The Launch Path

Successful startup ventures need to articulate an actual problem they solve, not simply the absence of something. — One of the first things I have my Stanford entrepreneurship students do is to write a problem statement — a sentence that describes the problem their proposed startup venture intends to solve. What I’m looking for is something along the lines of “Busy parents want their kids to eat healthy…

When selling to other businesses, you want to climb as far up the value proposition hierarchy as you can. — I spent most of my career running enterprise software companies — we sold software products to other businesses. …

Sales and marketing (aka customer acquisition) is the most important function of at any company — if you don’t get customers, nothing else matters. — Sidebars: ➵ CAC < LTV ➵ The name and logo dilemma. ➵ Developing Customer Personas for your startup. Most startups die from a lack of customers. Period. Others die because they realize too late that the economics of their customer acquisition process don’t work.

It’s easy for startup entrepreneurs to get hung up on things that matter less, at the expense of the things that matter more. — Most entrepreneurs are passionate perfectionists who tend to have a lot of self-identity tied up in their new startup idea. So they really really really want to get their startup’s name and logo right. My advice is to not get too hung up on either, because the name and logo…

You know that talking to prospective customers for your startup is important. But you’re probably doing it wrong. — I once had a student tell me “I’ve done market testing for my startup and 90% of people say they will buy my product when it’s available!”. I was impressed, so I asked him about his methodology. He said he had emailed 10 friends about his startup idea and 9…

Some entrepreneurs have a tenuous relationship with truth-telling. Don’t be one of those. — My first full-time job, at the age of 21, was with a company in San Francisco. One day the Feds came marching into the accounting office and arrested the CFO. It turned out that he had been writing himself company checks for $50K to support his personal gambling habit. He…

If you’re gonna pitch a venture capitalist, it’s important to understand how their business works. — Some people think a venture capitalist is just a crazy rich guy who likes writing checks to entrepreneurs. It’s a little more complicated than that. Venture Capital firms are actually managing other people’s money, much like a mutual fund. The partners decide to raise a fund, they go out and…

So a Venture Capitalist has presented you with a term sheet. What does it all mean? — A term sheet is simply a non-binding document outlining the terms of a proposed investment. If accepted, it then becomes a guide for the lawyers who will draw-up the actual legal documents required to complete the financing. As with anything, all of these terms are negotiable. …