Tag: entrepreneurship

STEP 6: Why You Should Rethink Doing a Launch

Peter Cauton
Think VERY carefully before punching that button

(This is the 5th post in the series 6 Steps to Startup Launch. You can find the introductory post here, and the previous post here.)

Ah. I remember our own “launch” back in 2006. It was a grand thing. We booked a room at Discovery Suites for half a day and we invited a number of corporate managers to a free “product launch” of our Flexible Benefit services in STORM. Since we didn’t really put in a lot of cash in the venture when we started, this was a major, major expense for us. We filled the room with people carrying important-sounding business cards. And yeah, we felt like we had it made.

Of course, it was a flop. Not one person in the room bought our product. If anything, we just broadcasted to some very important people how silly we were.

We didn’t exactly learn our lesson fast.

Undaunted, around a year after we tried exactly the same thing with another product – this time though, we had free wine! Not one person in the room bought this new product. We got our first sale for this product much more organically – by talking with and cross-selling to an existing customer.

Take note that launching is different from starting or incorporating. “Starting” happened when you got your founders together and momentum was built. “Incorporating” happens independently of these six steps to startup launch. Indeed, you can incorporate at any time within the process.

So what is “launching?”

Launching is when you let everyone know about it in one sitting – through a press conference, or a large newspaper article, or when you have a big product launch event.

My recommendation? Don’t bother.

In a launch, the name of the game is to talk about how great you are, about how your product is the best and how it will change things. Chances are, this early in the game, you startup is the complete opposite – you are making mistakes, iterating, fighting multiple fires at the same time. There’s a small chance that you can actually live up to the expectations that come with a big launch.

Moreover, this early in the game, the amount you will be spending to do your “launch” might best serve you in some other way (payroll, iterating).

If you absolutely have to though, then do it as late as possible in the ballgame. Perhaps when you have a small number of customers already. One simple, efficient rule you can follow is that your launch has to be funded by profit funds already, as opposed to initial investment funding.

Think of all the great startups you know. No, you probably did not get to know about these startups through some “launch” or press event. Didn’t they just sneak up on you? Perhaps a friend told you about it.

Instead of “launching,” then think instead about how you can develop the small customer base you already made during the feedback and iteration phase. If you have a B2B service concept, then you can ask them if they can refer anyone else who would benefit from your product – and then give them a good incentive. If you have a web application, think of how you can make your service go viral – the Dropbox viral strategy is a great example. If you have an actual product, then network with potential distributors and negotiate good deals.

The point is to go out and do. Go out and do. Go out and do. With perseverance, passion, and creativity, you’d be surprised about what you’d have in your hands after some time. THEN perhaps, it might be good to think of that launch.

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Stuck in Traffic? Use the time to listen to these invaluable podcasts!

Peter Cauton

One habit I picked up in my startup life is reading business books. I started slowly, and then grew to read them voraciously.

But when I transferred houses from one which was a stone’s throw from the office to one which was an hour and a half away, my reading time got stymied.

This was how I introduced myself to the world of podcasts. I would download podcasts from the web, upload them into my mobile, and listen away: 3-4 hours a day sometimes in the traffic. Great, wonderful learning – during a time when there is minimal distraction.

Want to get started?

Let me introduce you to one of the most elaborate startup resources available online: The Stanford Entrepreneurial Lecture Series.

This is a series of podcasts from some of the most renowned startup founders in the world, talking about a variety of topics concerning entrepreneurship.

You can download the podcasts freely here. You can view the videos here, but I don’t recommend that while driving 🙂

Some of the podcasts you can start with:

A) Unlearn Your MBA

B) Honest Advice on Starting a Company

C) A Devotion to New Ideas

But believe me, almost all the entries are worth listening to.

If you do garner any concrete, meaningful insights from these sources, do share them below.

Happy learning people!

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Pick your startup idea using the 3 circles

Peter Cauton

A long time ago, I read the bestselling book by Jim Collins, a book which a lot of you are probably familiar with, Good to Great.

I have forgotten everything about the book except his 3 circles framework. Jim illustrates that for good companies to become great, they have to exist in the “sweet spot” of 3 overlapping circles. While the book was really made for large corporations, and used data mainly from large corporations, I realized how applicable the “3-circle” framework is for startups. I use this framework extensively in startup product development.

My simplified version of the framework looks like this:

So let’s say you’re deliberating on what startup idea you’d like to pursue, and you have a few ideas you’re evaluating. This framework then becomes extremely useful. Each of the elements are crucial.

Some scenarios:

1) You have an idea you are passionate about, and can do it brilliantly, but people probably won’t pay you to do it.

Then this is simply a hobby, not a business. I could be the very best in the world in naming every G.I. Joe character who ever existed and recite their complete profiles, but the likelihood of me getting compensated for this skill might not be so hot.

Here’s the interesting thing here though: because of the internet, you can now easily find people with similar passions as you have. If you can build a related skill-set to world-class levels – the internet makes it so much easier to find a market. So say you’re the world’s best in restoring action figures, there’s a better chance of finding a market now than there was pre-internet.

2) You can pursue something you are passionate about and people will pay you to do, but you aren’t so good at it.

Then at some point your startup will fail, because consumers don’t like settling. This is still a pretty good spot to be in though, because your objective becomes clear – you have to build competence.

3) You can also choose to work on something which you are really good at, and people will pay you for it.

If you leave your corporate job and form your startup under these circumstances, then this is really jumping from the fire into the frying pan. This is really the corporate assembly line all over again. It’s actually a bit worse, because it will be harder to extricate yourself from the situation. So while this is tempting, it’s a recipe for frustration and zombification. Don’t.

One important thing to consider is that startups are typically composed of more than one founder. So it becomes more interesting (and fun) to tackle these questions.

What are we passionate about? What will people pay us to do? What are we collectively awesome at?

Time for that coffee meeting.

An Open Letter to Philippine University Deans and Leaders

Peter Cauton

(My friend, please read through this. If you agree with its content and find it important, stop being passive – don’t hesitate and SPREAD where you feel is necessary. Post it on your Facebook account, Tweet it, comment on it – agreeing or disagreeing, email it to directly to University Leaders in your network, or print it out and send it to their office, then perhaps tell them what you think about it. Let’s not wait for other people to do it, nor think that “this isn’t my problem,” because in some way, it is  –  peter)

Dear University Deans, Leaders, and Administrators,

If a young, impressionable Steve Jobs or Mark Zuckerberg were studying in your institution right now, would he be in an environment that would allow him to fulfill his potentials?

Leaders, there is an urgent need for you to help in spurring startup activity in the country

Let me explain.

Fueled by the internet economy and inspired by the likes of startups Google and Facebook, there has been a global upsurge in the formation and development of startups.

In fact, startup incubators have sprouted left and right. Incubators such as Techstars, Startup Weekend, and Y-combinator have created successful company after successful company. Young people, fresh grads – the best of the best – now see startups as a real, exciting alternative to the corporate grind. Startups are being formed at a rate unseen in human history. It’s already cliché to say “now is the best time to be an entrepreneur versus any other time in the history of the world.”

And it isn’t just happening in the US.

Google “India Startups” or “Indonesia Startups” or “Singapore Startups.” Exciting isn’t it? Lots of activity. Lots of firms.

Now, Google “Philippine Startups.”

As a country, we are missing out. Badly.

For the last 7 years I’ve been busy recruiting hundreds of young people, both as employees and/or partners to some of the startups I’ve been associated with.

I thought it would be easy for me to convince them to take a leap by offering good pay, equity, the chance to be the captain of their ships, and the chance to work on something meaningful.

It hasn’t been easy. In fact, it’s been quite the opposite. Automatically, most young people would explain to me their perceived  singular path to success: a few years climbing the corporate ladder, then an MBA, hopefully abroad, then back to that ladder again.

And they toil away in corporations, working for just their paychecks, a good number devoid of any passion for what they do. Worse, they think it’s as good as it gets. They end up wasting talent – Filipino talent being highly lauded as some of the best in the world – doing cookie cutter work that is beneath them. There are a lot of these people.

This is a perception tragedy of the highest magnitude.

The world has become flat. There is no reason anymore why a few bright kids in your school can’t create the next Google, or Facebook, or Zoho.com (a huge global Indian startup).

There are a number of valiant entrepreneurs out there who are making a difference, like ProudCloud’s Jay Fajardo or Brain Gain’s Paco Sandejas, but they are few and far in-between. There needs to be a grassroots-level effort in spurring interest in startup development.

Leaders, this HAS to begin in our schools.

We have to ingrain in our students that creating startups is not only possible, but it is the highest form of work, because it involves creating a company around what they are passionate about. We all know what happens when we work on our passions – GREAT WORK happens. GREAT IDEAS ARE ENFLESHED and become real. Startup work is hard, yes, but it is also extremely fulfilling, liberating, and a big part of nation building. Startups spur economies.

It is already too late to target people when they graduate. Observe what your graduates do upon getting their diploma. They create cookie-cutter resumes and send them en masse, hoping to get calls from whoever firm  finds their resumes attractive. A good number of your graduates even go for the “first company to call,” blatantly ignoring their natural God-given inclinations and talent.

They only would need to look around a bit to see that some of the best startups in the world were founded by young, inexperienced people. In fact, these startups work precisely because they were founded by young, inexperienced people.

Why not young, inexperienced Filipino professionals? There is no reason. None. In fact, with the sheer talent and ingenuity of Filipinos, we should be natural startup founders. Sadly, most young people do not realize this. Most of them have never even heard of Filipino startups.

This is a serious problem you can do something about.

Leaders, you have to do your part in making them fall in love with this idea. It is in your hands. Convince them that they CAN go after what they love to do. They do not have to compromise. We have to target them on the undergraduate level because this where dreams are created. This is where they fall in love.

I do have some humble practical suggestions, which I hope you can consider:

1) Emphasize Technology Startups

This is where the world is headed. This is how our country can be recognized – if we create a great tech startup. Or two. Or three. This is where costs have fallen so dramatically that geography is almost negligible. We can compete.

When I talk annually to management graduates who go through business simulations, I always get disappointed because 99% of the ideas pursued would be retail. It is SO hard to get noticed in retail. So hard to go against P&G, URC, or Unilever. It also costs a ton of money to produce inventory. Huge risk. On the other hand, the original code used for Google and Facebook were essentially created with no cost of goods sold – by students. There is now even a science emerging behind creating web startups which you can include in your curriculum: The Lean Startup Methodology.

Next suggestion is related.

2) Multidisciplinary Projects

This is how I basically build startups: I get a business domain guy, a programmer, and sometimes a design guy together and sell all of them on an idea. Then I let them work.

Actually, this is how most startups are built – complementary pieces. During the last Startup Weekend in Fort, people were grouped exactly this way.

Why can’t we do this in the University? Get a computer science student, a management student, a psychology student, and a design student together – then ask them to build something. These people all end up working for corporations anyway – so it doesn’t make sense that only business students are required to participate in simulations.

Can you imagine a business simulation activity where your best tech people are coupled with your best business people and your best design people?  Isn’t this exciting? Wouldn’t they produce great ideas and great work?

Under this lens, it’s a bit easier to envision to imagine lasting startups coming from your incubator programs.

3) Hire entrepreneurs

At some point, there needs to be a limit as to getting corporate people to teach business classes. Get people whom you would normally NOT get: the misfits, the square pegs, the heretics. These are the best entrepreneurs. Give the misfit, the square-peg, and heretic students in your school a hero they can learn from and relate to. They will be the best entrepreneurs. Under no circumstances can you allow your part-time teachers from corporations brainwash them into thinking that the only way is the corporate way.

And, since these entrepreneurs are few and far in between, you may have to go after them, instead of waiting for them to come to you.

4) Give startups a chance in your job fairs

If you think about it, the whole system is stacked for the big corporations, who are the biggest advertisers, and therefore are treated like superstars during the whole senior recruitment process. You can do something about this. Hold a “startup day.” Invite Philippine startups to recruitment events and don’t charge them large fees. At the very least, you can level the playing field. The big corporations may complain, but you can chalk it up to “supporting the national movement for entrepreneurship.”

These are but some ways you can spur your student population to fall in love with startups and entrepreneurship. I am sure you have even better ideas which are brewing right now.

Bottom-line is, something needs to change. The status quo isn’t cutting it. We are being left behind.

Leaders, I have faith in your ability to really listen, make the needed changes, and commit. We need you to. The country needs you to.

That great potential entrepreneur studying in your school right now needs you to.

The Destructive Power of “Not Yet”

Peter Cauton
Dangerous business

Around three years ago, I had a coffee talk with an entrepreneurial fellow named Randy (not his real name, rhymes though).

Randy was a mobile applications programmer working for a large telco. He was carefully explaining to me about his idea for a mobile application/mobile service which I thought was just super – first in the local market, clear user value proposition, clear monetization strategy, low investment costs.  I had a lot of questions, but he gave thoughtful answers – it was obvious he gave a lot of thought to his idea. Typically, I got really excited and told him he should start working on the code immediately. I reasoned he didn’t need to resign, but that he could work on the code and the interface after hours. I immediately offered him whatever help I could give – assembling a team, a table in our office, etc…

He smiled a bit and stopped me from rambling on. Then the all-too familiar words were uttered.

“Not yet.”

He explained he wanted to “polish” his idea further before we did anything concrete. I argued with him a bit, but he was resolute. I didn’t want to appear too excited and do a hard sell, so I just stopped and asked him what his timetable was.

“Maybe in a couple of months.”

I emailed him a couple of months after. I asked him about his timetable.

“A bit busy now with work. Maybe early next year.”

I didn’t push anymore.

Around year and a half after, I sent him an email. It featured a link to a local application. It was basically Randy’s idea. Only, it wasn’t him who made it happen.

He replied with something like, “Too bad. On to the next idea!”

Too bad? Too bad?! I’m not really sure if he didn’t feel any regret at all or it was a coping mechanism. I had no doubt in my mind that the experience he would have garnered would have been tremendous – best case: a successful startup, worst case: invaluable knowledge. Instead, he chose to throw it away without trying, another startup which died without even getting a chance to live.

This is why “not yets” are so dangerous. At least a “no” isn’t self-pretentious. A “no” isn’t about fooling ourselves.

A “not yet” is comfortably nestled between a yes and a no – it’s such an easy reply to give to any question which implies a commitment. And so it remains the most common barrier to startups.

But life will not wait. Competitors will not wait. The window will not wait.

(and if you are in corporate, the longer you wait, the more the system will make it harder to for you to take any leaps)

I remember an ex-officemate once told me about his brother who got into this huge vehicular accident and nearly lost his life. The next things he did are almost too obvious: he quit his (largely successful) work in corporate, and put up a resto in Tagaytay. (If I remember right, it’s Firelake Grill – an awesome place)

Does it really take a life-threatening moment for us to pursue our passions?

Enough not-yets.

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The only shoe that will fit perfectly is yours

Peter Cauton

Each individual is unique.

From our fingerprints, our view of the world, our biases, our histories – we are each truly unique.

Our uniqueness extends to what exactly satisfies us at work.

Some of us prefer sales, some research, some human resources, some supply chain management, some finance, some technology.

Some of us prefer to work at night, some mid-afternoon, some are morning folk.

Some of us prefer working with people, while some prefer to work alone, for some “it depends.”

Some of crave simplicity, while others desire sophistication.

Some of us get a thrill out of talking to someone new everyday, while some of us want to a correspond with more an intimate set of people.

Some of us want structure, while some of us would want none of that.

Some of us like synthesizing, some facilitating, some writing, some performing, some speaking to large groups.

We all have a unique fulfillment menu. We are each fulfilled by a combination of different things.

This is why job-hunting is so tricky. We ALWAYS end up compromising something.  Isn’t it funny that there’s always something missing?

How many times have you said or have you heard others say, “The salary is good, my boss is cool, the work is okay, but, I don’t know, I’m just not happy.”

A corporation is someone else’s dream. It is someone else’s menu. Someone else’s shoe.

In the end, the only shoe that will fit perfectly is yours.

9 Startup Myths Part 3 of 3

Peter Cauton

This is part 3 of a 3 part series. You can find part 1 here, and part 2 here.

7) Bigger is better

Last year we were up to around 15-16 people. This year, while we’ve lessened our headcount to around 10-11 people,  we’re set to double last year’s revenue level. Guess which situation I’m happier with?

Early on, it was always an assumption of mine that the successful companies are the bigger companies – bigger headcount, bigger operations. So expansion was one thing I was conscious about. I also remember the saying that you MAKE room for an A-player in your firm even if there’s isn’t exactly an urgent opening.

This was until I experienced needing to fight to meet payroll. This was something that I’ve never experienced before – if I didn’t make a sale, my guys don’t get any money for the month. Remember, recruitment in a startup entails selling dreams and encouraging people to take risks. The LAST thing I wanted to do was to face them and tell them we don’t have any salary for them for this month. So we did everything we could to meet payroll (and thank God that in our 7 years, we’ve never missed payroll – I find this to be nothing short of a miracle, especially during the early years). We also exhausted all means necessary before having to actually hire a new person.

This also allowed us to look at opportunities in a totally different light – how do we help this new client and make it work with only our current manpower? We forced ourselves to reconsider our assumptions and leverage everything we had (technology, network, processes) into making it work.

The results?

Larger revenue per employee. Lower costs. Better efficiency. A more versatile team. A smaller team which feels more like family than anything else. If, 5 years we experience much revenue growth and we’re still at 12 people?  I’d be ecstatic.

8) There will be no more jerks

The term I wanted to use was this one (an interesting book – talks about the negative bottom-line effects of employing jerks, even super-talented ones). I changed my mind, thinking my kids might end up reading this someday.

So, jerks it is.

You know the type – every company would seem to have them – pompous hotshots who humiliate and specialize in public lashings. After 10 years of encountering people like these in all the corporations I had worked for, I said to myself, “No jerk shall ever set foot in my firm! If one of them slips throughout the cracks, I will fire the person immediately.”

You know what, we’ve actually never hired a jerk (well, maybe one teetering on the edge). Our office has always been a fun, light place to work in.

Alas, while our firm has largely been jerk-free (not a small feat, as there are stealth jerks who don’t register during the recruitment process), I had forgotten that I was now exposed to more of the outside world – clients, suppliers, partners, government agencies, etc. While a large majority of the people we work with are fantastic people whom we love interacting with, there are always one or two exceptions to the rule.

Sigh. So I guess there will always be jerks. The trick is learning how to manage them.

9)You can do it part-time

Sure, you can do small businesses and lifestyle businesses part-time. But a startup? (definition here)

In a lot of ways, growing a startup is like parenting. You need to spend TIME with your baby – nurturing, guiding, supporting. Like a parent, there will be some point where your startup baby can fend for itself without you. But during the formative years? Your startup will not grow to its fullest potentials if you are an absentee startup parent. Name one uber-successful startup with part-time founders. There has to be someone full-time.

He's going to need your full-time help...

What made STORM work was that for the last 7 years, either Pao or I were at it on a full-time basis at any point in its existence. Now that we are both back at it full-time, we are experiencing tremendous growth. That’s no coincidence.

So Peter, how can you do these other startups if you are full-time in STORM?

Just early this year I’ve had illusions that I could somehow pull this off – being CEO of multiple firms, in effect. This is a fool’s errand, I have quickly come to realize. For these other, newer startups to work, I know I will have to groom quarterbacks. I can coach, but only from the sidelines. Someone else needs to quarterback.

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9 Startup Myths Part 2 of 3

Peter Cauton

(The following post is the second of a 3 part series. You can find part one over here)

4) Business Plans Are Important

Yup, it's for dummies alright.

What 4 years of college business teaching hammered in me was that I needed to create a business plan for my startup. I needed to put everything in writing and project my financials – on a short-term, medium term, and longterm basis. So during our first foray, we spent several days crafting an 80+ page business plan, crammed with a boatload of projections and analysis. We had a five-year sales forecast with assumptions on pricing, costs, and market. We had complete projected financial statements across those five years. It was a nice plan. It was something you could submit to a marketing class and get an A with.

It was also a complete waste of time.

The investors we gave it to never read it and instead asked us for a “simpler” 2-page summary. Moreover, after our initial effort to draft this plan, we ourselves never bothered to look it again.

Why? We really had no idea how people would react to our company. None. Our initial product, a fully customizable flexible benefits system, was a first in that 2005 market. Who knew how people would react? Our assumptions were guesses.

Remember this very important quote from renowned entrepreneur Steve Blank:

No plan survives the first contact with customers.

True enough, the moment we talked for the very first time with potential customers, we threw the initial plan (our 80 page masterpiece!)  out the window almost immediately. Almost all our assumptions were wrong. 2 weeks of work flushed down the toilet in seconds.

So instead of a crafting a long, static business plan, draft a short, flexible 2-page one. Use common sense to check if your numbers look alright. Take note of your assumptions.

Then, MOST IMPORTANTLY, immediately talk to potential customers and check out all your assumptions. Most of them will be wrong. Using what you learned, redraft your 2-pager. Rinse and repeat. Test and iterate till you get your model right.

5) Things Stabilize

Pao and I always thought, “OK, in time, we’d stabilize.”

Uhm, no.

What we’ve discovered instead is that every year is different. Vastly different. The moment we’d think that, okay, steady na tayo, let’s just stick with this, the market throws us a curveball and forces us to change things. Twice, we’ve decided to kill off certain services, only to have a huge company come and ask us for exactly those services. When it happened a second time, we even joked that the best way to make a business line profitable is by killing it off. Once, we were excited to bring out this new retention tool in the market. We made a big launch and started getting new clients. In a few months however, the recession came out of nowhere. Retention was the last thing on our clients’ minds, and one by one, our clients pulled out.

Bring it on!

Running a startup involves navigating your firm through a sea of constant change. So, while there’s always that huge problem which can sometimes threaten your very existence, thank God there are always even more opportunities to seize and take advantage of.

Yep, it isn’t for the faint of heart, but hey, you can bet it’s so much more exciting – and gratifying – than being a cog in the machine.

6) You need to pump money into traditional advertising

For years, I would always bemoan the fact that most of our clients came from word-of-mouth. I would always say, “imagine if we did active marketing instead of…nothing” And I would dream of big marketing campaigns – but couldn’t do it either because of a lack of time, a lack of budget, or both.

Eventually, we did direct marketing campaigns and sent an untold number of letters and email to potential customers. For all the time, money, and effort this necessitated, we got meager results – we got very few clients through this route. I then realized when I was in corporate I would just shred unopened sales letters, and delete sales emails before I read them. I hated spam.

In the meantime however, the “nothing” marketing strategy was churning out client after client. There would be phone calls from strangers referred by people we worked with, even people whom we didn’t work with, but with whom we shared an interaction or two with. Our biggest clients are almost all from referrals.

It turns out, it wasn’t “nothing” at all. The good work we poured in with our current clients – the service levels, the innovation, how we made it easy for people to relate and work with us – created ripples we never realized were spreading. In 2011, we spent I think the least amount on traditional marketing as we have had in the last 4 years, yet, this year is shaping up to be our best revenue year ever, by far. This has really made me reevaluate what I think I know about marketing. The rules are changing.

Last three myths next post!

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9 Startup Myths Part 1 of 3

Peter Cauton

For the next three days, I’ll be talking about 3 assumptions I discovered were completely wrong as I went through the startup process:

1) You need a ton of money to start

Nope, you don't need it.

Back in 2005, we were rejected by 2-3 investors before we said, “The heck with it, let’s just pool our own money and start.” My initial cash-out as an owner was P30,000.00. Far cry from the hundreds of thousands we thought we needed. It turns out it was enough.

Nowadays, you could start firms with even less, as the cost barriers continue to fall.

Last Thursday, I had a productive brainstorming session with an old friend of mine who was in the printing/publishing business. I suggested, “Why don’t you try building a 2.0 version of your current business on the net?” He told me he thought it would take around P2-3 million to do a web startup.

I told him I could connect him to tech people so he can knock zeroes out of his initial investment assumption.

Web startups are the most cost-effective startup type of them all. If you can program, you can build an e-commerce website for less than a pittance and start a business. You don’t know how to program? Sell your startup idea to someone who does and offer her substantial equity. She can instead work on the website for the equity instead of you paying a salary or a fee.

A great entrepreneur will ALWAYS find a way to get things done without a huge initial investment.

2) You will be your own boss

This was one of the first myths I discovered just wasn’t true.

When Pao and I started, we immediately made business cards which said “CEO” and “COO.” Yeah, we just loved the sound of that!

The moment we worked with clients though, it became very apparent who the real boss was. Needing to prove ourselves and earn trust in the market, we needed to over-deliver every time with every new client. That usually meant being under the beck and call of each client who chose to work with us. They were the real bosses and dictated everything.

Oh, you want this 4 month project crammed into a month?

Sure, no problem!

Oh, so you want me to do this 20-slide presentation which isn’t in the contract we signed? For free?

Sure, no problem!

Even the titles themselves worked against us. Once, Pao was in a presentation with a bank executive,  to whom he gave his “COO” biz card. Upon looking at the card, the client smiled and replied, “Oh, COO ka pala eh, ibaba mo naman young presyo.”

From then on, we just changed our titles to “Consultant.”

3) My corporate life would prepare me for startup life

When we were starting, I thought my 10-year corporate experience would help me run things in STORM.

Wrong.

There is nothing in my corporate career that could have prepared me for life in a startup.

Here’s the big difference: in corporations, unless you are the CEO, you think only as far as your function is concerned.

Going up the corporate ladder in human resources, I only thought as far as HR was concerned. Yes, I was trained to be a “strategic business partner” and know the business better – but I never made decisions for anything beyond my departmental role, and I would always look at things through the lens of my function.

In a startup, you learn veryveryvery quickly how and why every decision affects every other business function. Since resources are extra-scarce in new startups, you are forced to make (quick) decisions considering ALL the affected functions. Nothing in isolation.

Let’s say you want to implement a particular marketing plan. You then make an analysis that you would need someone full-time on it for 3 months. You could do it yourself, but then who would do current consulting work you are doing for a current client? Let’s say you consider hiring a person instead, what would that person do after the 3 months are up? What sort of person will you need? Do you have enough money to afford her? Who would train her? What happens if she’s successful and lands projects within the first month? Who would do the account management for these new clients?

Corporations train us to do work on a per-department basis. Sure, you have your management trainee programs – but each of these trainees is ultimately assigned to a home department after their tour of duty.

Startup work demands immediate holistic, systemic thinking. A corporation trains us in a singular function, because this is the most efficient way to structure things (like an assembly line).

This is why I’ve always said to friends that in a single year in a startup, I learned more about business than a decade in corporate.

Three more myths busted in part 2!

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Start@Starbucks!

Peter Cauton

Start-bucks Coffee.

My first startup, STORM Consulting, started as an idea in 2005, I talked about it with around 10 people – all potential co-owners I targeted – mostly in Starbucks. I then narrowed the field down from ten to two people and began building the foundation of the firm with my two new partners.

A recent startup, StreamEngine, (site is still in beta) which is launching this January, started when I talked to potential partners – mostly in Starbucks (some in Seattle’s Best).

A chunk of my time now I’m currently using by  talking to different people regarding different ideas – all in coffee places and dining areas in the metro, 30-60 minutes each, mostly after hours.

You want to know where to start? Talk about it with someone. Get that idea of yours out of your head and into a conversation. To properly nurture ideas, they need to be out in the open, where they can grow, receive feedback, and get the attention they need. The more you talk about it, the more your idea will become real, more palpable. Energy is generated, momentum is generated – both critical elements in launching a startup.

Ideally, you are also using this process to recruit for potential partners. This is very critical, because once the incorporation is done – you essentially become married to your partners. Listen carefully: Who is excited about your idea? Who can help you take your idea further? Is this person DIFFERENT than you in key areas (ideas, skill set, network)? Is this person SAME as you in the key areas? (values, principles, work ethic)

So you want to start? Grab a cup with a friend tonight!

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