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Small business - Steven Cox | San Diego, CA

Current Obstacles Will Pass. Focus on the Big Picture.

By At Work, Entrepreneur Insights, Leadership, Motivational, Start-Ups One Comment

I was checking my email this morning and a new start-up founder asked me the following:

"P.s.  how did you stay focused and motivated with so many obstacles and uncertainties when you were first starting takelessons?"

Great question and something all entrepreneurs will face. Here's my answer:

Peter,

Thanks for the note.

The obstacles are like the first down marker on a football field. You have to get to them and run past them in order to stay in the game. But the first down marker – and the challenge necessary to get there – is only temporary. What counts is the end zone – the big WHY behind what you're trying to accomplish.

Never lose sight of the end zone. It is much further away than today's challenges and more fulfilling than any smaller obstacle that is present now.

The uncertainties are as much a part of the business as rhythm is part of any good song. Learn to get very comfortable with it and thrive on it. The perils are half of what makes the game fun.

That's the way I look at it. I know I'm in for a long hike, so I put out of my mind any sort of short-term gratification. It seems to help keep me on the right path.

Just my two cents worth…

Steven

 

 

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Business Rules of Richard Branson

By At Work, Entrepreneur Insights No Comments

 

Virgin founder Sir Richard Branson during the ...I

I'm a big fan of Richard Branson. Half because he's a brilliant mind. Half because he's always held up a big fat middle finger to the status quo.

He does things his own way, takes calculated risks, sometimes loses, sometimes wins, but always learns.

That's a recipe for long-term growth… and i dig it.

I just finished a couple books he has written and here are my takeaways I've called "Richard's Rules of Business". These aren't officially his rules, just ideas and concepts that I've internalized.

  1. Break the Rules. Start from the attitude of "Yes I can – OF COURSE I CAN" – Unstoppable self-confidence.
  2. Have fun. Fun should be a prime business criteria. Fun is at the core of how he likes to do business.
  3. It is only by being bold that you get anywhere.
  4. If you are a risk taker, then the art of a good risk is to protect your downside while not limiting your upside.
  5. The bgest way to cope with a cash crisis is not to contract, but to expand your way out of it.
  6. Make up your mind on whether you can trust someone in the first 60 seconds. Then, go with your gut.
  7. As Oscar Wilde said, "The only thinkg worse than being talked about is NOT being talked about."
  8. Separate your companies. This way ione fails, it will not threaten the rest of them. You will most certainly have disasters, so your job is to contain them.
  9. Numbers can be manipulated to prove anything. Don't just go by the numbers – go with gut instinct when looking at business.
  10. "My interest in life is giving myself huge, apparently unachievable challenges and trying to rise above them."
  11. When starting a business, survival is the key. Expenses are the wolves. Protect your young with cash.
  12. Always be reinventing yourself. The world moves and you have to stay ahead.

 

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Interview with the Northwest Young Entrepreneurs Association

By At Work, Entrepreneur Insights, Speaking, Start-Ups One Comment

I had the opportunity to be interviewed by Nick Hampshire with the Northwest Young Entrepreneurs Association about building companies and what I've learned as we continue to grow TakeLessons.

Here is the Q&A:

Audio MP3 download of Steven Cox interview is located here:

 Nick Hampshire: What is your philosophy on life and business?

Steven Cox: PERSONAL MISSION STATEMENT
I live my life in a way that makes a positive lasting difference on people and my environment. I support my friends and family with my time and finances. I live with the full expectation of succeeding and excelling in all I do. I understand that the value of life is not in what I own, but who I love, and what I experience. I make my life count by being a man of integrity that accomplishes greatness by reaching out to help others, being passionate about what I do, and fully developing my mind.  I don't have the right to be ordinary. Therefore, I lead, I lift the human spirit, and I will create a legacy and an empire: an empire of both inner and outer wealth, and a legacy of love.

How did you get your start in entrepreneurship?

  • College: Apartment locator service, bought seven houses on land contract/options, tried to buy a pizza business
  • After school: Fisher scientific, but tried to open a gym
  • Left my job to work for a startup ecommerce company

Do you remember your first "big" deal as a young entrepreneur and do you mind sharing a little about it (details, thoughts, feelings)?

  • College – thought I could do everything. It wasn’t until things went bad that I started realizing that there was science and methodology behind operating a business. It’s harder than it looks.
  • First Startup– landed University of Nevada. Wasn’t even in our wheelhouse. Changed the business.

What made you decide to start your own business?

  • I grew up poor. Wasn’t happy washing dishes and working for other people.  I liked the creativity and struggle. I liked the uncertainty.

As you have started different businesses over the years, have the lessons you learned while starting each business changed? If so, how have they changed?

  • Balanced optimism: I now focus not just on the upside, but immediately how to mitigate risk.
  • Long term: entrepreneurship is not a quick fix to wealth. Some people get luck, but there is a very big chance that you or me will not be lucky. Thus, we have to understand there is a large price to pay, and we have to be willing to pay the price.  Else, just go get a job.

What do you see as the biggest challenges that entrepreneurs face?

External

  • Blind towards risk
  • Trying to do too many things for too many people– no focus
  • Not clearly identifying a problem

Internal

  • Arrogance
  • Understanding your own weaknesses
  • Stay up: “Certainty in the face of fear”

If you had to do it all over again, how would you start?

  1. Find a problem
  2. See if it’s a big enough problem that, if you can solve it, it will make a difference.
  3. Focus on solving that problem. Find people that will support it through money and/or time.
  4. Don’t think about the exit.

To all of the young entrepreneurs getting started in business now, what advice can you give?

  • Plan on a long journey. The ‘quick hit’ is the exception.
  • The 4-hour workweek? Complete horseshit.
  • Want to build something that lasts? Work ½ day. (12 hours!)
  • Because it’s a long journey, pick something where you’re passionate about solving a problem for others.

Have confidence in yourself and your ideas, but don’t believe your own hype.

  • Don’t let optimism overpower realism.
  • Admit when something isn’t working.
  • Measure everything.
  • Fail fast.

Build a team. Your job is to:

  • Share the vision
  • Hire smart
  • Build a culture where others can strive

Capital: Raise enough to allow you to make mistakes with respect to your plan, but not so much that it makes you cocky  which leads to laziness.

  • Your forecasts will be off.
  • Stuff you though would work, won’t.
  • Competitors will not sit idle.
  • Perfection is the enemy of good enough.

Know what your shooting for

  • Have written goals – Quarterly, monthly, weekly.
  • Hold each other accountable

I often get asked questions about "quick cash" techniques while someone is getting started with a venture; if you had to make $1,000 in one week with no list, minimal cash, and no contacts, what would be your strategy?

  • Honestly, I would say that you need to go get a job. Entrepreneurship is not a one-week thing.

What systems have you created or borrowed to manage & grow your companies?

  • I have a personal goals system that allows me to manage different areas of my life (spiritual, career, relationships, social) and see results year after year. I’ve applied that to business as well.
  • SEED – SELECT – AMPLIFY: Don’t ever put out perfection. Just get it out and iterate.
  • Culture matters – create a culture of owners where they focus on constant improvement.

How have you used Strategic Partnerships with other companies & individuals to grow your business?

  • Life is about people, and business is about providing value for those people.
  • When you cut deals, you have to focus on the value you can provide.
  • Deals take forever
  • Never count on them to go through.
  • After they go through, most of them won’t work out
  • So, don’t rely on them to make your business. Don’t ever be reliant.

If you could go back and do something differently, what would it be and why (business or life in general)?

I would’ve been less arrogant in my 20’s. Looking back, I now know to stay humble and learn from everyone I can.

What closing thoughts/suggestions/advice do you have for young entrepreneurs?

  • Some people are built for companies, some are built for entrepreneurship. Find your flow. There is no one answer, only a right answer for you.
  • Don’t worry about someone stealing your idea. It’s already been thought of and tried. Focus on building a team that can help you execute.
  • Your first two companies or your first 3-5 years will probably not be a big success. That’s ok. It’s part of the journey. Breathe and be ok with it.

Strategic Partnerships with Big Companies

By At Work, Entrepreneur Insights, Start-Ups, TakeLessons.com No Comments

Recently, our company has been fortunate enough to strike deals with channel partners that should help us in our quest to become the "Starbucks of Music Lessons". Starting in August, TakeLessons will be giving in-store lessons in conjunction with our partners. The service will provide certified TakeLessons local music instructors to thousands of kids and adults throughout the country. Partners include:

From a business perspective, cutting strategic deals is part art coupled with a ton of hard work. The video below walks you through some of the things we've learned over the past 2 years while negotiating with our partners. Main points include:

  • Have persistence
  • Focus on providing true value for the partner
  • It's a long process getting to yes. Don't get discouraged.
  • Build multiple relationships inside the channel partner
  • Get a good legal team
  • Don't spend cash until the deal is signed

How are you going to make a profit in your startup?

By At Work, Start-Ups, Venture Capital One Comment

Mark CubanImage via Wikipedia

I read an interesting post from Mark Cuban today on the problems of startup success using a free model. Back in the 90's when I was cutting my teeth around web/tech, the mantra we heard from VC's was "get big fast", and "eyeballs are everything", and "don't worry about making money, we'll fund you", and "you can get a higher valuation if you're NOT producing revenue".

All of these statements seemed odd to me. I do understand the value of first-mover advantage, but what are we in business for if we can't focus on providing value that people will pay for?

Mark argues that the company that is successful on being free will feel the need to continue to build bigger infrastructure and hire more people because the next 'free' thing is right around the corner. This means they never learn to be lean and protect themselves in downturns. In order to stay competitive with the next free thing, they'll spend too much money and lessen their ramp time. 

"The more success you have in delivering free, the more expensive it is
to stay at the top. The more success you have, the more important it is
to management to remain successful.  The more important remaining
successful is to management, the more money they will spend, the more
chances they will take, the more infrastructure they will build, the
more people they will hire.  All of the things that will prevent them
from staying lean, mean and flexible. All of the things that distract
them from innovating within their core competency
."

I live in downtown San Diego, and across the street from me, a new restaurant just opened. Based on a reliable friend in the local restaurant scene, I know they spent a total of $2.5 to $3 million to open the doors. This is about the same amount of money raised by a web quasi social networking company I'm familiar with. The difference is that starting day one, the restaurant had customers lined up willing to pay $50 – $75 for it's service. The web company, now two rounds of financing and three years into it, is still not charging for their service, and I question whether they have anything that people will actually pay for. Now that they've done a series A and B, I doubt if the founding team even owns the majority of their company. Thus, the entrepreneur has locked himself into a job.

(As a side note, I absolutely believe in raising money for growth. Once a model has been proven, it makes sense to accelerate the earnings, and normally, this takes additional capital. The difference is that at this stage, the company has been given the task of figuring out customer demand and iterating their model quickly. Those that succeed are able to find the model that works and begin to place their efforts towards amplifying their processes.)

I just have a different way of looking at things. I speak to entrepreneurs all the time that want in the game simply to cash out. There's more thought to the exit than there is to service needed to provide the exit. It's rare that I hear them say, "here's the value I provide to my most loyal customer". Just like in the 90's, it doesn't make sense to me.

Unless you are starting a company for the sole purpose of flipping it, it is my belief that the company should have a clear revenue model rolled out soon after launch. This means you may have to build slower and have to execute on a customer-centric strategy. The revenue generated will give you a longer launch-pad and the company that you've toiled and sacrificed for will remain in the hands of the people most passionate about its success.

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