of the toughest questions to answer is the following:
"What would you attempt to do if you knew you would not fail?”

Often when I try to answer this question, I end up answering it based on what is realistic. My answers are usually determined by what is practical or do-able based on where I am now. In relation to the development of my own startup business, I tend to try to work out in my mind what I think is achievable, starting from the present moment and moving forward in small steps. The reason why this question is so difficult and yet also so powerful is that it removes the “impossible” part. What would you do if you knew - that no matter what you attempted – that you would be successful? Think about this for a moment.

Are you doing your job because it is easy and convenient? Are you going through life in a routine or are you truly questioning what is possible, pushing the limits and challenging yourself? How bold is your work and your life?

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The entrepreneurs that presented at the 2009 Finals of the European Venture Awards were bold. I applaud them for their guts, their determination and their perseverance.

p.s., There were four technology tracks in the competition (2 for ICT, cleantech and life sciences) and a best elevator pitch award. The winners were:

• Life Sciences - Biomodics (DK) - A fantastic catheter invention that can save millions of lives each year from unnecessary hospital infections. (see www.biomodics.com). This company was voted the overall 2009 winner. Congratulations to Peter Thomsen! Great product and excellent company.
• Cleantech - Ash Dec (AS) - A unique environmental system that can generate energy and recover phosphates (an inorganic chemical that is limited and essential to life on earth) from from waste (see www.ashdec.com). This product really opened my eyes to the importance of phosphates to our planet. CEO is Ludwig Hermansen.
• ICT 1 - Liquivista (NL) - Electrowetting displays reduce power consumption and increase readability for electronic devices. These displays may replace LCD panels someday and show up in mobile phones, cameras, iPods and all other types of devices. (see www.liquavista.com) The CEO is John Feenstra. Great technology!
• ICT2 - Softkinetic (NL) - This company was one of my favorites because I am an IT software geek at heart. It is a developer kit and programming environment for 3D cameras allowing software producers to create games, interactive digital entertainment, interactive marketing and consumer electronics. This allows you to play like with the Wii2, only without any hand-held devices. Check out the videos on their website. (see www.softkinetic.net). CEO is Michel Tombroff. Watch this company. They will do well.
• The Best Elevator Pitch Award went to: Agnitio (ES) - Ms. Sapna Capoor - which is a company that has developed voice recognition technologies for forensics, law enforcement and intelligence needs. They already have the US Homeland Security organizations as clients and are some of the world's leading experts in their growing field.

Want to turn-around your business and achieve results in record time? Contact me to discuss Executive Coaching, Group Facilitation and Management for Hire services for technology companies. You can learn more at www.ricksalmon.com and at www.xelerator.com.

Rick Salmon is an energetic entrepreneur who believes that this beautiful world that we have created needs our help. Subscribe to this newsletter/blog to receive frequent updates and tips.

The perfect ski run

I watched the crazy downhill guys on TV yesterday. As these skiers were getting ready to plunge down the icy slopes of a mountain at speeds of up to 140 km per hour, they prepared themselves by closing their eyes and envisioning skiing the course, turn for turn, in an absolutely perfect ski run. With eyes closed, they leaned left, then right, going down, up and through the entire course. I guess that they also saw themselves winning the gold medal and standing on the podium with a shiny trophy raised overhead in victory.

So why do they bother to do this? Does mental practice really affect performance? Is this just silly “positive thinking” jargon or does this really have a measurable impact? In one of the most well-known studies on creative visualization in sports, Russian scientists compared four groups of Olympic athletes in terms of their training schedules:

• Group 1 = 100% physical training;
• Group 2 - 75% physical training with 25% mental training;
• Group 3 - 50% physical training with 50% mental training;
• Group 4 - 25% physical training with 75% mental training.

Group 4, with 75% of their time devoted to mental training, performed the best. "The Russians had discovered that mental images can act as a prelude to muscular impulses." [1]

Not only can visualization affect things like muscular impulses, but it can also affect future outcomes. I have learned that if I consciously create a future outcome in my mind, and if I also give it energy and then start to act as though it were already reality, then as if by magic, people and events are drawn towards this outcome. If you first create an image in your mind, then you will create a possible future outcome. Your thoughts will quickly become things, but they have to first be consciously created. I have used visualization exercises with entrepreneurs for many years and have been amazed by the positive results and the power of this type of thinking.

Visualization works surprisingly well for athletes and also with most other endeavors here in life. It is one of those almost magic things that if we all understood it better, we could probably change the world. Children should be fed this powerful tool with breast milk. Whether you are trying to ski down a mountain, start a business or change something in your life, start with visualization. Create the future you want in your mind and the results will probably surprise you, just like a perfect ski run.

Want to turn-around your business and achieve results in record time? Contact me to discuss Executive Coaching, Group Facilitation and Management for Hire services for technology companies. You can learn more at www.ricksalmon.com and at www.xelerator.com.

Rick Salmon is an energetic entrepreneur who believes that this beautiful world that we have created needs our help. Subscribe to this newsletter/blog to receive frequent updates and tips.

(1) Robert Scaglione, William Cummins, Karate of Okinawa: Building Warrior Spirit, Tuttle Publishing, 1993, ISBN 096264840X.
Photo: http://www.onthesnow.com/ots/images_i/nr/3007.jpg

"How much to buy your baby?"

All mothers think that their babies are beautiful. OK, if not really beautiful, then certainly much more special than all the others... There is something primal in humans that makes us seek to find endearing qualities in our offspring. How much would you be willing to sell your baby for?

I have had 3 different calls this week from entrepreneurs asking about how to value their startup companies with early investors. How do you put a “fair” value on your startup company?

Valuation is certainly one of the most difficult aspects and many deals die here. Ask for too much and the investor will turn and run. Ask for too little and you lose your motivation & end up with nothing. The saying is that the only suitable investors for early stage companies are the 3 F’s: Friends, Family and Fools. Early stage investing is risky. Very risky, but if you are going to pitch your business to early-stage Seed or Angel Investors, then you need to carefully consider the valuation that you will propose and remember that your baby may not be as special as you believe.

There are really two different objectives of an early-stage investment. The first objective is obviously the cash. You need enough to support your activities until the breakeven point where you will have enough sales revenues to pay for your growth plans. A second objective is that an early-stage investor will become one of your closest partners and have a direct effect on the success or failure of your business. Too many entrepreneurs only focus on getting the money and forget that choosing an early investor is just as important as hiring a key colleague or choosing a wife. Establishing a fair valuation will set the stage for fair treatment by your investors. Doing the opposite is a proven recipe for disaster and court battles that the entrepreneur seldom wins.

Ron Conway, a famous angel investor from Silicon Valley, was recently quoted as saying, "I will not talk to an entrepreneur about valuations for more than five minutes. If they want to talk more than five minutes, I probably do not want to invest."

Conway's logic is so simple and straightforward and built on so much commonsense it is difficult to dispute. The valuations for pre-seed startups, regardless of the ups and downs of the economy and venture marketplace are level and consistent… Oh, sure, there's the exception, but if you're a rational entrepreneur or investor, you wouldn't want to bet on identifying it before investing.

Much more important, as Conway's logic seems to run, is the capability of the management to grow the company to, say, $50 million. An entrepreneur who spends time focusing on pre-seed valuation probably doesn't understand valuation, which probably means the entrepreneur does not have the vision and ability to put a company on the path to high growth.
From the article entitled: Is Valuation a Key Issue in Funding Startups?
by George Lipper, Editor, National Association of Seed and Venture Funds (NASVF)

A study in 2007 by the US National Venture Capital Association showed that the average pre-money valuations of early stage startups has been surprisingly consistent over the years. The values in 2009 are surely a bit lower, but the interesting thing to note is that the values increase dramatically depending on the development stage of the company. In 2006, the average pre-money valuation of a startup was $3.38 Million. Note that if a company was at the point where products were already developed and ready for market, that the average value was $15.50 Million. If a company has already started shipping products, but was not yet profitable, then the average value jumps to $22 Million. After breakeven the average valuation is $27.65 Million. The most interesting lesson here is for entrepreneurs to understand how important it is to wait as long as possible before seeking funding and setting valuation. What development stage is your startup company at? What can you do to move to the next development level (and thereby get a much higher valuation)?

How you actually determine the valuation (ROI, Future Cash Value, Risk assessments, etc.) is something for another and a more detailed article. In the meantime, get clear on your objectives with seeking funding and choose your investment partners carefully… And make your baby really special!

Want to turn-around your business and achieve results in record time? Contact me to discuss Executive Coaching, Group Facilitation and Management for Hire services for technology companies. You can learn more at www.ricksalmon.com and at www.xelerator.com.

Rick Salmon is an energetic entrepreneur who believes that this beautiful world that we have created needs our help. Subscribe to this newsletter to receive frequent updates and tips.

Picking the Winners

How do you pick future champions while they are still young and developing? How do you identify a talented team of entrepreneurs at an early stage? How do you measure the real potential of a startup business?

In the world of sports it has long been a quest to pick the future champions from among the young. There are DNA tests, muscle tests, enzyme tests, psychology/personality tests, but in spite of a lot of fancy technology no one has really figured out how to do this effectively. It comes down to a gut feeling about the innate qualities of a competitive athlete. Yes, there are physical issues to consider, but once those basic criteria are met, then it comes down to the spirit – the mental game. How tough a competitor is this kid really? In sports you will sometimes find kids who are big – bigger than the other kids their age – and therefore better at their sports. Will these kids be the top performance athletes later? Most of the time the answer is no. Look for the little guy who has had to work twice as hard as the bigger kids – the one who has an unstoppable attitude – and you will find the future winners.

I have recently been asked to be the President of the Selection Jury for the 2009 European Venture Awards and I am thinking a lot about selection criteria. Over 700 startup companies have competed in this year’s competition. They are all smart people. They are all talented in some field. They are all entrepreneurs seeking assistance to give birth to their companies, but how can we pick the real champions? Hint: It’s not about the technology. It’s not about the products or the services or the implementation and adaptation of science… It’ about the people.

Find the little guys with unstoppable attitudes and you will find the future winners. I saw a report by the US Venture Capital Association last year where they had statistics on the valuations of early stage investments by Seed and VC investors. Only 10% of the value was attributed to IP, patents and technology. 5% was attributed to the actual market that the company was targeting. What surprised me most was that 85% of the valuation was attributed to the team. It’s all about the people.

Author Jim Collins (http://www.jimcollins.com) has proposed THE BUS THEORY. It states that if you can just get the right people on your bus and get them into the right seats, then you will figure out how and where to drive the bus in order to succeed. Your business is your bus. Get the right people onboard and you can easily fix a faulty business model. Get the wrong people onboard and you will quickly drive it into a ditch. Picking winners is all about the people.

Want to turn-around your business and achieve results in record time? Contact me to discuss Executive Coaching, Group Facilitation and Management for Hire services for technology companies. You can learn more at www.ricksalmon.com and at www.xelerator.com.

Rick Salmon is an energetic entrepreneur who believes that this beautiful world that we have created needs our help. Subscribe to this newsletter to receive frequent updates and tips.

Be Careful What You Believe

Henry Ford is one of my heroes. He was a pioneer of large-scale mass production, he founded the Ford Motor Company and produced the Model T in 1909 - a product that forever changed the world’s idea about what was truly possible.

In 1900 automobiles existed and most people had seen them, but they were very expensive and available only for the very rich. Henry Ford had a dream of making the automobile available for the common man. To build a single car at that time it took an average of 13.4 hours. Each car was basically assembled by hand. By creating innovative new manufacturing techniques, Henry Ford reduced the average production time to 93 minutes. He continually worked to improve production methods until he was eventually able to produce a Model T every 24 seconds and over a 20 year period he produced 15 million Model Ts. The sudden availability of these cars changed the American economy by encouraging the rapid movement of people and goods. It also changed the American people’s beliefs about what was possible when creating businesses, about manufacturing and about prosperity.

Henry Ford was once quoted as having said “Whether you believe that you can do something or whether you believe that you cannot do something, then you are correct”. If you believe you cannot succeed then you are probably correct. If, however, you believe that you can succeed, then you are also correct.

If you believe that it is difficult to start a business, then you are correct. If you believe that because you live in Europe, that it is much harder to succeed than if you lived in California, then you are correct. If you believe that without a PhD, then no one will listen to you, then you are correct. If you believe that you are not smart enough to succeed as an entrepreneur, then you are correct. If you believe that it is difficult to be an entrepreneur, then it is.

What we believe can limit us more than any other thing in life. Be careful what you believe. Be careful what limitations you put on your thinking, because this – more than any other factor - will determine what you experience and what you are able to achieve.

Since we are talking about the early 1900s, there is another good story. At that time Andrew Carnegie was a billionaire industrialist. He challenged an unknown and poor journalist named Napoleon Hill to write a book. Carnegie did not offer him any payment, but only letters of recommendation to some of the 100 most influential businessmen of the time. Napoleon Hill interviewed people like Henry Ford, Alexander Graham Bell, Thomas Edison and many others in order to try to discover what was the secret of their success. In 1934, in the midst of the Great Depression, he published the book Think and Grow Rich, which is one of the most sold business books of all time. The secret to the success of all these great men was really quite simple. Hill wrote:

“TRULY, "thoughts are things," and powerful things at that, when they are mixed with definiteness of purpose, persistence, and a BURNING DESIRE for their translation into riches, or other material objects.”

If you want to change the world, then your first step is to start to believe that you can. If you want to create a hugely successful business, then start by believing that it is possible.

“Whether you believe that you can do something or whether you believe that you cannot do something, then you are correct”.

Want to turn-around your business and achieve huge results in record time? Contact me to discuss Executive Coaching, Group Facilitation and Management for Hire services. You can learn more at www.ricksalmon.com and at www.xelerator.com.

Rick Salmon is an energetic entrepreneur who believes that this beautiful world that we have created needs our help. Subscribe to this newsletter to receive frequent updates and tips.

Rick Salmon appointed President of Selection Jury for 2009 European Venture Contest

(Oslo, Nov. 12, 2009)

Europe Unlimited has appointed Rick Salmon as President of the Selection Jury for 2009 European Venture Contest Finals which will be held on December 14th and 15th, 2009 in Barcelona. The Jury will consist of 30 distinguished members representing the Venture Capital community in Europe. The mission of this annual venture contest is to find, evaluate and award world-class innovative companies with the potential to dramatically impact their industry and contribute to increasing European competitiveness and growth. This year over 700 startup companies have competed in the contest this year and the top 25 have been chosen to go to the finals in Barcelona.

Jury members will select a winner in each of the 3 categories of cleantech, life sciences, and ICT. From the top 3 companies, 1 overall winner will be selected and awarded a cash prize of EU 90,000. The companies will be evaluated on the basis of 7 factors (including business potential, team experience, investment potential, competitive position, presentation, etc.).

Rick Salmon competed in the 2008 European Venture Contest as CEO of RPR Technologies AS (Norway) and was selected as winner of the Cleantech category. This year, he has been asked to be the President of the Jury in order to represent and promote the entrepreneur viewpoint and to acknowledge his work with empowering European entrepreneurs.

If you are an entrepreneur who plans on raising capital or expanding your network in 2010, register now for the 2010 Eurecan European Venture Contest. For more information about Europe Unlimited, see: http://www.e-unlimited.com

Worshiping Genius

“Italy worships Genius, but has not yet figured out how to create a culture of entrepreneurship”.
This was an interesting statement made by the CEO of the Italian Angels for Growth, Lorenzo Fanchini at last week’s semi-final of the European Venture Contest (EEVC) held in Turin. Italy is a country filled with brilliant scientists and engineers. There is a huge supply of new technology, brilliant engineering and mechanical precision but unfortunately a shortage of businessmen – those boring guys in business suits that focus on cash flow instead of electron flow. Don’t get me wrong. There are good businessmen in Italy, but as an outsider, I am struck by the inequality in the number of engineers.

At the event I listened to 12 startup entrepreneurs pitch their companies to a panel of judges representing venture companies. Most of the entrepreneurs were heavy-duty techies but lightweight money-guys. Why is it that technology is so sexy while a moderate but healthy cash-flow draws only yawns? I watched one biotech company presentation where the entrepreneur race through 26 disorganized slides in just 8 minutes. 25 were about technology and only 1 was about business. It stayed on the screen exactly 1.8 seconds because it painted such a dismal picture. These were scientists that live off government funding, not businessmen who produce quality customer-driven products in return for a solid profits. There was no business plan, only a lot of fancy technology. There was a second company that presented a solid business model based on already-developed products that will reach breakeven quickly and continue to generate new patents and also a healthy cash-flow. The first company got an award. The second company was sent home and told to find bigger and more sexy markets. Should investors worship genius or invest in good, solid performance companies?

At the University of Colorado School of Business I studied with two other buddies. Two of us left school and went to work in the computer industry. We have spent our careers chasing hot and fancy new technologies. The third buddy started selling coffee machines to business customers. We mocked him. We laughed and felt so superior as we worshiped our marvelous technology advances. Today, he is the one that is outrageously wealthy while we others are perhaps still chasing.

If we worship “Genius” but fail to provide seed funding for sound businessmen, then we will never create a sustainable culture of enturepreneurship.

If you are an European entrepreneur and want more information, help and assistance, suscribe to this blog. I write frequent articles about the startup companies and events that I participate in.

Want to turn-around your business and achieve huge results in record time? Contact me to discuss Executive Coaching, Group Facilitation and Management for Hire services. You can learn more at www.ricksalmon.com and at www.xelerator.com.

Rick Salmon is an energetic entrepreneur who believes that this beautiful world that we have created needs our help. Subscribe to this newsletter to receive frequent updates and tips.

For more information about the EEVC European Venture Contest,
see: http://www.e-unlimited.com

For more information about the Italian Angels for Growth,
see: http://www.italianangels.net

If you are so smart, why are you not rich?

“If you are so smart, why are you not rich?”

I saw this written on a T-shirt yesterday at a gathering of entrepreneurs. It was a blatant challenge and it made me stop and think. In looking back on my 20 years as an entrepreneur, have I failed if I am not rich? Is that really what has driven me all these years? No, not really.

I immediately wanted to change the T-Shirt to read: If you are so smart, why haven’t you changed more lives? Why haven’t you helped more people… Created more jobs… Saved more children… Made a difference in the world?

According to a recent article in the International Herald Tribune, a rising new trend is the emergence of “Social Entrepreneurship”. Young entrepreneurs are realizing that just seeking wealth will not really make them happy. Finding meaning in what you do on your route to making money is ultimately much more rewarding and fulfilling.

I may not have yet acquired the riches of a sultan in all my years with startup , but I have been able to create companies and I have had the freedom, the drive and the turbo-motivation that comes from giving birth to ideas that grow to be corporations.

If your highest personal value is the creation of wealth, then remember Howard Hughes who died alone, isolated and lonely after building one of the greatest fortunes of the last century. Go ahead and make money, but also create a better world in the process. If you are so smart, then you will get this.

Want to turn-around your business and achieve huge results in record time? Contact me to discuss Executive Coaching, Group Facilitation and Management for Hire services. You can learn more at www.ricksalmon.com and at www.xelerator.com.

Rick Salmon is an energetic entrepreneur who believes that this beautiful world that we have created needs our help. Subscribe to this newsletter to receive frequent updates and tips.

A Crisis is a Terrible thing to Waste (Part 2) – Smoke Signals

When I was a boy I loved to watch “Cowboy and Indian” programs on television. The plots were always the same. They usually started with a group of settlers – who were traveling in their covered wagons towards some dream of a better life in a faraway place. Then would come some sort of a crisis. The crisis was usually the Indians. First the Indians would signal their attack by sending up smoke signals that would be visible from far away (because the Indians didn’t have mobile phones). The smart cowboys would see the signals and take cover, but most cowboys would ignore the signals and keep right on moving along until the Indians swooped down from the hills and attacked the wagon train.

When a business ends up in a crisis, it is usually because they fail to pay attention to the smoke signals. Most of the time the signals are there on the horizon, clear and easy to see, yet they choose to ignore them. And then when the Indians swoop down upon them, they are just as surprised each time.

The first stage of any crisis is the realization that a crisis has emerged. Just like with the Indians, it usually comes as a shock but still takes a while before the reality sinks in.

So what can an entrepreneur do to see the signals? What are some of the practical things a startup business can do in order to avoid ending up in a deep crisis?

1. Take frequent Reality Checks. Ask yourself tough questions about your business and give yourself honest answers. It is better to face the facts and get prepared than to avoid them and just hope that things will improve.
2. Guard your Optimism, but Be Prepared. The Arabs have a saying “Trust in Allah, but tie up your camels”. Optimism for an entrepreneur is essential, but it can sometimes lead to difficult situations. I have observed this many, many times with startup companies.
3. Practice sound Financial Planning. I have seen over 100 entrepreneur venture pitches over the past 6 months and very few had done sound financial forecasts and cost analysis. There is a general lack of planning with startups and this is perhaps one of the biggest reasons so many struggle to get early-stage funding.
4. Hire a Board of Directors. Most startups have a Board that consists of the 2 young founders and Uncle Bob. You can avoid crisis if you have a good board of advisers who are also minority shareholders and interested in helping your company prosper and grow. Give away shares if you need to, but get the best possible people you can find and ask them to be tough on you. If this is the only thing you do from all the suggestions in this blog entry, then you will still have made a big change.
5. Stay close to your customers. Even if you don’t have customers yet, stay close to your target market. Talk with them. Ask them questions. Get their feedback. Make sure you are providing products and services that they don’t just need, but that they really want. I may need a new car for the purpose of basic transportation, but I really want that Audi TT sports car.
6. Think Long-term but Act Short-term. What I mean here is that you must keep your focus on the long-term goals and aspirations you have for your business, but you must take short-term action that provides the cash flow and resources to survive and ultimately grow. Many technology companies spend a long time developing their products, but run out of money either before they are completed or before they have been able to sell products and prove that they can generate revenues. It is much easier to get an early-stage investor to put money into your business if you can demonstrate sales revenues. Even if revenues come from services and not product sales, this does not matter. Think long-term, but act in the short-term to bring in revenue and lessen the possibility of a financial crisis for your business.

If you see smoke signals on the horizon, take action immediately. The sooner you do, the less the consequences and the pain of a crisis. If the situation has already swooped down upon you like a tribe of angry Indians, then in the next blog entry I will discuss how to circle your wagons and stage a defense. In the meantime, remember that becoming a successful entrepreneur is about the learning to master the game… and A Crisis is a Terrible Thing to Waste.

Want to turn-around your business and achieve huge results in record time? Contact me to discuss Executive Coaching, Group Facilitation and Management for Hire services. You can learn more at www.ricksalmon.com and at www.xelerator.com.

Rick Salmon is an energetic entrepreneur who believes that this beautiful world that we have created needs our help. Subscribe to this blog to receive frequent updates.

Meetings With Remarkable Men

I saw a strange French movie in 1979 that made a big impact on me. It was called Meetings with Remarkable Men and told the story of G.Gurdjieff, a philosopher who traveled through Central Asia in order to discover spirituality through dance, music, near-encounters with death and by meeting remarkable people along the way.

Over the last 24 hours I have had 2 encounters with remarkable men. Both related to my last blog entry regarding how to handle a crisis. I learned something new.

The first encounter occurred yesterday with a friend who is fighting to recover from a life-threatening accident that left his body and brain damaged and has forced him to have to re-evaluate his entire life. His courage and his determination inspire me and remind me to stay focused on what is most important here in life. His re-evaluation of his career has also reminded me of how important these types of questions really are. When we are forced, due to a crisis, to re-examine things at a fundamental level, then we sometimes get a chance to start over and re-create our lives and our businesses as we would ideally have them rather than after a pattern that merely came about over many years. Crisis is a valuable opportunity and an important process if you want to grow your business or accelerate your own personal development.

The second encounter was in a meeting with a business associate. We met over coffee this morning and discussed plans to collaborate on some workshops and marketing projects. Two things were remarkable. First, his energy level was contagious to the point that I left our meeting charged with a sense of urgency and a new determination to attack the problems that this crisis has presented. Second, as we were parting he said “Thank you for being you”. I realized that in light of the current crisis, my true self - my true colors are being freed and are shining through. Adversity brings out the best in us if only we let go and don’t fight it.

A crisis is a terrible thing to waste.

Rick Salmon is an energetic entrepreneur who believes that this beautiful world that we have created needs our help. Subscribe to this blog to receive frequent updates and to join in the work. Learn more at www.ricksalmon.com

A Crisis is a Terrible Thing to Waste (Part 1)

My own company is in a crisis right now… a real crisis with tough decisions to make, sleepless nights to endure and an impending sense of doom that is like a nasty hangover. A bit of bad luck, bad timing, some strategic mistakes and a global financial crisis have all combined into a witch’s brew of a startup company cash-flow mess. The squeeze we have gotten ourselves into is not all that uncommon for most small business leaders and entrepreneurs. A friend said “just get used to it… the bigger your business, the higher the stakes and the smaller your odds of survival”. Thanks for the depressing thought.

Now before you all start to worry that I am about to throw in the towel, shipwreck the business and go take a job flipping hamburgers at McDonalds, just relax for a moment. I am attacking this situation head-on because...

A Crisis is a Terrible Thing to Waste.

Throw away 1000 years of history

When I arrived in Trento, Italy on Thursday the first thing I noticed were the city walls. Since the medieval times they have kept out invaders from the north and conquerors from the south. When you are reminded of your ancient past each day, perhaps it makes it harder to understand that THE PAST IS NOT THE FUTURE.

I was a speaker at a venture event in Trento this week that was sponsored by the local government and businesses. This region is making a fantastic effort in their attempt to break from the traditional thinking of old Italy and Europe and to foster innovation, creativity and entrepreneurship. While perhaps this may sound novel, the reality of changing peoples’ beliefs and even values is daunting. In almost every single meeting I had with entrepreneurs it only took about 3 to 4 minutes before they started by telling me how difficult it is to succeed with a startup in Italy. It was almost as if they felt it was their task to convince me that this was impossible!

Entrepreneurs are Losers

A few weeks ago I was standing in line at the store behind two boys. They were probably 13, maybe 14 years old and these guys were really cool. They wore low-rider pants that constantly tried to slide down to their knees, big T-shirts advertising their favorite vampire heavy metal bands. One had a skateboard under his arm while the other had a ski hat tugged down over his ears in spite of the warm day. I overheard them talking about a friend of theirs who had recently quit the skateboarding scene and moved on to something else (I think they said he quit skateboards and started chasing girls…). As they talked about him, they both stopped, looked at each other and simultaneously lifted their right hands to their foreheads. Placing their thumbs against their foreheads and extending their index finger straight up, they had both created the big “L” sign. This stands for “Loser”. Having both agreed on this point and signaled what they thought about it, they smiled to each other and went on to talk about something else.

Are Entrepreneurs Losers? Today I will be speaking at a venture event in Trento, Italy. There will be 20-30 startup entrepreneurs who will pitch their business plans to investors in the hopes of getting capital for their young businesses. To be really honest, most of them will not leave this event with any promise of funding. Many will be frustrated and go home and wonder if it would be better to go back to the university or research environments they came from and live the easy life on student loans and government grants.

Only a fool would tell you that being an entrepreneur is easy. It takes a ridiculous amount of blood, sweat and tears in order to create a successful business when you start with nothing but a great idea. If first-time virgin entrepreneurs knew what they were getting into and how much hard work is required, then most would probably never even attempt a startup. This is not a career of choice for the weak of heart.

Entrepreneurs are Losers… but only if they quit. The only real failure for any entrepreneur happens when they abandon their idea and quit. “Success” for an entrepreneur is not any specific event or goal to be achieved. Success is the process of learning how to create businesses. Becoming a “successful entrepreneur” means that you know how to do this kind of work - you know how to start with a good idea and how to persevere with it until it becomes a real company with real value for it’s owners and customers. It means that you know how to do the dance and to make it rain on your cornfield.

Don’t be a loser. Learn rather than quit. Find a way to adapt or change your business until you eventually get what you are seeking. Successful entrepreneurs are winners.

For more about the Trento venture event and other funding opportunities for entrepreneurs, contact Europe Unlimited (www.e-unlimited.com).

For more information about how I work with startup groups to help them accelerate their startup business, contact me: rs(@)ricksalmon.com

Pitch your Baby

I have a friend who just had his first child. He’s over the moon about this baby and OK, all his friends are happy for him too, but he sends out constant emails with photos, short video clips, frequent little stories about first baby steps. There are facebook pages and even twitter messages from time to time. This is a great example of pitch and even the most experienced entrepreneur in the world could learn a thing or two from a new parent.

This is how you should pitch your startup company… just like it was your newborn baby child. Pitch your business with enthusiasm, pride, a strong sense of purpose and a belief that this baby will someday grow into something big and fantastic!

Pitching your startup to venture capital people is a blast and also a great way to accelerate your business development. I learned early-on that getting honest and direct feedback is essential in order to help me as an entrepreneur to face reality and to keep my startups on the right path. Honest feedback may not always be pleasant to hear, but it is always valuable – either to confirm or to correct your strategy.

Seek out opportunities to pitch your business to experienced businesspeople and especially to venture capitalists. There are lots of different venues for pitching. Check out the Europe-Unlimited venture events, which are free and open to all European startups. You will be amazed what you will learn.

Want my feedback on your business pitch? Contact me today. Maybe I can help.
rs(@)xelerator.com

Rick Salmon is an energetic entrepreneur who believes that this beautiful world that we have created needs our help. Learn more at www.ricksalmon.com

photo credit: Quinn Dombrowski

Street Smarts

European Entrepreneurs must Startup Global

European startup companies actually have a big advantage over US based startups and many don’t even know it. No, I am not talking about fat government subsidies or protected local markets. I am talking about “street smarts”.

When I was 13 I remember visiting New York City. Not just the Big Apple Manhattan, but I visited a neighborhood in a ghetto of the Bronx where not too many white people visit unless they come in police cars and carry guns. It was severe culture shock for me, a skinny white middle class boy from the suburbs. If you grow up in the Bronx you learn street smarts fast or you don’t survive.

European entrepreneurs and startups grow up in tiny local markets and are surrounded by different languages and cultures. They develop their own type of street smarts. I read an interesting interview on European Entrepreneurship today. Here is an excerpt:

TechCrunch Europe Blog: (http://uk.techcrunch.com)
Seedcamp Founder Saul Klein Talks European Entrepreneurship
by Mark Hendrickson, September 25, 2009

MH: What are some of the more unique traits of European entrepreneurs, especially when compared to entrepreneurs in the US or elsewhere? Do you find they are driven by different motivations or that they have different personality tendencies?

SK: I think that the best entrepreneurs, regardless of geography, have similar traits; they are very determined, single-minded, and not afraid of taking risks. And I think that’s true wherever they are. One of the things that European entrepreneurs might have different than US entrepreneurs is that they are typically more international in outlook, by virtual of the fact that most of their home markets are not big enough to sustain really big businesses. So you actually have to think internationally and globally from the get-go. Whereas in the US, you can build a huge business by just being successful in the US. I think with the web the way it is now, that’s potentially an advantage.

When I worked with USA based tech startups in the late 90’s, I remember how little they understood about internationalization. The rule then was that only after a company has passed 10 Million $ in sales should they consider foreign markets. Consider that less than 30% of the American public even own a passport.

If you are a European entrepreneur, then you have an advantage. Do you know how to capitalize on it?

Rick Salmon is an energetic entrepreneur who believes that this beautiful world that we have created needs our help. Learn more at www.ricksalmon.com

By the Bootstraps

My grandfather was an entrepreneur, just like me. Unfortunately he died of a heart attack at an early age. Big doses of stress and cigarettes were standard fare for entrepreneurs and shop owners in those days. Although I never met him I have envisioned that he would look at me with his ancient blue eyes, stare for a long, dramatic moment and then say “You´ll have to pull yourself up by your own bootstraps son”. I expect that this would be his advice for my life. Little did he know that I would also have that entrepreneur gene (or is it an illness?).

Learning how to ´bootstrap´ a startup company is an important lesson. In every startup I have done I have been successful in raising capital, but only after I had proven to the investors that I had the ability to make sales and generate revenues on my own. Pulling myself up by my bootstraps has always been a healthy and necessary process.

But there is another kind of bootstrapping that is even more important to us entrepreneurs. It is the ability to pull ourselves up by our own bootstraps when we are discouraged, tired, disappointed or disillusioned with our startup businesses. We all hit that stage. As entrepreneurs we all have those days when it just seems impossible to be able to hold out – to endure tight cash flow, limited resources, the nagging pressure of bills and the fear that we might not be able to keep our fragile little boats afloat in the storm. Those dark days are always a part of an entrepreneurs´life.

One of the key differences between the great entrepreneurs and the merely mediocre ones is the ability to rise to the occasion – to find a way to raise energy levels – to see the opportunity, even in the darkest hours.

Yesterday I had a dark and stormy entrepreneurial day - but I also found the way back to the blue skies and to high energy. How about you?

Rick Salmon is an energetic entrepreneur who believes that this beautiful world that we have created needs our help. Learn more at www.ricksalmon.com

The WHO is much more important than the WHAT

Too much to do all the time, but not getting the results you want? Struggling to reach your customers? Having a hard time getting your message across? Tired of cold calls and chasing leads?

“There is always just too much to do all the time. I don’t know how much longer I can keep this up!” complained a struggling young entrepreneur yesterday. In spite of the fact that he has a good business concept and a great new technology, he is going crazy and considering quitting. In spite of his superman efforts and 70 hour work weeks, his startup business is just not taking off and accelerating like it should.

As entrepreneurs we should all recognize this situation. “Too much to do” usually means that we are attempting to do too many different things, and this is most often a result of an “inability to focus”. Focusing for a startup company is most often a matter of deciding “WHO” you are going to market to and not just “WHAT” you are trying to sell.

Determining the WHO you market to is actually much more important than WHAT you sell. You can have a great product, excellent sales arguments and yet you will still fail to sell if you are chasing all the wrong people. If, however, you truly understand WHO you are marketing to, then you will experience faster success and you will end up with less to do. If you understand exactly who your best customers are, what kind of problems they have, what keeps them up at night staring at the ceiling and what they are most worried about in their own businesses, then it will be easy for you to effectively create, adapt and sell your products or services to them.

The often fatal mistake that many startup entrepreneurs make is to attempt to market to a broad group rather than a tightly focused group. In the case of the entrepreneur I talked with yesterday, he is attempting to break-into a rather large market. A big investor would love this, because the market is huge and the potential earnings are impressive, but the costs and the level of sophistication required to even get noticed in this market is substantial and overwhelming for a startup company.

We explored a different strategy… We looked at how he could attack a smaller market with a much more focused message and offering, then use the rapid success in this smaller market to prove his overall business model, thus driving a powerful wedge into the larger market. For a startup company to succeed in a large market, it requires a different strategy than that which a larger and better-funded company would use. Prove that your basic business model works in a smaller market and it will be easier to get investors to fund your scale-up to larger markets.

Carefully choosing the WHO makes it easy to succeed with the WHAT. Narrow down the WHO to a small, manageable, easy to identify group of customers and you will use less time, money and headache in closing sales. Marketing is not difficult, but it does require focus.

Do you want to figure out how to work less, yet get bigger results? We can help you to develop a better strategy for your business. Contact us and ask how we can do this.

Attention European Entrepreneurs who are seeking investors and funding in 2009! We can put you in the spotlight in front of the very best European investors and venture capital companies. Europe-Unlimited (www.e-unlimited.com) and Xelerator have created a unique, new program to put entrepreneurs on a fast-track to funding. Get your funding in 2009 by contacting us today to learn more. See www.xelerator.com/fast-track

Heart and Soul

I read lots of business plans and I meet with many different companies each week. Not all impress me.

I meet lots of talented engineers who struggle with marketing and I meet plenty of brilliant marketing people who push lousy products. Sometimes I get bored because I want it all. I want brains and beauty, strength and gentleness, speed and agility, vision and attention to detail, heart and soul.

I want to meet highly competitive companies that deliver great products, and insist on excellence – and yet I also want to meet companies that live by their deepest values and put back more into this world than they take out.

I met such a company 2 weeks ago. Asker Produkt is a small business in Asker, Norway where all the work and production is done by employees who are either physically or emotionally handicapped. The company goes to extreme lengths to create work assignments and processes that compensate for the individual handicaps of each worker. Even though this is expensive and time-consuming, the result is that they have the happiest, most devoted group of employees I have ever seen. Anywhere.

But the best part was that their attitude towards the quality of their products is totally inflexible and unyielding. Their philosophy is that the quality of their products can never be compromised and must be the absolute best possible in order to maintain high standards of excellence and the ongoing loyalty of their customers. You cannot push social responsibility if you are selling junk. No matter how hard, you have to do both. Quality and conscience. Only then will your customers fully stay loyal to your products as well as to your ideals.

This is the combination that so many companies lack. Excellence

but also social responsibility. It’s rare, but something that business sorely needs. Heart and Soul.

- RICK SALMON (June 8, 2009)

The inner game of a successful entrepreneur

Being a successful entrepreneur is an inner game. It's all about how you manage your mind and your internal beliefs. In Timothy Gallwey's famous book The Inner Game of Tennis, he pointed out that tennis players are often totally obsessed with external things (the new tennis racket, the tennis shoes, the competition, the weather, etc.). They tend to lose site of the most important factor to being a great tennis player - the inner game - the mental attitudes and internal focus that are necessary to succeed.

Being a successful entrepreneur is no different. It's the inner game that is the greatest challenge, not the external factors that are continually changing. Success for your startup is not really about the economy, or your competition or about the next technology platform. It's about you.

Last week I led a workshop in Prague for a group of 48 experienced entrepreneurs. I asked them a simple question -

"What are the most important traits that a successful entrepreneur must have?"

Here is their list:

1. Passion & Enthusiasm in what you do
2. The Belief that you will succeed
3. The ability to keep a clear Vision of a successful future
4. Determination and Persistance
5. The ability to Motivate yourself and others
6. Salesmanship & the ability to be Persuasive
7. Effective communication and good Negotiation skills
8. The ability to be a Leader
9. The ability to Listen
10. Keeping focus on the Customer
11. Hiring the right people (and knowing how to identify them)
12. The ability to manage scarce resources effectively
13. A supportive family and balanced lifestyle
    
14. Focus and the ability to Deliver (making a good idea work)

So take 2 minutes and examine your own situation as an entrepreneur. Which of the items in the list accurately describe you? Look at the list and honestly appraise yourself. Are there one or two areas that you need to strengthen in your own character? What would the effect on your startup business be if you did this? Just ponder this for a moment...

What if you were a tennis player and you discovered you needed help with a certain aspect of your game, for example, your backhand. Wouldn't your personal coach setup a training plan designed to strengthen your backhand? If you discover areas of your inner entrepreneur game that need strengthening, don't just think about it. Take action. One action might be to hire a personal coach. Hire the best one you can find and then make massive progress in this area. You will be surprised with the results.

Let the old trees die

While the global finance crisis might be showing some signs of improvement, the outlook for the entrepreneur is still bleak. Without easy access to capital, entrepreneurs cannot grow. A forest without new growth will age quickly just like an economy without new growth will fall. While governments around the world are busy propping up old businesses in order to save jobs, they might just be missing an important point. Old forests are supposed to die in order to make way for the new.

This weekend I read about Joseph Schumpeter, a Czech economist who was a professor at Harvard for over 30 years. His theory was that there is a process he called Creative Destruction, in which after a long period of growth, a crisis must arise. Each crisis creates its own new dynamics and as a result, new technologies will emerge or be used in a new manner. As a result of this, entrepreneur activities will increase, new companies will start and some of the old companies will die off. The old professor believed that this is a natural cleaning process, especially after long periods of sustained growth, and it is necessary because it creates a capacity for new growth.

Early-stage entrepreneurs must have access to capital in order to survive. During the internet boom of the early 1990's we learned that giving huge amounts of money to young and inexperienced entrepreneurs is like inviting the local Hell's Angels group to your house for an all-you-can-drink free beer bash. They will probably drink you dry and trash your house in the process. Even if in small amounts, early-stage entrepreneurs must have access to capital in order to keep their dreams alive and to meet simple milestones for solid growth.

For the representatives from local government who are reading this article, please keep the programs alive that give small loans and grants to early-stage entrepreneurs. Make it easier for them. You can also encourage companies that assist startups by offering them tax breaks and incentives. Make certain your local new growth economy is getting help so that it does not wither and die. When your big old trees come crashing to the ground, it is only the new growth that will sustain you.

For the entrepreneurs who are reading this article, don't give up. This crisis will also pass. They all do. Whether it takes 6 months or 2 years, if you keep your dream alive, you will be positioned for rapid growth when the smoke clears. Get help from companies that promote meetings between local governments, entrepreneurs and venture capital. Keep the faith. Help is on the way.