Graeme Thickins on Tech

Reflections & analysis about innovation, technology, startups, investing, healthcare, and more .... with a focus on Minnesota, Land of 10,000 Lakes. Blogging continuously since 2005.

Category: Entrepreneurship (Page 2 of 59)

Start a Business During a Recession? Yes, Take the Plunge!

March 22, 2020 / / 0 Comments
photo of diving board

Photo: Markus Spiske, Unsplash.

Are we in a recession? Who knows? The definitions can be arcane. But we are in a massive government-initiated reaction to a public health crisis — that we do know. The talking-head economists will argue the meaning of the “R” word and when one actually begins (or ends). Blah, blah, blah — who cares? Some are calling what we’re in now just a “hibernation.”

The point I want to make is that, regardless of what we call a downturn in the economy, it can actually be the very best of times to start a business. I know something about this topic. I started my business during a recession — a year in which U.S. unemployment jumped faster than at any other time (well, until 2008-09). Did that scare me? Hell no! Because I knew I had something — customers weren’t getting what they needed from the established incumbents. And I survived three other recessions because I adjusted and simplified — reinvented myself and my business to meet the new realities.

So, buck up, people! Think of a recession as a challenge. The opening of a new door.

Why can starting a business during a recession be the right time? I’m hardly the only one who knows these truths. I loved how Australian startup founder Alec Lynch framed it when he wrote in Forbes after the last major recession (the 2008 financial meltdown), “10 Reasons The Best Time To Start A Business Is During A Downturn.” Here’s his list:

• People want innovation

• People want to save money

• Incumbents are vulnerable

• Good people are looking for work

• Things are cheaper

• Lower interest rates means cheaper credit

• You will have fewer competitors

• Smart investors want to invest

• Downturns give startups negotiating power

• You’ll build a lean startup with good habits

Some further perspectives on reasons why now is the best time to launch a business come from a guy named Brad Sugars, who penned a great piece in Entrepreneur magazine post-2008 recession, “Top 10 Reasons to Start a Business in a Recession.” One excerpt: “Just go back and look at the economic slowdowns throughout history. Most recessions in the post-World War II era last an average of 10 months, followed by growth cycles that last an average of 50 months. What this means for the startup is there’s no better time than right now to get going and start pursuing your business dreams — in anticipation of the next period of growth.”

You won’t find his list much different than Alec’s, but he does offer up one other key point: “You can get good PR by showing you are going against the trend. The media loves aberrations, and if you are optimistic by expanding or getting into business now, you would be in that category. That means you can generate some great PR by demonstrating your ‘alternative’ view of the market.”

And you have to love how he wraps up his piece: “There’s no better time to start than the present, especially if people around you are more comfortable with their own list of reasons why they shouldn’t start pursuing their own business dreams right now. It only means you’ll be facing a lot less competition.” Bingo!

Edward D. Hess, a business professor at the University of Virginia, coauthored a book called, “So, You Want to Start a Business? 8 Steps to Take Before Making the Leap.” Among his key points is having a clear understanding of your value proposition. “You need to decide why someone is going to buy what you have to sell. You must have a message (my emphasis) to customers about why you’ll be better, faster, or cheaper than the competition.” And to develop that, you need to talk to them directly and get to intimately know their needs.

Yes, it all comes down to this: will people pay you money for what you’re offering, and why? And remember, there’s a big difference between a business idea and a profitable business idea. The good news is there are tons of resources out there to help you start and run a new business. Read, think, plan, talk (a lot)… and build confidence.

Then dive in!

—————-

UPDATE 6/9/20: I told you to start your business 🙂 … It’s not too late!

“U.S. had shortest recession in history: Economist Mark Zandi” | Fox Business Video

 

Former MN Serial Entrepreneur Lief Larson Has Yet Another New Venture

December 16, 2016 / / 1 Comment

Many of my readers remember Lief Larson. He was known and respected widely in the startup community here in our state as a longtime entrepreneur. He had a successful exit with an interactive kiosk company before going whole hog into a software startup. A few years ago, he moved to Seattle after handing over the CEO reins at that VC-backed software company, Workface Inc. I miss him, and I’m sure others do, too. Not only was he a ball of energy, a smart developer and product guy, and a helluva salesman, but a really fun guy, too. He began life in Seattle living on a boat with his wife in the trendy Fremont section. And he’s definitely loving life out there in the Pacific Northwest.

But his entrepreneurial endeavors hardly stopped. Soon, he’d launched Engage.co, and not long after a sideline called Sportzy, a leisure sports and activity site. Always one to spot a new opportunity, Lief recently told me he and a colleague launched a new site called Planning to Retire.

“My buddy and I both have parents entering retirement and they keep asking us all these questions, so we decided to build a site to help them,” said Lief.  “We’re trying to capture 1,000 members in 30 days.”  So, friends, tell all your parents and relatives who are approaching that magical age about this great new site. It’s a really helpful resource for them!

Gettin’ old? Sign up now!

My Background With Lief

A little history: I was lucky enough to do some consulting work for Lief back in his Workface days — including traveling with him twice to big events in California. I really enjoyed the experience and found myself writing about him several times on this blog. Those posts go back more than five years, covering his journey with Workface (which he founded in 2006), his ties to Marissa Mayer (they grew up together in Wisconsin), and how he took on an educational effort for entrepreneurs all by himself here in Minneapolis called “SaaS Camp,” which I attended. Here are all those posts.

In one of them, I told the following story, which still makes me laugh today every time I think of it. Not only is Lief an amazing, hard-working entrepreneur, but the man knows how to have some fun!

Lief and I traveled to Palo Alto a couple years ago for a conference where Lief was pitching to the Silicon Valley VC community, along with a bunch of other hot startups, and sharing the stage with speakers like the founders of Salesforce and SuccessFactors. We stayed in a funky old, ’60s-vintage Travelodge motel — about as low-priced as we could find in Palo Alto. After we checked in to our respective rooms, we both went online to work. First thing I see is an email from Lief with a photo attached of this gorgeous, expansive hotel room, saying, “Wow, I hope your room is as nice as mine.” I never laughed so hard, because I could hardly turn around in my dinky little room, and I knew he couldn’t either… :-).

I haven’t had an opportunity to get out to Seattle since Lief moved there, but you can bet I’ll be meeting up with him the next time I do. Go, Lief!

My Latest Post on LinkedIn Is About ‘Bootstrapping’

September 12, 2016 / / 0 Comments

(Note: I posted the following on my LinkedIn page earlier today and decided to repeat it here. It was entitled, “Bootstrapping: Why Do Entrepreneurs Do It, and How?”)

Photo: @LLBean

Photo: @LLBean

The word “bootstrapping” actually has several meanings according to Wikipedia. But in a business context, it means “to start a business without external help (capital).” You can read more about that specific meaning, also called “bootstrap funding,” here on Wikipedia — lots of helpful information there. Okay, now that I’m sure you know what it means…

What got me thinking about bootstrapping recently was tripping on an old blog post of mine, which is still very timely in our current startup climate. It was called “Raising Startup Money? Here’s 20 Ways.” Note the “Big List” included in that post, called “20 Way$$ to Feed Your Startup Habit.” A large number of those 20 ways fit into the spirit of bootstrapping. Yes, the money you save as a bootstrapping entrepreneur is as good as any other money — maybe better.

Before I wrote that piece above, I got inspired about bootstrapping by a blog post written by a guy named Jeff Cornwall. He heads the entrepreneurial studies program at Belmont University (and used to teach here in the Twin Cities at the University of St. Thomas). That blog post was entitled “Why Do We Bootstrap?” The interesting thing Dr. Cornwall said he’d found in his work was that entrepreneurs bootstrap for a wide variety of reasons, and only some of them relate to necessity. Some just do it because they like it, I guess — and to allow them to keep more ownership of their company, which is no small benefit. (Jeff’s web site is here, and he also runs a well-followed community site called The Entrepreneurial Mind.)

The other reason I find the topic of bootstrapping interesting is that I’ve practiced it myself and worked with many founders who’ve done the same over my 30+ year career working with tech startups. In addition, I think there’s especially a need here in the Midwest for founders to get more educated on this topic. Why? Because, try as we might, startup venture funding is never going to flow as freely here as it does in Silicon Valley, or Boston, or Austin, or you name it.

Entrepreneurs in these parts, and in so many areas of the country away from the major VC hubs, have to be one thing above all else: clever. And there’s a lot they can learn from people who study this phenomenon, and people who’ve practiced it for a long time. We have tons of those here in Minnesota (and all over, really) — serial entrepreneurs who’ve proved bootstrapping works. Many of these folks are friends of mine, and they’ve accumulated a large amount of knowledge on bootstrapping based on hard experience. The key, of course, if you’re a budding entrepreneur, is to learn how to tap into the expertise of those folks — find them and learn from them. (Think mentors.)

Let me also suggest a couple of great, short books on bootstrapping. Dr. Jeff Cornwall, mentioned above, published one in 2009 simply called Bootstrapping. Way before he published that book, he recommended one by Seth Godin, called the “Bootstrapper’s Bible.” It’s certainly not a new book, but no matter — it’s a timeless classic. (Here’s some background on it from Seth’s blog.

The price is right.

The price is right.

But, wait — here’s a big tip for you: don’t buy it. That’s right, save your money! Because you can download an ebook version of it that Seth published for free. He calls his ebook a “manifesto” and you can get it as as a PDF file right here.

How’s that for a bootstrapping move! Go grab it while you can, before Seth changes his mind. Then, read up, go forth, and continue bootstrapping your way to startup success. Ka-ching!

 

 

I’ll Be Live-Blogging the ‘Pioneer Summit’ Again Next Week

September 9, 2016 / / 0 Comments

pioneersummit-logodatesI’m heading out to the Bay Area in a few days to once again cover a great tech conference called the Pioneer Summit, put on by GSV Labs in Redwood City, CA. I loved reporting on it last year — as evidenced by my extensive liveblog. (They moved it up from October to September this year.)

I’m looking forward to the program, which is jam-packed. Is this enough speakers for you? Here’s one my data geek friends would like. And hearing what this Silicon Valley legend has to say will be pretty awesome as well.

What is GSV Labs, you ask? It’s “a campus of innovation” — I like that description! A very cool place indeed. It’s focused on accelerating high-growth, high-impact verticals in the areas of EdTech, Sustainability, Big Data, and Mobility. Utilizingpioneersummit-celebrate GSV Labs’ resources, founders and entrepreneurs join a global network of ecosystem partners, including corporations, international agencies, mentors, universities, investors, thought leaders, and non-profits. From its Silicon Valley campus, GSV Labs houses about 100 startups, provides acceleration programs, and hosts events.

My connection to GSV Labs is through my colleague Mark Moe (who lives here in the Twin Cities) — he’s VP of Global Business Development. Look forward to seeing you there, Mark, and I’m sure some other Minnesotans who’ll be in attendance, as there were last year.

I guess I’d better start getting my live-blogging fingers loosened up — which means not just providing commentary, but shooting a whole lot of iPhone pics to go along with it. This will be fun!

Raising Money You Don’t Need: MN Startup Trend?

September 23, 2015 / / 5 Comments

I Dont Want Your Money[UPDATE 9/28/15: At the bottom of this post, I include some great comments I got from a leading VC over the weekend.]

This thing about profitable startups raising money they don’t need is getting deafening around here. A few years ago, Code42 shocked us by taking their first VC money (a huge $52M round), which confused people because they knew they were doing fine without it. [UPDATE: days after I wrote this post, it announced an $85M Series B.] Then LeadPages raises a surprise A round in late 2013 that it soon was openly bragging it hadn’t touched — didn’t need it. Only months later, it takes yet more — another $27M. It’s growing crazy fast, so we wonder… do they not need that either?  How about SportNgin, raising something close to $40M over four rounds going back to 2011? With the continuous growth they’re experiencing, why do they need all that cash and can they even spend it?

Now we learn about another rapidly growing Minnesota startup, Field Nation, which began as a young college grad’s idea more than a decade ago and now claims a $100M gross revenue run-rate, grabbing a huge (for this town, FieldNation-logo-horizanyway) Series A round of $30M. Reading the recent news in the StarTribune and the MSP Business Journal, you had to be impressed. Another homegrown startup raises a huge initial round. Wow, yes, we say to ourselves, beaming with pride, the Minnesota startup community really is rockin’! But what’s going on here with this latest winner in the local VC stakes?  Continue reading

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