June 2012 – Page 2 – JUAN GREAT LEAP

5 Things They Don’t Tell You When You Make THE LEAP

June 7, 2012June 7, 2012Peter Cauton

I thought it was over, but we managed to overcome so much adversity. In the end, it was soooo much worth it!”

Of course, we keep on hearing this about those who’ve taken the great leap from corporate to entrepreneur, right? The insane difficulty and the inevitable phoenix-like rise to the top.

But what exactly makes it difficult? What are the exact changes felt?

I’d like to highlight some of the things I felt and observed when I made my own leap, almost exactly 3 years ago today:

1) I WAS DOUBTING PETER

From ten years of structured work with a boss, I suddenly now called ALL the shots. I went from doing final interviews and creating performance management systems as an HR Manager to suddenly deciding what to build, who to market to, how to handle finances, and how exactly to spend my time. There was nothing in corporate that could’ve prepared me for it.

I remember smiling and facing the STORM team to tell them I was going to be fulltime: about how excited I was and we’d get to do all sorts of things. While I was confident and optimistic, I was at the same time wracked with doubt.

What if I’m wrong?

In retrospect, having a team to lead also helped a lot: you’re forced to live up to the confidence you WANT to exude around them.

After some time, did end up getting used to it, largely because no matter what happens, you realize you don’t get fired.

Now, there is still doubt, with the difference being the knowledge that doubt really comes with the territory of doing new things. So the focus becomes – let’s do this fast, so if it doesn’t work, we learn and adjust fast as well.

2) THERE’S NO SUCH THING AS A SALARY

The whole point of a salary revolves around its consistency – every two weeks you get it, and what you get is exactly the same month after month.

If that’s what a salary is, then sorry, but you don’t get that.

I thought I gave myself a salary when I started fulltime for STORM, but it turns out, what I gave myself was an upper limit: I would usually get something lower, and what I would get would vary each time.

Why? Simply because startups struggle in their first years, if not altogether folding.

It was the time when I understood when A/R was really all about. Sometimes, clients just don’t pay on time – and it could be for inane reasons (like “the accountant is absent” or “the check is in the drawer and the person with the key is on VL”). Of course, they don’t really know (or care) that you’ve been banking on that check for everything.

Gosh, I hate receivables.

3) YOU NEED YOUR SPOUSE TO BE THERE FOR YOU

So in essence I told my wife, who just gave birth to our firstborn, that I was going to take an 85% pay cut to pursue my dream during the recession.

She had EVERY RIGHT to say something like:

“WTH?! Did you hit your head somewhere? Think about your son! Wait a bit first until the firm is more stable to give you higher pay”

And you know what? Thinking about it now, if she told me that, I probably would not have taken my leap when I did. And not doing so at that time would have killed STORM.

She continued to believe in me during the times relatives doubted my choice, or when there were more bad news, or when we had to tighten our belts.

My wife had faith in me.

And that made all the difference.

4) YOU WILL NEED TO FIRE FRIENDS

As a former HR leader, it was usual for me to fire people. That doesn’t mean it would be any easier in my own firms. In fact, it’s harder, because in a smaller team, I worked directly with everyone. They’re friends.

There will be hiring mistakes though. I think one big weakness we have had in STORM is that Pao and I have cream puffs for hearts, so we delay and delay.

Indecision like this can kill startups, because it isn’t built to carry deadweight like larger firms can. You just need to realize any delay isn’t doing anyone a favor and just do it.

5) IT’S TOUGH TO LEARN FROM MISTAKES

The cliché is true – mistakes will be where you will learn from the most. What they don’t say is how difficult this is to go through. In a lot of times, the lesson gets ingrained in you precisely because the bitter pill was tough to swallow.

In a startup, a mistake can make you miss a pay period. A bad hire can lead to extreme frustration. It can mean the loss of an important client. A series of mistakes can lead to further self-doubt and paralysis.

But this is something you have to learn to deal with and embrace, because it WILL happen. I do think these battle scars are precisely what makes an entrepreneur a true entrepreneur.

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Launching the Juan Great Leap Startup Lab!

June 6, 2012June 7, 2012Peter Cauton

Wheels are churning.

Over the last few years, I’ve built three successful firms with the help of some really amazing people:

1. STORM Consulting

2. Searchlight International

3. Stream Engine Studios

It was then that I realized something – what I really wanted to do was to help people build startups! And so over the last few months, I’ve tried to crank out a system which could help me: a) manage all the existing startups, b) build a value-multiplying ecosystem, and c) create even more startups with more people!

(It was an idea I initially called Bizkitchen, but the more I thought of it, the more I realized it made more sense to do it under the Juan Great Leap platform)

The system’s wheels are slowly churning: we are set to release around 2-3 more exciting startup concepts in 2012, with several more in deep incubation.

We plan to release 4-6 startup concepts every year from hereon.

How is this lab different from Startup Accelerators like Startup Weekend or programs like Smart’s Ideaspace or Globe’s Kickstart program?

Well, for starters, you can’t “join” this lab. It isn’t event-based. We create startups in a more grassroots manner. We seek ideas and people out, then if an idea captures our imagination – we try to quickly build a company from scratch: from picking the right founders, to testing the idea using lean startup methodologies, to releasing MVP’s, and ultimately launching. The approach is very organic.

Another very different mindset we have is the inclination towards the bootstrapped approach. One trend we see now is the immediate tendency for entrepreneurs to approach investors, usually sacrificing equity, control, and freedom.

Sometimes, funding is exactly what a business needs to start. Sometimes though, it just isn’t. You CAN bootstrap and be profitable (take a look at this). You can retain equity and control and love what you’re doing. It should always be the first option. At the very least, you can create traction, which in turn, creates a whole lot more bargaining power for you at the investor’s negotiation table.

So wait, if I have an idea for a startup, can this incubator help me?

Yep. And you don’t need to join any event, or do a pitch, or submit a business plan. All you need to do is to email me at pcauton@yahoo.com and request a coffetalk with me.

We can help you:

refine the idea

outline a plan of attack

set you up with co-founders (if you need)

manage your back-end functions: admin, HR, accounting, etc…

recruit your first, critical employees

set-up your first office within our premises or outside

share contacts and resources with ALL the member startups

source your funding

create a calendar of transition from part-time to fulltime in the startup

test your ideas using lean startup methodology

So what are you waiting for? Take one great leap!

: We’ll help you piece your unique startup puzzle together

How we are ALL in danger of doing the dodo – and what to do about it

June 5, 2012June 6, 2012Peter Cauton

Unfortunately for the species, the dodo remains synonymous for concepts or objects which have become obsolete due to failure to evolve.

When I graduated in 1997, the following industries were kings of the the roost. They are now dead or are shadows of their former selves – all in just 15 years.

Record Stores – remember shops like Odyssey and Music One?

Today, everything in this room can fit in the phone in my pocket

Newspapers – My dad used to get 3 newspapers for the house daily. And that Sunday Manila Bulletin edition was thicker than the Bible. Now? My dad goes online for his news. Manila Bulletin is now as thick as a comic book.

Video and Game Rentals – ACA Video anyone?

Landlines – I’m not really sure why we got a landline for our house. I think it was because of the bundled package with the internet. It NEVER rings anymore.

Point and Shoot Cameras (not SLR’s) – the lining was on the wall when the smartphone camera specs started getting better and better. Then the iPhone 4-S came out and was essentially the straw which broke the camel’s back.

Photo Developing Shops – These shops seemed to be in every other commercial block at one point. Now you hardly see one.

Encyclopedias – Remember Collier’s, World Book, and Britannica?

These are some of the industries which I think would be in quick decline from hereon:

The PC – Have you seen how cheap laptops now are? It’s also worth noting that the Macs, while still selling well, are now Apple’s lowest-selling machines next to phones and tablets.

Book Publishing – Did you know you can now self-publish in Amazon? (and according to a lot of authors, make MORE money)

Brick and Mortar Bookstores – I used to think, “There would always be a need for a book! It’s a different feeling to turn actual pages.” Then I got an iPad and was introduced to ebooks and Amazon online. From buying a book almost every month just 2 years ago, I haven’t bought a physical book ever since.

(What do you think is on the verge? Hit the comments!)

It’s not surprising that we see industries come and go. What is staggering to observe is the rate of human adoption – and therefore, disruption. How much time did it take for books to gain prominence? Hundreds of years. What about newspapers? Landlines? Record shops? Cameras? The PC? Decades.

Now? You can change the world (and make something obsolete) in months, or even weeks. Just visit the likes of techcrunch and mashable to find proof.

What does this mean?

No one’s job is safe.

Nowadays, it’s dangerous to become a one-trick pony. (Hello, cobol programmers) You have to be a lifelong learner.

Nowadays, you have to become an expert in becoming an expert. You have to do it fast, too.

Nowadays, you have to deal with the ambiguity that comes when technology disrupts markets every other week.

Flexibility, learning fast, and managing ambiguity?

Sounds awfully like what an entrepreneur does.

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10,000-Hours to Entrepreneurial Greatness

June 1, 2012June 1, 2012Peter Cauton

In his delightful book, Outliers, Malcolm Gladwell states that for someone to be “great” at something, he should have spent at least 10,000 hours honing and perfecting this skill.

The famous 10,000-Hour Rule

He cites The Beatles and Bill Gates as examples.

The Beatles performed live in Hamburg, Germany over 1,200 times from 1960 to 1964, amassing more than 10,000 hours of playing time, therefore meeting the 10,000-Hour Rule. They used all that time to hone and perfect their music. According to Beatles biographer Philip Norman, by the time they got back to England from Germany, “they sounded like no one else. It was the making of them.”

Gates met the 10,000-Hour Rule when he gained access to a high school computer in 1968 at the age of 13, and spent 10,000 hours programming on it.

In Outliers, Gladwell interviews Gates, who says that unique access to a computer at a time when they were not commonplace helped him succeed. Without that access, Gladwell states that Gates would still be “a highly intelligent, driven, charming person and a successful professional,” but that he might not be worth US$50 billion.

Gladwell explains that reaching the 10,000-Hour Rule, which he considers the key to success in any field, is simply a matter of practicing a specific task that can be accomplished with 20 hours of work a week for 10 years. He also notes that he himself took exactly 10 years to meet the 10,000-Hour Rule, during his brief tenure at The American Spectator and his more recent job at Washington Post.

Now, let’s apply this to entrepreneurship.

Think about the great entrepreneurs you know. What do people like Henry Sy and John Gokongwei have in common? They began honing their entrepreneurial skills very early on – as teenagers! Imagine the skills they built early on – negotiating, sales, financial savvy, handling pressure (they didn’t eat if they didn’t earn) – all essential entrepreneurial skills. They got to 10,000 real early, cumulatively applying what they learned onto their new ventures.

Steve Jobs started as a teenager. Richard Branson started his first business, a magazine called Student, when he was 16. Investor extraordinaire Warren Buffet did odd jobs and “buy and sell” as a child. Buffet bought his first shares at the age of 11. Jollibee’s Tony Tan Caktiong spent his teenage years helping with the family’s restaurant business in Davao he built the ice cream parlors that would later morph into Jollibee.

I could go on and on.

Gladwell makes a lot of sense. The more experience you gain as an entrepreneur, the better at it you become. I remember telling people that if there was one thing I regretted in my entrepreneurial career – it was that I could’ve started sooner. (I started at 30) I would’ve made my mistakes earlier. I would’ve applied my learnings faster.

I would be a much better entrepreneur now had I started earlier – I have absolutely no doubt about that.

Time on the job is essential. Sorry, but whatever time you spend in corporate does NOT apply.

Want to be a great entrepreneur one day?

How many hours you got?

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