Category: GETTING STARTED

Avoid the Joneses, They Will Anchor You to Mediocrity

Peter Cauton

joneses

Aside from my work in STORM and Juan Great Leap, I “incubate” firms.

It’s really just a passion of mine to look for the right ideas, find the right people to pursue them, and then try to build something from nothing. Sometimes it succeeds, sometimes it doesn’t.

So, if you can imagine, a big part of this hobby of mine is constant “founder-hunting.”

There are a great many challenges to “founder-hunting.” (I’ve covered quite a bit of this in this blog.)

Illustrated here is another fairly typical one:

Peter: “So…everything sounds good! This is the % equity you’ll be entitled to as Founding CEO. As for salary, obviously the startup can’t afford your current salary, but we can still squeeze out what I think is a substantial amount, ______.”

Founder: “Uhm…can the salary still be increased?”

Peter: “Dude, we went through the figures. You know this is the safest amount we can muster. Wait, what are you going to pay for? You didn’t get married and suddenly have kids last night, right?”

Founder: “Well, no, but I am paying for a car for the next two years.”

Peter: “Uh…don’t you live like 3 kilometers from your current office?”

Founder: “Yeah, but…doesn’t everyone get a car plan? It was a good deal.”

Peter: And you got a brand new one? (sighs defeatedly)

Founder: “Uh. Yes. I, uhm…also got a studio unit…”

Ah….The car-condo yuppie dream.

Most people I know who take advantage of these “good deals” CANNOT afford them – hence they do a loan. In effect, they give up a large amount of their monthly salary over the next 3-4 years not only to pay for the car, but also to pay for the huge interest expense (bank margin) generated in spreading the loan over 3-4 years.

(You know what, you could have used that money to bankroll a startup that could pay for 5 cars for you in the same amount of years)

People justify this expenditure with the very confident “I will increase my salary by this so and so amount every year, so this amount won’t look so big in a few years.”

Bad, bad move. (salary increases aren’t by any means guaranteed, emergency expenditures ALWAYS happen)

Even if you get buyer’s remorse, say, A DAY AFTER YOU RECEIVE THE CAR, you’re already done for. You will never ever make the same amount of money you just spent because a car’s value plummets disproportionately as a used vehicle.

Then the critical question comes in: okay, why a NEW car? Why a higher model? Why didn’t you stop with the car? Why get a home loan for a condo as well?

Eventually, if you keep asking why, the reasoning for a lot of people  (whether they admit it or not) becomes apparent: it’s to keep up with the Joneses.

New car makes you more popular. The new car is “appropriate for your level.” (that’s what I thought)

Stop.

The Joneses will anchor you. There is no need to keep up with them.

Retain your fiscal flexibility. Fiscal maturity and flexibility are so important to a young entrepreneur. Most  startups cannot survive with immediate high salaries (some cannot with ANY salary), necessitated by unnecessary financial anchors.  Don’t ever destroy your long term dreams by chasing shiny, short-term objects.

Ignore the Joneses.

Why TURBO is (surprisingly) the most entrepreneurial movie you’ll see in years

Why TURBO is (surprisingly) the most entrepreneurial movie you’ll see in years

Peter Cauton
The most entrepreneurial animated film you’ll ever see!

I watched TURBO last night with my family. The wifey liked it. The kids LOVED it. 

Unbeknownst to them, I was loving it a little more than I probably should. Why?

Turbo is easily the greatest entrepreneurial animated movie I have ever seen!!! 

(now that’s a sentence I’d never, ever thought about writing in this blog)

At the risk of spoiling the movie by detailing how exactly it achieved this, let me just enumerate several entrepreneurial themes that I managed to observe in the movie.

There were SO many. 

To wit (when you do watch the movie, do see if you can tick some of these off – most are pretty obvious):

A “crazy” one dreaming of a big thing

The desire to leave the corporate assembly line

Unsupportive family/friends

Failing many times before succeeding

Raising money

Pitching to investors

How traction makes raising money easier

Virality and how mobile enables it

The value of PR

The value of key partners and alliances

Being the underdog

Racing with the big boys

Leveraging on agility when racing with the big boys

Not giving up

How “good enough” isn’t good enough

The rewards of entrepreneurship

The movie was fun and enjoyable enough by itself. Viewed through entrepreneurial lens, it becomes something much more.

See it soon and tell me what you think!

The Absolutely Crucial Art of Defending Your Dream Time

The Absolutely Crucial Art of Defending Your Dream Time

Peter Cauton

defending

Do you want to know what’s truly important to you?

There’s really no need for further philosophical / existential analysis.

Here’s a surefire way to know.

Take a look at your calendar for the past month. Take a look at the number of hours you spend on certain tasks.

Where you spend your time will show you an objective view as to what you truly find important.

Do you spend countless hours working overtime? How much time do you spend with your family? Do you spend a lot of time pampering yourself? Video games? TV?

Your calendar says a whole lot about you. 

calendar

In our community, we are encouraged to “defend our prayer time.” That we should spend 15-30 minutes, at a specific time of the day, praying and being with God. We know this will be challenged by the temptation to sleep, watch TV, work, or a hundred other things, which is why we have to vigorously defend the time. Because God is important.

I can’t help but think this also applies to following our career dreams as well. We need to designate a certain time of day. Even just 15-30 minutes a day(for those of us will fulltime jobs which we already know don’t and won’t fulfill us). Because our dreams are important.

I recently talked to someone asking me for advice on how to do a startup part-time. He had an interesting B2B idea which I thought had some potential. I told him it IS possible to start things part-time, but that he would have to work hard and render disciplined, daily effort. I told him we can talk from time to time so I can check up on him. He kept on saying the right things – I want to follow my dreams, I want to pursue what I love, I will do what it takes.

But then when it was time to share with me what research he should’ve garnered, or which potential partners he’s now talked to, he chokes. He says he just too busy.

I would have believed it too, had he avoided adding me in FB, where his reactions to Game of Thrones and the NBA playoffs pop up in my feed.

An NBA game is around 2 1/2 hours. Initial internet research on possible competition can take a mere 30 minutes of smart Googling. Coffee with a potential partner usually takes an hour.

In the time he took to watch ONE basketball game, he could have interviewed two candidates and made the research.

NBA > Dreams.

It sounds funny and simplistic, but if we take a look at our calendars, I’m sure we would also see dozens of “misalignments” between what we SAY are important to us and where we ACTUALLY spend our time.

If your family is important to you, did you sacrifice time from other stuff to be with them?

If your dreams are important to you, how much time a day do you spend working on it?

Just a mere 30 minutes a day of deliberate work on your dream can yield tremendous results.

When I was starting STORM out in 2005, I had a fulltime job and I was pursuing a master’s degree. I had really wanted to do a “business” though, (the term “startup” wasn’t quite popular yet) so I really resolved to find some time. I still remember spending a few minutes every weekday researching on flexible benefit competition, polishing my powerpoint deck, and “profiling” potential partners (I remember having a list of people with their strengths and backgrounds). Sunday mornings (otherwise known as corporate veg-out time) would be sacrificed for morning coffee with potential co-founders. I would drive out to the Starbucks nearest to the homes of my potential partners.

After months of doing this, I finally found partners who were willing to take the leap with me. Then, the project started taking a life on its own. There was momentum (so crucial). Excited, I started finding more and more time to work on my dream. Weekend coffee transformed into weekend planning with my partners. Soon, we would be putting up our share of the money, get SEC-registered, and start. By no means was it smooth sailing after, but I never looked back. Three years after, I took my fated full-time leap.

Is your dream worth sacrificing for and pursuing?

If it is, then take your calendar and start making changes.

Put your time where your mouth is.

(do you know anyone who would especially resonate with this post? be a blessing and share! Sometimes we need to encourage people to take leaps! – Peter)

5 Must-ask Questions for Your Co-Founder Interviews

5 Must-ask Questions for Your Co-Founder Interviews

Peter Cauton

partnersIf you’ve been reading this blog for awhile now, you already know how much emphasis I put at the process of finding the right partner. Actually, wrong partner selection is THE single reason I’ve failed in multiple previous  startups. Do NOT take this delicate process haphazardly.

To help you with this process, I’d like to share some practical questions you can ask a potential partner during an interview. This is by no means a comprehensive list – these are just a random, practical list of questions I’ve found to be pretty helpful over the years.

Image converted using ifftoany

1) What are your own dreams for this startup?

You want a partner, not an employee. You want someone who will share your startup dream and very importantly, make it something bigger. Your potential partner HAS to have his own take on how to further build on your idea or vision.

Red flag answers:

“Well, uhm, I haven’t really thought of that.”

“It’s your vision, not mine.”

kryptonite

2) I really suck at _______, _________, and _________. What are YOUR weaknesses?

Weaknesses questions are very, very tricky in interviews. People know the question is coming and yet are are still befuddled by it. Moreover, you typically get people who won’t divulge real weaknesses and instead give you duh answers like:

“I work too hard”

or

“I’m a perfectionist.”

or

“I used to be bad with detail, but now it’s no longer a weakness.” (this means its a HUGE weakness!!)

In the co-founder search, the weakness/strength discussion is just so crucial. The whole point of getting a partner or two is to find people who will complement you and account for your weaknesses  (and vice versa).

So you HAVE to have an honest, open conversation about strengths and weaknesses.

The first part of the question, “My weaknesses are…” is designed to make the interviewee more comfortable in divulging her own weaknesses by first divulging your own. Share these truthfully. If you are genuine, your interviewee WILL, more often than not, reciprocate.

Red flag answers:

“I work too hard.”

“I have worked so hard in correcting my weaknesses that now I have none.” (yep, I have gotten this multiple times)

Carrot-on-stick

3) How do you like to get rewarded? 

I like this question precisely because it is a very general question and can lead the conversation where the interviewee chooses. You can then see patterns as far as motivation is concerned. Knowing what will motivate a partner is crucial in ensuring your partner/s stays with you.

For extrinsic rewards, be sensitive to answers which pertain to the timing of when the interviewee would want to get rewarded.

You want people who will believe in your idea and will work for FUTURE monetary rewards. You want to be talking more about equity, success-based rewards, and future plans, instead of negotiating current salary.

Which reminds me of another very strategic question to ask:

pesos

4) What are your current financial obligations?

This is an AWESOME question.

I’ve found that a person’s current financial situation is a HUGE determinant as to whether he would take a leap with you or not. Not only will you get a good picture of this, but this is also a VERY GOOD WAY of determining what the person’s minimum salary can be.

(If the person says “I’m paying around P3000 a month for the phone bill and around P4000 for gas. that’s it.” and then he says later on, “I would require a fulltime salary of P40,000,” then you have a red flag.)

I just am realizing this right now as I type this – I hope I won’t regret posting these when I do future founder interviews…

audition

5) Can you design/program/sell/  ________ for me right now? 

These are the three classic roles for the ideal founding team: a design expert, a programmer (or more generally, your MAKER/PRODUCER), and your pitchman.

How do you know if they can do the role well? Make them exhibit it. Make them audition.

Make the pitcher give you a 5-minute pitch. Ask the programmer to code. Make the designer draw something. Don’t  rely on a portfolio (you’re not sure if they really did it). Rely on what they could produce right there and then. This will take time yes, but believe me, its worth it.

Red flag answers:

“Really? Now?”

Other quick suggestions: 

– NEVER partner from just one interview. Do AT LEAST 3. Ask many references. And then work on a small project together before shelling out any equity. This is not an employee. This is a marriage. Be thorough.

– If its been a long time already and you haven’t found a partner yet? (I know some people who are now at year 3 of the search). Just start and incorporate. The work you will do (assumption: you do good work) WILL attract potential partners. Who knows, you might not even need one.

How you can use FEAR as a REVERSE Spider Sense

How you can use FEAR as a REVERSE Spider Sense

Peter Cauton

tarantula

Fear has been my constant companion all throughout my startup career.

I remember feeling I might be laughed at as I was about to present my idea to potential partners or investors.

I remember that crippling feeling. That extreme doubt I felt when I was about to resign from my fulltime job.

I remember hearing all the “no’s” in this journey, the disheartening voices and fearing they actually might be right.

I remember delaying the first-ever post of Juan Great Leap (JGL) for weeks for fear other people might judge me.

After developing several startups (both successes and utter failures), and the unexpected growth of the JGL audience, you’d think I finally would be free from fear’s clutches.

It’s still there.

I’m still scared things might not work. I’m scared people will laugh. I’m afraid of what other people might think. I’m afraid a new startup idea might flop.

The difference now is, not only have I learned to live it, but I have learned how important it is to EMBRACE IT, especially in today’s business climate.

Let me explain.

relayContinuous Innovation Is Now a REQUIREMENT

The industrial age is dead and dying, along with all its guarantees (being an employee of one firm for life, worry-free retirement, etc…).

Innovation is the new currency.

Innovate or DIE. (RIP: Kodak, the big-label music industry, the dodo, etc…)

Companies know this.

Witness how ALMOST ALL companies have “innovation” as a company value, or how billions are poured into R&D.

This is true for both companies and of people.

For example, programmers now cannot invest too heavily in being an expert in one platform. HR people are finding out that job descriptions are getting obsolete (or at best, very high maintenance) because they change all the time. The best corporate managers are those who are able to maintain excellence despite getting deployed to handle very different things and cope with a diverse set of problems.

So how does one cope in this new dynamic?

Becoming flexible.

How does one THRIVE in this new dynamic?

You HAVE to take risks.

Risks automatically comes with a possible downside. That downside is something we fear. (no fear? then it might not be that much of a risk for you)

You want to THRIVE in this environment? Then you have got to face your fears.

Embracing Fear

Quick story. After our first, well-attended Juan Great Leap conference in Ayala-TBI, we were brainstorming as to what to do next. The safe route would have been to do another keynote / panel discussion affair. But then an idea came to mind: what about a group speed dating activity which involves 20+ entrepreneurs?

We all saw the positive possibilities, BUT…

It had never been done before. It would be a logistics nightmare. There were so many questions. Would people hear one another? What if nobody came – this was something very different, so people might not immediately see its value.

It was either going to be work splendidly, or it would crash and burn. There was little in between.

While we were talking about this. A familiar feeling made itself known to me.

Fear.

This was the precise point when I knew we HAD to do this group speed dating thing.

spideysenseReverse Spider Sense

Spidey’s spider-sense tells him if he is in any immediate danger (spider sense tingling!). Fear has become something of a reverse spider-sense for me. If it tingles – there is opportunity!

Now, when evaluating opportunities, I LOOK for that fear.

Is the fear in me?

If there is no fear, then it could mean either of 2 things:

1) I am not interested in the opportunity.

Subconsciously, I already know I don’t find (or at that moment I am not finding) the opportunity presented interesting. Perhaps because its not within my realm of expertise, or perhaps I just think it isn’t feasible for me.

Possible scenarios like this would include: someone inviting me to invest in a startup in a field I don’t really understand that much, or listening to a salesperson pitch a product I have no use for.

2) There isn’t a great deal of risk

If there isn’t a risk, then I am not too worried about it. Chances are great the possible returns won’t be so hot, either. I can say yes to the opportunity, but it won’t really keep me up at night imagining the possibilities.

Possible scenarios like this would include: someone wanting to give me a 1% share for a startup in return for monthly advice, or doing maintenance work in the office, or choosing what tiles would suit the office bathroom.

But if there IS fear?

Then I probably would be asking a LOT of questions about it. I would be nodding or shaking my head vigorously. I would be up – a lot of times all night – thinking of the pros and cons.

If there is fear, then I know that my subconscious is HIGHLY considering this course of action. It ALREADY knows if the opportunity in question is internally feasible for me or not. I wouldn’t even feel the fear if it were OUTSIDE my capabilities. (see #1 above) Fear tells me there is a possibility I can pull it off.

I ALSO know that this would be something WELL WORTH doing, or at the very least, worth a much longer consideration time. Fear is a sign that the returns would be awesome.

This could involve pursuing a huge pivot for our firm, or pondering the high cost of a GREAT hire, or asking someone to be key member of the founding team or the board, or doing a sales presentation to the CEO or the MANCOM of a potential huge client (not really a decision, but an opportunity nevertheless), proposing to my wife, saying goodbye to my decade-long HR career, or even me in my room, musing about a potential strategy.

Fear has ceased to become crippling. It has become my friend. It can be your friend too.

Hoooh! My friend, Your Friend…Whatever Peter! I’m miles away from that! I’m afraid to even tell my friends I’m thinking about starting something!

It’s a process (like EVERYTHING worth its while), will NOT come overnight, and there are no shortcuts.

Here are some tips that may help:

1) Surround yourself with healthy risk-takers (don’t know anyone? go to startup events, go to open coffee – LOOK for healthy risk-takers)

2) Fail

In some ways, this might be like swimming. The only way for you to learn is to dive in.

There is one HUGE thing that happens when you fail – YOU REALIZE ITS NOT THAT BAD.

Because of our primitive survival instincts, we pre-programmed to assume the WORST. (OHNO, I will be out on the streets if I fail! I will be the laughingstock of the barkada, nay, the whole country! Woe is me! WOE IS ME!)

It’s not that bad.

Of course, I’m not saying you should DELIBERATELY fail – but try doing things out of your comfort zone. Perhaps you can try starting the thing you’ve always wanted to do but always feared, but do so by…

stairs3. Starting with smaller risks

Start with low-risk items, and gradually proceed with bigger ticket risks.

Got an idea?

Level 1: Do a powerpoint (not so risky)

Level 2: Invite close friends and present your idea (a tad risky)

Level 3: Invite not-so-close friends you think would be an expert on your idea and present (riskier)

At this point, you’re BOUND to get some negative comments / rejection already (this ALREADY could be felt as a huge failure for some people)

Level 4: Recruit a Co-founder. Among the people you’ve talked to, do a formal proposal saying that you are DOING the idea and you NEED their help as a partner (risky)

Hey guess what – you’ve started a startup!

(Know anyone who would appreciate this post? Hit the buttons and share below and share!)

How To Assemble Your Startup Entourage

How To Assemble Your Startup Entourage

Peter Cauton

entourage

(the following is a guest post by multi-awarded entrepreneur Maoi Arroyo)

As a junkie of all things startup, I’ve always loved shows like Bloomberg’s TechStars. Whichever season you watch, these entrepreneurship-themed reality shows try to select the best teams as opposed to the best ideas. As Ed Catmull, co-founder of Pixar, famously said: 

“The view that good ideas are rarer and more valuable than good people is rooted in a misconception of creativity. If you give a good idea to a mediocre team, they’ll screw it up. But if you give a mediocre idea to a great team, they’ll make it work.”

If there’s one thing I learned in the nine years I’ve helped tech-based startups get off the ground, it’s that business is a team game, and the firm with the best team wins. It’s unavoidable that the media and the public focus on the “front men”. Steve Jobs, Elon Musk, Dado Banatao: the charismatic and slightly kooky guys get the attention. People gravitate to “self-made” men.

Except that there is no such animal.

Show me anyone you think is “self-made” and I will show you at least three other people who helped get them there and are wealthy enough to do anything they want.  Larry Page and Sergei Brin founded Google in 1998, and Marisa Mayer was employee #20 in 1999. If her name sounds familiar it’s because she’s now CEO of Yahoo. Why in the world would she want to be in charge of a floundering company like Yahoo? Because after you grow a company from 20 to 30,000 staff; you have enough money to  be comfortable and you can do something ludicrously risky.

So the question is: if you want to be the next Google, how do you find a Marisa Mayer? Who do you recruit to your founding team and in what order?

The DOM

expertSorry, it doesn’t mean what you think it means. DOM is shorthand for the person with Domain Knowledge. You want to start a restaurant? Makes sense to start with a chef. App Development?  A programmer would be useful. Fashion? A thorough examination of the fashion portfolio and comparative analysis of chaka-ness is a must.

Domain knowledge can come from experience, education, or both. Choo Yeang Keat was a Malaysian cobbler who had been making shoes since he was 11. He built a respectable business which exploded when Tamara Mellon, accessories editor from British Vogue, partnered with him. Jimmy Choo’s shoes now sell in 32 countries for prices that regularly give husbands palpitations.

If you are the DOM, you’d better have geek cred and partner with someone who is market savvy and handle all those pesky numbers and “models” that always seems to be encapsulated in PowerPoint Smart Art. If you aren’t the DOM, find one and give them the role of Chief Technology Officer.

The Wizard

wizardSome people call them mentors, but I call them Wizards. Wizards are both mentors and tormentors. It’s Merlin’s job to tell you that this Lancelot guy you’re thinking of hiring is cuter than you and your wife is into him. It’s Gandalf’s job to call you a “Fool of a Took” when you wake up the Balrog. The Wiz is going to provide you insight to the very important baby steps you should take BEFORE you found the company. Things like technology and market validation before you waste your money on a patent. In return for this knowledge, you should give them a part of your company EVEN IF they aren’t going to be involved in running it from day to day. 3% equity up-front or 10% vested over 3 years (translation: “3 gives”); in preferred shares that have no voting rights but get paid FIRST when you issue dividends. Like any RPG, your wizards will stand back from the fray and need time to cast massive spells. Keep them with you and don’t let them get overwhelmed.

The Anti-You

oppositesIsolate the key things that are characteristic of you and find someone who is the complete opposite. I’m the kind of person who can come back from the bathroom with 20 new ideas that I want to pursue simultaneously. I have a knack for exaggeration. Math classes gave me PTSD. No one has ever accused me of shyness or humility. So I found a detail-oriented, frighteningly accurate, introverted co-founder who inhales numbers and exhales cash. Naturally you have to have the same vision and integrity, but someone you respect has to stand up to you and pull you back from insanity.

The Spartan

spartanThe Spartans embody the philosophy that makes start-ups work. If one Spartan falls, another one takes his place. They work as a single unit. All of them are leaders. Filipinos seem to live in horror of having “too many leaders”. That’s because we misunderstand what leadership is. Being able to lead well is a skill, not inborn ability. You can get people to listen to you by being charismatic; leading them is something you have to learn how to do. It’s essential to be in command of yourself before you try and command others, and you must prove yourself worthy and deserving of your team’s trust in you with your every action. A leader for a startup is not “in the rear, with the gear”. They stand shoulder to shoulder, right up front. They are the tip of the spear. They are the first among equals.

The Spartan is your CEO. On very rare occasions is your DOM a Spartan. That’s because the critical job of a CEO is sales. You know how a Founder-CEO is pitching? His mouth is open. That’s all they do. They have a recruitment pitch, they have a sales pitch, and they have a fund-raising pitch. If your CEO can’t pitch, get another CEO. There will be no cash to manage, no team to enable, no world-changing company if they cannot pitch.

You can call yourself an entrepreneur but until you get a solid team and some cash, you’re just some wannabe with a great idea. Ideas don’t change the world, people do.

Don’t stay a wannabe.

You can learn the fine art of PitchCraft on Saturday, May 25. Karen Hipol, associate director of Carillion Partners, will teach you what to pitch and I’ll teach you how to do it. Attend the event and you get an opportunity in June to get in front of institutional investors, all for one low price! (See I told you all we do is sell).  The PhP 500 discount ends on May 15th, and slots are limited. Sign-up today and build your dream team! – Maoi Arroyo

Juan Great Leap Calls on 5 More Student Leaders!

Juan Great Leap Calls on 5 More Student Leaders!

Peter Cauton

I’ll be meeting around 5 student leaders next Wednesday, 4pm, at the STORM conference room, at Unit 602, Centerpoint Building, along Julia Vargas. The main agenda will be: 1) How to push entrepreneurship and the startup movement in universities 2) How to help student entrepreneurs   (Map here) Our conference room seats around 10 people, so there are 5 seats still free. I wanted to open it up to interested parties.

Do you want to join this conversation?

If you are an incoming undergraduate student, interested in entrepreneurship, and you’re the type of person who gets things done, then you might want to join us.

This is the actual room to be used 🙂

If you are interested, please do send me an email at peter@juangreatleap.com, along with an explanation on why you’d be a good choice.

(know anyone who might be interested in this? forward and share!)

Just Start.

Just Start.

Peter Cauton

just start

I think sometimes we overestimate what it takes to “start” – especially for those of us who are first-time entreps and don’t exactly know what were doing.

(welcome thought: I suspect most first-time startup founders fall into this category – everyone starts out feeling stupid)

Perhaps we’re thinking:

“Oh gosh, I need to raise a million bucks.”

or

“I need a technical co-founder who has a 3.8 GPA in computer science.”

or

“To do this I need to resign from my job and risk everything! Need to prepare.”

or

“I need to win one of those startup contests!”

You know, if we always think this way, we might never come to the point when we think we’re ready to start. It will end up as just some lofty dream we scarcely scratch. Soon, we may begin to tell ourselves it’s exactly that – just some crazy dream.

I remember when I first realized I wanted to share my experiences as a startup founder and entrepreneur, I wanted to write a book. It was my lofty dream, and it was so hard to start – I felt I had to have the whole book concept crystalized in my mind before starting. The sobering moment came when, after 3 months, I realized there was no progress with what I was trying to do.

So I decided to just start. 

I got a free wordpress account, read a bit about blogging, and just wrote my first post. Then the name just came to me – Juan Giant Leap. But then I realized precisely what I am writing about now – the leap doesn’t need to be GIANT to be GREAT.

I thought that precise nuance was important. So, even if I thought Juan GIANT Leap had the better recall, I went with GREAT.

And so Juan Great Leap was born.

Instead of worrying about starting, just start. 

No need to put distracting pressure on ourselves.

Some practical ways to start simple:

  • Talk about your idea with someone whose opinion you respect, or an industry leader in the idea you are thinking of. 
  • Get some real customer feedback – hold chats with potential customers of the idea you’re thinking of.
  • Attend Open Coffee and pitch your idea (for free, without pressure, with people who want to help)
  • Have dinner with potential co-founders. No need to hard-sell (“Would you want to be my partner?!”), instead coyly just ask for advice. (“I value your opinion, what do you think of this idea?”) If the person is truly interested – and would be a fit – the person would actually volunteer and ask if you need help.
  • Think of a name, and invest a bit in buying a URL. You’ll be amazed at how empowering this is – because in some way, your startup is truly “alive.”
  • Get off your butt. Your startup will never happen if it never leaves the realms of your imagination. Get out and talk about it. Create it. Slowly is surely.

How to Use Consulting as a Bridge Between Corporate and Startup

Peter Cauton

stepping

I had a great lunch meeting today with a very talented friend who’s been working in corporate for nearly two decades already. During that span, he’s built impressive credentials and has worked on different projects in his chosen corporate function.

“I’m at that point Peter where I’m at a crossroads in my corporate career. If I leave my company now, I can apply for department head in another firm, but then what? I’ll be looking at a future of just jumping as department head from one company to the other?”

(I was at that same crossroads before, so I could really relate to what he was saying.)

A common friend of ours who was managing her own lucrative consulting practice was asking him if he wanted to pursue the same. It was something my talented friend could establish easily. He then thought of talking to me to get more feedback on making the leap.

I said:

 “Ah. I think one point to consider is the decision to go into consulting or pursue a startup. They are different things.”

Consulting vs Startups

Having been involved in both consulting and startups, I know first-hand how different they are.

A consulting practice centers around the skills and reputation of the Consultant. The ensuing organization is built to extend the reach of the consultant.

For example, from time to time, I still agree to HR Consulting engagements with some firms. They pay me for my HR expertise. If I were to build an organization around this “service,” it would involve creating a support structure around me so I can maximize my contribution – admin people to ensure I don’t get bogged down, a junior consultant to help on the ground with projects, etc…

This is of course, a GREAT thing. I know numerous people who have created either solo consulting practices or consulting firms who have employed 2-3 people, even more. These people are immensely satisfied and do not worry about money anymore.

If you wish to scale though, and make a splashy startup, it probably would not be through a consulting practice, as a consulting practice does not scale. The consulting practice organization is built around the consultant’s particular skill. Since there are only 24 hours in a day, there is only so much that you can do to extend your reach.

While a consulting practice is built around the consultant, a startup’s goal, on the other hand,  is usually create a repeatable, sustainable business – or in other words, to make itself operationally independent of the founder.

If you take me out of the equation in STORM, for example, STORM would still exist. It would still make operate. Of course, a lengthy separation would have ramifications on long-term strategy and growth (I hope), but unlike in a consulting practice, taking the founder from a working startup doesn’t mean it tumbles like a house of cards. (independence is the goal, obviously – taking a founder out of an early-stage startup is a wholly different matter).

In a startup, the product or service offered is SEPARATE from the founder, the founder BUILD the product. In a consulting practice, the product IS the consultant.

So, for those who are interested in doing a startup, and have garnered a signifiant amount of skills and experience in a particular corporate field – here’s one strategy you can do:

Do the Karen Yao

Use the financial stream and flexible hours of your consulting practice to build your scaleable startup idea on the side. Then, as your startup makes revenue, you can spend less and less time on your practice and more and more time on your startup.

Screen Shot 2013-04-18 at 10.57.41 AMTake my good friend Karen Yao, who was one of the entrepreneurs in Startups Unplugged. Like me, she built for herself a corporate career in HR. Then she jumped into a consulting career. During this time, she built Congruent Partnerships – first as a vehicle to extend her consulting practice, but then recently pivoting towards a more scaleable startup idea: HR outsourcing services for SME’s.

The thing is, the jump from corporate to consulting isn’t such a HUGE leap as jumping headlong into a startup. For one thing, you will be using the same expertise you were using in corporate – so work-wise, it will be a very comfortable shift.  The only difference is that the payment just isn’t through salary anymore, it shall be though project-based contracts. Moreover, it’s a good transition – you are already getting exposed to some of the elements of managing a startup: client work, accountability, finances, managing your own time, etc.

Since you manage your own time, you CAN NOW allot some time during the week to work on your startup without giving the startup the whole burden of paying for your expenses. This is crucial. One of the big challenges of doing a startup is running out of money. Running out of money basically means you run out of time to work on your startup.

Leaning on your consulting practice is a way fund your startup product development. You can extend your startup runway significantly.

Have your cake and eat it, too

If you choose to work on a startup which is RELATED to your consulting practice, then that’s a HUGE win-win scenario. Your consulting meetings are not only monetary opportunities, but now also double as pertinent data-gathering and validation activities for your would-be startup.

If your consulting clients are your target customers for your eventual startup? That will be super! You can ask them crucial questions like, “What do you think of this product?” or “Would you buy this product?”

Execute the consulting leap within the same entity

If you make a quick visit to Karen’s site, you’d find that congruent has three product lines: consulting, outsourcing, and solutions. I remember when Karen first started Congruent – most, if not all of her clients were in the consulting business. Gradually though, as the consulting line paid the bills, she began building her outsourcing and solutions lines. Nowadays, she is less dependent on her consulting line. Pretty soon, I’m wagering she will have to make a decision: do I let go of the consulting line? 

We started STORM  pretty the same way. When we started back in 2005, we had no actual product and an undeveloped market. We only had a product idea – flexible benefits.

For us to buy time to both develop the product and educate the market, we made money by going into consulting – we started offering organizational diagnosis to corporate clients. This actually became a profitable business line, which kept us afloat for a few years while we were developing our scaleable product. After some time, our flexible benefits line started making money. Soon, it made more money than our consulting line. Recently, we changed our name from STORM Consulting to STORM Rewards, fully making the transition by dropping our consulting business and offering a pure product.

This is one strategy you can do – you can create a consulting company immediately and course your consulting revenues through this entity. Then when you’ve developed your product, you can easily do a quick pivot.

Your financial books will look better, too.

Do Prepare For Your Consulting Leap as Well

If you are planning this sort of stepping-stone strategy, one mistake is to focus too much on the startup leap, forgetting that the consulting leap needs to be taken very seriously.

It is far from automatic that you can transition from corporate to consulting. You have to have led a great career in your function. You have to be REALLY GOOD at what you do. If not, then no one will pay you. You have to have distinguishable expertise in your craft and you have to have the knack of selling yourself well. You have to consciously develop yourself as a consultant.

Also, plan it out. 

If you already know, for example, that it will be your last year in corporate before you take the consulting leap, THEN BY ALL MEANS USE THE YEAR TO TRY TO FIND A MARKET ALREADY. Send feelers to other consultants in the same field if they have extra work you can do. Do free projects on the side to build a credible portfolio. Network and announce your plans to possible clients. Hustle.

So, if you find the startup leap daunting, perhaps you can do an easier leap onto consulting first, before taking on your ultimate startup leap. It’s a very very viable stepping-stone option. I’ve seen HR practitioners build HR firms, brand managers create marketing consulting startups, finance guys doing finance firms, and so on.

Might as well as be you.

How to take your consulting/freelancing gig to the next level

Peter Cauton

levelup

I know quite a number of freelancers and consultants, engaged in a variety of services: design, HR Consulting, programming, writing, training, fitness, and so on.

These guys are cool – they are able to live the dream of being their own boss and at the same live comfortably.

Some of them are perfectly content with their lifestyle and current circle of clients. I remember one of them telling me recently:

“Why should I complicate my life getting more clients?”

(For me, this is awesome.)

Some of them though, want to expand and are constantly seeking ways to do so. Some have opted to hire an employee or two to help them grow. Maybe more.

If you are among the latter category, this article is for you.

Most of the freelancers, consultants, and consulting firms I know offer a whole list of services.

For a web design consultant, a typical menu of services would look like this:

Hey guys! I can do all these things for you! One-stop-shop-I-am!

– Website design

– SEO

– Website Management

– UX-UI

– Logo design

– WordPress design

– Marketing paraphernalia

– Print design

– Flash animation

– business card design

Moving onto another field, an HR Consultant’s list of services may look like this:

– Training and Organizational Development Consulting

– Performance Management Consulting

– Recruitment Consulting

– Talent Management Consulting

– Onboarding

– Workforce Planning

– Job Analysis and Design

– Job evaluation

– Salary Scale Development

This is all well and good. The intention and logic of offering many things are clear: more services, more chances of getting clients, right?

Here’s the problem.

Go to Linkedin. Search for “web design freelancer” or “HR consultant.”

(go ahead, I’ll be right here)

See the problem?

EVERYONE’S profile will look like mirror images of what I just typed above.

This strategy will NOT make you stand out and attract a market beyond your friends’ friends.

Here’s one branding strategy you can do.

one thingPick ONE thing in your list.

One thing you know you can do very, very, very well.

Then drop everything else. Build your brand about this ONE singular service. Make it the only thing to appear on your website.

OMG, Who did THAT Video? 

In a time when one-stop-shop wedding services were the rage, Jason Magbanua changed the game by delivering JUST wedding videos. Oh, and during that time, I think he even ultra-focused on just doing videographies of the Church wedding (to be shown a few hours after during the reception – I was just stunned the first time I saw this).

Armed with this intense focus, he managed to create his art – magnificent, awe-inspiring videos with a hip soundtrack.

Now, he’s a household name, and arguably created his own local industry.

I’m sure Jason could have offered the typical menu (photography, the album, stills, video editing, videos of the reception, maybe even the floral arrangements and coordination). But choosing but ONE service made him stand out.

The numerous advantages of ONE THING:

1) You stand out

What’s more memorable, saying:

I do consulting in performance management, recruitment, training, organizational development, job analysis, job evaluation, onboarding, HR policies, and Workforce planning,

or saying:

I am THE onboarding coach?

(onboarding – the process of making sure an employee is oriented properly and completely when he first starts in a job)

You can now name your consulting firm something like ALL ABOARD! and get a memorable url like http://www.allaboard.ph. Your website can contain interesting facts  and tips about onboarding. You can position yourself as THE onboarding expert.

Now, everytime someone thinks, “I’m having trouble with onboarding,” she will now think of YOU, and not think about about the kajillion other generic HR freelancers around.

Even if a couple of people in the kajillion might actually be better than you in onboarding expertise, guess who takes the credit for being the best?

If you were the client and you need onboarding consulting, would you go to a one-stop-shop or an onboarding expert?

If you are a startup and you need a lawyer, woud you go to a typical law firm offering generic “corporate legal consulting?” or a focused “startup lawyer?”

If you wanted to do a video on your website to explain your product, would you go to an all- around production house, or Stream Engine Studios, whose website very prominently states:

Hi. We’re STREAM ENGINE STUDIOS, and we make kickass animated explainer videos.

One thing makes you stand out.

2) You are forced to become great in that one thing

Since you are now focused on a single service, you can rally all your resources around making that one thing great. Yup, there is pressure in doing absolutely GREAT work in doing your one thing – this is how you have chosen to brand yourself.

But you know what? That is good pressure. Doing one thing great gives you a larger chance of recognition and success versus doing 10 “good enough” things.

Instead of keeping up with trends and continuously improving on TEN different things, you can just focus on getting better on one thing – which surely will cause radically faster progress.

3) Better scaling

Generally, consulting doesn’t scale very well – if you plan to grow you would need more and more people. Still, “one-thing-consulting” can still scale so much better than a one-stop-shop, where you need to think about multiple services and processes.

Let’s say you offer 5 different services and you manage to get 50 clients. What will happen is you will have, say, 12 clients you are doing one service for, another service for 8 clients, and so on. Can you imagine growing your company that way? It’s like growing 5 startups.

One service across the same 50 clients? Much easier to digest and build efficient processes for.

One last tip 

Building a brand takes time (and is so much worth it). Once you have an established brand which focuses on one thing? Expect a ton of passive referrals.

But what do you when you are just starting?

You can still offer the long list of services, but offer these privately to your immediate network (friends and friends of friends).

For example, if you were a design consultant, you could still offer the service buffet table to your current clients. Logo design for this client. SEO for this other client. And so on.

Your plan, however, is to be the business card design king.

So what do you do? While doing all your other projects, you have to simultaneously be working on building your brand around your one thing – build the focused website, learn a ton on business card design, survey the business card market, think of the amount of innovation you can do in the business card industry.

Then one day, when your business card profits are enough, you can drop everything else. You can truly focus on being the Jason Magbanua of Business Cards.

Gotta have that one thing.

(apologies – any spontaneous One Direction LSS is unintended)