Daring to take the first step

We live in an amazing world with so many talented and creative people. Every once in a while I see something that is so different and novel that it makes me stop and marvel. I just watched a YouTube video that had this effect on me. I found it mesmerizing. It takes six minutes to view, but read the intro first to understand the story.

This video shows the winner of "Ukraine 's Got Talent", Kseniya Simonova, age 24, drawing a series of pictures on an illuminated sand table. The story shows how ordinary people were affected by the German invasion during World War II. Her talent, which admittedly is a strange one, is mesmeric to watch.

The images, projected onto a large screen, moved many in the audience to tears and she won the top prize of about $130,000.

• She begins by creating a scene showing a couple sitting holding hands on a bench under a starry sky, but then warplanes appear and the happy scene is obliterated.

• It is replaced by a woman's face crying, but then a baby arrives and the woman smiles again. Once again war returns and Miss Simonova throws the sand into chaos from which a young woman's face appears.

• She quickly becomes an old widow, her face wrinkled and sad, before the image turns into a monument to the Unknown Soldier.

• This outdoor scene becomes framed by a window as if the viewer is looking out on the monument from within a house.

• In the final scene, a mother and child appear inside and a man standing outside, with his hands pressed against the glass, saying goodbye.

• The Great Patriotic War, as it is called in Ukraine , resulted in one in four of the population being killed with eight to 11 million deaths out of a population of 42 million.

Artist Kseniya Simonova says:

"I find it difficult to create art using paper and pencils or paintbrushes, but using sand and fingers is easier for me. The art…even brings some audience members to tears, and there's surely no bigger compliment."

Please take time out to see this amazing piece of art.



So what does creating sand art have to do with Entrepreneurship? Everything. Creating a painting or creating a business requires that you start with a vision, with a desire to do something, and with the courage to take action. The vision is not always 100% clear when you start, but by taking action – by taking the first step down a new path - you will open doors and discover new opportunities that you never dreamed were possible. My challenge to every artist and entrepreneur is to dare to take that first step.

- RICK

The Entrepreneur Mad Hatter

Today I feel like Johnny Depp in the movie Alice in Wonderland, who plays the role of the Mad Hatter. An entrepreneur in an early-stage startup company has a lot of different hats to wear, and this can be enough to drive you stark-raving mad.

In order to keep my business afloat I need to be skilled with a number of different tasks such as: Marketing (including web, CMS, branding, advertising, social media, desktop publishing, copywriting…), Sales (including distribution models, negotiation, networking…), General administration, HR & personnel issues, Engineering, Legal issues, IP & patents, Government reporting & compliance, etc. The list is endless and each area requires some time and energy. How do you keep from going crazy?

In coaching entrepreneurs I often use a tool called a balance wheel. You start by identifying your most important areas of focus – whether it be with your business or with your life. For example, in my life I might pick the following 6 areas: health, wealth, family & friends, career, and charity. I then give each area a rating from 1 (lowest) to 10 (highest). I then plot out a wheel with each of the values. Here is the wheel for my current business:

What does this wheel tell me? Nothing that I did not already know, but as with any graph or chart, it illustrates the imbalances between the areas. It reminds me that I need to devote more time to the development of technology, a team and administrative routines. This tool gets really useful when you track changes over time. When I return to this same exercise 3 months from now, it will be interesting to see how I have changed my perceptions and what sort of results I have achieved. This will make for a valuable discussion with my own personal coach.

To avoid becoming a Mad Hatter, I need to keep my focus on balancing all the different aspects of my job. If I am very successful in one area, yet I make a total mess of others, then it will cause me big problems. I need to achieve a good balance and create a wheel that is well-rounded and can be driven at high speeds without bumping or falling apart.

Would you like to try a free coaching session? Contact me today to set it up. Not only is it a lot of fun, but it may help you achieve that balance and avoid becoming an entrepreneur Mad Hatter.

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.

What every entrepreneur should learn from Abraham Lincoln

Starting a business is tough. No one will refute that fact. USA Statistics back this up to tell that approx. 90% of all startups will fail within the first 5 years.

What is the key entrepreneurial trait that differentiates the other 10 percent?

No, it is not that these entrepreneurs are smarter, have better technology, have whiter teeth or have rich sugar daddies. There is a key personality trait that keeps them trying until they eventually succeed. They are simply stubborn.

Success for an entrepreneur is about keeping your vision intact while constantly working to solve the complex problems and the numerous challenges that arise with any startup. Winston Churchill was once quoted as having said “Success consists of going from failure to failure without loss of enthusiasm.” The key is that successful entrepreneurs keep going.

Here is a brief summary of the life of Abraham Lincoln:

• 1809: Born to a poor family on rural Kentucky farm
• 1816: Family bankrupt and forced to move from farm
• 1817: 7-year-old Abe had to work to support family
• 1818: His mother died
• 1831: His first business fails. BANKRUPT
• 1832: Ran for the State Legislature - DEFEATED
• 1832: …Also lost his job - FIRED
• 1832: Applied to law school. DENIED
• 1833: Borrowed money from a friend to start a business
• 1834: Bankrupted again. Spent next 17 years paying off this debt
• 1834: Ran for the State Legislature - WON!
• 1835: Engaged to be married, but she died and broke his heart
• 1836: Total nervous breakdown and bedridden for 6 months
• 1840: Ran for Speaker of State Legislature - DEFEATED
• 1843: Ran for USA Congress - DEFEATED
• 1846: Ran for USA Congress again - WON! Went to Washington
• 1848: Ran for USA Congress again - DEFEATED
• 1849: Applied for job of Land Officer in home state - REJECTED
• 1854: Ran for USA Senate - DEFEATED
• 1856: Sought the Vice President nomination- DEFEATED
• 1858: Ran for USA Senate again - DEFEATED
• 1860: Ran for President of USA – WON!
He went on to become one of the most respected presidents of all time.

Abraham Lincoln was one of those people who refused to quit.
We entrepreneurs have a lot to learn from history and from other wonderfully stubborn 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/blog to receive frequent updates and tips.

Earning vs. Learning

On this first day of a new decade I was going through some old papers and I saw the original shareholder documents from a company I co-founded 20 years ago. I gave 6 years of my life to that startup and yet the value of my shares today would barely pay for a dinner on the town. Was it worth it? Wouldn’t it have been better to have had a normal 9-5 job, stable income and a regular contribution to a retirement fund?

Answer: Absolutely not! The reason is that the experience from the startup company taught me so much. It was an experience that opened my eyes to the fact that it is possible for an entrepreneur to create immense value and to have a lifestyle of freedom and independence. This was the startup that changed my beliefs forever and therefore put my life on a completely different and exciting path. Today the company is a successful market leader and even though my stocks got diluted in the process, I do have the satisfaction of knowing that I was part of something really special... and I learned alot in the process.

What are you going to do during the next decade? What will you attempt to accomplish? Remember that the most valuable thing is the learning, not just the earning.

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.

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?

_______________________________________________________

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.