I’ve have never tried to get this very personal process down in one place before. From idea through to a real business step by step, with as many of my own personal techniques and suggestions thrown in, as we go. There are rainforest amounts of books printed about people’s startup experiences – what I’d like to try here is to write about the real techniques and steps I have been through many times before when taking a new business idea and working to move it through to a real product or service. Hopefully a more grounded approach than some of those ‘How to’ or ‘My experience as an Entrepreneur’ books. Well, we’ll see. Questions and comments very welcome!

So, want to start a business? Have the necessary passion to start a new business but are unsure where to start? Looking for that new, innovative, winning new business idea? Or perhaps you’re waiting for divine inspiration to serve up that winning idea like money from heaven before you actually get up off that sofa and GO FOR IT. Sorry to burst your bubble – waiting won’t make it happen. You have to ‘create’ it yourself. But maybe it’s closer and easier to get than you think, maybe you can come up with that idea today.

Here are a few ways that work for me – so much so that they’ve become almost unconscious processes that happen on autopilot and better yet, their easy. Give them a try.

When asked where my ideas for new business come from I often joke that it’s a ‘disease’, something which is uncontrolled, being delivered in the grey matter between my ears without conscious thought or a process. That’s close, but not exactly how it happens.

During my first interview for a role at Procter & Gamble fresh out university one interview question still sticks with me. The interviewer passed a glass across the table and asked me to name ten uses for it. Use number 1 was…a glass, she was unimpressed. Use number 2 was a paper weight, (better but still no cigar), number 3 was a lens to read small print in a document and before I knew what had happened, ten different and increasingly creative (read – crazy) uses had spilled out in the interview room.

That process is not too dissimilar from the process you could try. This redeployment of one product idea (in my case ‘a stack of Pringles’) into another product category (Fire Escape Ladders) helped me come up with the idea for my first company, X-IT Products to produce an idea I’d had for the world’s smallest, safest, strongest fire escape ladder. See the link?

A refinement on that creative free thinking is what we’ll call ‘What if’. Find a product, web service or business that is in the space that you are passionate about and really impresses you. Thought of it?

What’s great about that business? What do you really like about it? Now think about what would make it even better? That would take it from being a great business and make it a world class business. Write down every idea that comes to you….when you feel yourself drying up, read through the list and see if that squeezes any more ideas out of you. Take a read through that list and see if any light bulbs go off in your head – any really obvious improvements or refinements to that already great business?

The third approach that might work even better for you is what I’ll call the ‘Pissed Off’ brainstorm. Has a product, service or business failed to live up to it’s promise? Maybe they over sold you or your expectations were mis-aligned with the reality of the business. Maybe they screwed up or the product was faulty. Perhaps they don’t exactly meet your need. But who cares? You do, because this is an opportunity to figure out what the business or product needed to do to deliver on it’s promise, to meet and exceed your expectations. And if they aren’t meeting your needs because of some flaw, figure out what needs to happen to solve it.

Let’s try an example, I’m driving from New York to Philadelphia – it’s lunch time and I’m hungry. Watching the signs as I travel, what are my options? Ah, here we are – McDonalds, Wendy’s, Dunkin Donuts and a few no-brand obscure Italian restaurants. More often than not if I’m hungry enough, I’ll drive through and buy something. But just once, wouldn’t it be good if I could get something that was healthier. It’s true that most of these places sell salads but then the light bulb goes off! Before Whole Foods selling organic and more ‘wholesome’ food, most supermarkets were similar. Whole Foods changed the supermarket ‘game’ – what about a motor way food joint that changes the game in the same way as Whole Foods?

A quick, drive through that offers freshly prepared, all organic, non-greasy, non-salad food? As of today, at least on the routes I drive, they would be the only food chain of its type. Talk about cornering an underserved market. Surely not everyone want’s a burger or a slice of pizza? Is this a winning idea? Who know’s but it could make someone a lot of money if it takes off. Don’t forget my percentage if you make this one a reality!

So, there are other ways that these ideas are created but hopefully these few are good as a start, so:

Product Design New Application:
Think of how one product or design can be re-deployed to solve other problems

What If?:
How could a great product or business be a ‘world class’ business? How does it need to change or improve?

The Pissed Off Brainstorm:
If only X did it this way….why couldn’t they just do Y?

Try these approaches and see where they take you. Feel free to come back and post how you get on. Maybe then I can write an article on some ‘what to do next’ steps for your new winning idea.

When you find your winning idea then you are already further along than most ‘would be’ entrepreneurs, now to go an make it a reality.

Sign up to our mailing list if you would like to get more ideas for your Startup Success!

Andrew

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So I’ve spent the last week or so thinking about Angels.  No…Not the kind with wings but the kind that dips into their big pockets and help entrepreneurs start and build their businesses.

The first two companies I started began with Angel Investments – for the first start-up, where I had designed an award winning fire escape ladder, the angels cash allowed me to quit being a minimum per hour waged Consultant (given I was working 100 hour weeks…) and pursue my passions to start and build this business.

So – a few moments ago I Googled ‘Angel Investors’ and most of the results focus on what Angels are (broadly) and where to find them…all good points but much too ‘money-centric’.

Huh? You are probably thinking…isn’t that what Angels are all about?

Well I’d like to offer you a different way of thinking about it. 

It’s true that Angels tend to get involved in very early stage companies and often look for a high rate of return on their cash…let me explore that for a second…

“Angels tend to get involved in very early stage companies…” – in my case, the first $XXXK of funds were raised while I was still an employee elsewhere – at that time I had…a business plan and a prototype. THAT WAS IT~!

No customers, no employees, and no office – literally just a stack of pages I’d sweated blood and tears over and a prototype of a product that would go on to look very different.

What these angels were really investing in was ME! And I would guess that most Angels who go ahead and invest in a business ultimately make the decision not because of the business plan, the prototype or even the first few customer endorsements but because of the person with their hand out…

So – back to the money.  Angel investors get involved at the RISKIEST stage of a start-up – most start-ups don’t go anywhere and their money goes POP! Now even if Angels are people with a high net worth – they still (probably) worked hard to make it…so as, in the investor community, the angels tend to take the most risk – they also look for the highest multiplier on their money.

Multiplier?  Whassat? So – for example, they give $10K – if they get $100K back when there is some form of liquidity event then they have made 10X on their initial investment of $10K (i.e. $100K divided by their initial $10k).

As a for instance – I have heard of angels looking for 20 times or even 30 times of their money back. So, for that $10K, they would hope to get $200-$300K back from some form of liquidity event.

Liquidity event? Whassat? …that’s basically even that allows the investors to get some or all of their cash out. (Example – IPO, acquisition etc)

Bringing this full circle – So why Andrew – do you think that the Google results were too ‘money-centric’? Isn’t that what angels are all about?

Yes and No! In my view, the money you get from Angels tends to fall into one of three categories.

Either CHEAP MONEY, EXPENSIVE MONEY or just, plain old, MONEY!

Am I talking about the multiplier again? Absolutely not! The amount of multiplier you, as the entrepreneur, can guarantee to the angel investors is zero! You can guarantee absolutely nothing.  You business might go gangbusters and someone could come along and buy you for a fortune. Likewise, your business could go gangbusters and you could IPO – the multiplier the angels get could be very different…you have no way of predicting what it will ultimately be…

Let me explain what I mean by cheap and expensive Angel money…it’s quite simple…

When I took angel money for my first start-up, it became obvious, very early on, that I had three types of investors:

1)  The Value Add Investor:

This is the investors that calls you up occasionally and is looking to help…they are opening up their contacts database and connecting you with other angels, advisors, entrepreneurs, suppliers or whomever…to help you and your business grow.

Money from this kind of Angel – I call “Cheap Money’ – because you get much more value than just the cash – it makes their money really worthwhile so whatever multiplier you ultimately pay, it was partially because these value add angels helped you every step of the way – their payout is cheap money. You get me?

That leads us to the other kind of Angel…

2) The Pain in the Ass Investor:

There are some investors who, as soon as they give you the check, become an absolute pain in the rear.  From that moment forward, they believe they own you…no, not just a piece of your business (which they have)…but YOU!  They will call you 24/7…they will ask you to jump through hoops that may have very little to do with the businesses immediate needs and, they will tell you, loudly and often how bad a job you are doing and how you should be doing it some other way. And do they open their contact database to help out? Rarely if ever.  Their function is to become a complete time sink and a constant annoyance.

I consider money from this kind of Angel…”Expensive Money”. Wouldn’t you?

The third type of angel is just plain, old money – they give you the cash, you put it into the business and they are happy to get the monthly or weekly updates about how the business is going – their value was limited to the initial cash they may put in.

Now – before I finish this post – I want to leave you with the challenge the above creates…and tell you that over the next few postings I tell you the technique I eventually discovered to ensuring you only EVER get cheap money i.e. Angel Investors who bring a considerable amount of value – perhaps enough to really make your Business the success it is destined to be.

So here’s the challenge – “You can’t tell which angels are going to be in category 1 or 2 or 3 until AFTER you have taken their cash and they’ve signed on the dotted line.”

Its true – you can interview and screen angels (if you have choices…and you ALWAYS have choices…even if its to bootstrap and use your credit card while working at a day job) and it’s tough to tell if they will add value or be the bane of your existence.

I hope the above has given you a few things to think about. And come back so I can take you through how I managed to have a higher chance of picking the value added Angels and getting ‘Cheap Money’.

Please join my mailing list if you would like additional information .

In the meantime – here’s a video with some key intial points regarding angel investors – worth watching:

Here’s to Your Entrepreneurial Success!

Andrew

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About four years ago, I worked with a smart group of people to design and build Advisor Garage.  At the time, dating websites were growing exponentially – it seemed even my postman was about to set up his own version of match.com.  But Advisor Garage was not a dating site to help people met the partner of their dreams…

Advisor Garage was set up to help entrepreneurs ‘connect and date’ advisors and mentors.

This is how we (as tried and tested Entrepreneurs) thought about it…

No Entrepreneur is an Island…Like a great beer – Start-Ups often require a multitude of ingredients…:

A GREAT idea… A plan of execution… Motivated People… Money… A place to do business… Legal support… Marketing… Technology… Money… A Channel to market… Prospective customers with a need… Sales expertise… A Product or Service… Did I mention Money?

…and the list goes on and on.

What about bootstrapping you might ask? Sure – bootstrap – but you still need the above list…and more, you just somehow manage to get them for less. Bootstrapping doesn’t mean no resources – it means cheaper or, if you’re lucky free resources (but remember that saying – you usually ‘get’ what you pay for…).

Pulling all those (and more) elements together can take months – especially for the newbie Entrepreneur – so Advisor Garage was created. The Goal…help ‘connect’ entrepreneurs with advisors with a wide variety of expertise and contacts so they could save themselves weeks and months they would usually spend to find and pull these pieces of the Start-Up jigsaw puzzle together. 

Let me say that in a slightly different way – Advisor Garage’s goal:  Help entrepreneurs shave off months from Start to Market to CASH!

Cash is the oxygen of a new business – Again – Cash is the OXYGEN of the business. ALL Businesses. No exceptions. Private or public sector – for profit or not-for-profit.

Cash keeps the lights on – the people coming through the front door – the computers humming and the telephones ringing. Everything is about CASH. Without it, you can’t service the customer, be a Green company, employ people or yourself or whatever your own, specific, world changing goals for your Start-Up might be.

CASH IS THE START AND END OF A BUSINESS. If you don’t believe me – Go ask General Motors! 

During the three years Advisor Garage was live – over 1000 advisors joined! That’s a THOUSAND Advisors with enormous diversity of contacts, experience and access to resources to help entrepreneurs cut weeks and months off of the cost and time it takes them to start and build their businesses. 

By plugging into great advisors could mean shaving months off the time it takes to bring a business to market. So what?

Those saved months could be critical in terms of securing your first customers…getting ahead of your competition…building your brand and market – but bottom line – it gets you faster to the cash!

During those three years building Advisor Garage I was lucky enough to meet and connect with some great Advisors and entrepreneurs and about six months ago I woke up one morning and had a ‘Eureka moment’…

Advisor Garage had been growing day by day but my Eureka moment told me there was a better way to help entrepreneurs…I felt a broad smile spread across my face as it all fell into place inside my head. 

That day I took down Advisor Garage and began to focus on the Advisor Garage re-launch – a re-launch which would completely change the product /service Advisor Garage delivered but which would offer SIGNIFICANTLY MORE VALUE to entrepreneurs and multiply their chances of successfully launching and growing their young business!

So – We haven’t set a re-launch date yet as we’re still working on it and want to make sure it’s ‘just right’ but if you are interested in finding out how Advisor Garage can SIGNIFICANTLY enhance your chance of Start-Up success and shave months off your time to market and to cash then head over to Advisor Garage and sign up to our mailing list.  We’ll tell you all about our re-launch just before the BIG day!

Next post I’ll tell you a little bit about Advisor Garage’s sister sites that we are also busy developing – Angel Garage and VC Garage…by all means ‘comment’ if you have any ideas about what they may do or even better – what they could do for you and your start up.

Here’s to YOUR Start-Up Success!

Andrew

 

 

 

 

 

 

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