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Lost in ‘startup’ translation: What to know before going to the US

Published April 15, 2013 Uncategorized 

“We can’t raise money from local VCs.  Can you introduce us to some investors in Silicon Valley?”

I often receive this question from Founders outside the US, and cringe almost every time. If you are a Founder of a startup and you are not among the ranks of Rovio, SuperCell, Spotify or Skype (in otherwords: 99.99% of startups out there), take a moment and see yourself from the perspective of the VC.

You see in your startup an exciting, high potential idea that is ready for  ’smart’ VC money.

A US investor, however, sees a startup that has not yet been endorsed by its local investors community, a founding team with few, local, trusted references, an offshore corporation subject to completely unknown laws, and a 16-hour trip to get to their headquarters.

Hm.  Can you see why a US VC may be reluctant?

The next time I cringe is when Founders say:

“We want to move to the US market – probably Silicon Valley.  We plan to send a few locals to start closing key accounts, hire an A-class team and really get our company going in North America!”

Seriously?  Most startups vastly under-estimate the time, cost and difficulty of entering the US market.  Here are just some of the challenges:

Hiring.  How will you hire A-class talent, when the A-players in the Valley have little interest to work for a foreign startup from a country they’ve never visited and for a CEO they know very little about?  There are thousands of local startups competing for the best talent, what makes you believe they will join yours?  Most importantly, A-players actually almost never interview for jobs; they are brought in by VCs or ‘networked-in’ by other A-players.

Sales culture.  Do you really understand how to sell in the US?  Most international startups do not.  They often confuse being fluent in English with being able to sell to Americans.  Selling in the US isn’t about being able to speak the language.  It’s about knowing how to create trusted relationships and build a trusted brand with customers.  Knowing how to find the right contact within a large organization and having someone in your network who can connect you.  Making that cold phone call and delivering the right message, tone and attitude.  And naturally, knowing when to banter about last night’s Niner’s game too.

(Note that I’m referring to startups that need to personally meet actual customers, channels and partners in the US.  If your business is completely web-based, you will likely be able to scale without having to relocate to the US).

If I were the Founder of a US startup and wanted to enter, say, the Finland market, I would not think to send a few Americans to Helsinki to try to build trusted customer relationships, hire the best possible talent and raise local venture capital.  It puzzles me why Finnish/Nordic/Singaporean startups think they can do this in the US.

Equity culture.  Do you understand equity culture in the US?  I find that most international startups don’t have a clue because when I look at their cap table, I see only the Founders owning equity.  Incredibly short sighted.  I rarely see the hard working, rank-and-file employees with equity.  It will be difficult if notimpossible to build an A-class team in the US with a ‘Founder’s-take-all’ attitude.  Not even the B-players will find your startup interesting.

As an aside, the US truly stands ahead in this attitude of sharing wealth among all employees, from the CxO down to the newly hired administrative assistant.  I think it is a key advantage of the US startup culture:  sharing the rewards of success widely, and in turn creating a healthy, vibrant and motivated ecosystem.

Network.  Do you have a strong network in the US?  Personal connections to your first 25 customers? Those who have these valuable connection receive a subtle but critical advantage.  Many Europeans have a difficult time understanding this because they cling to a belief that a good product will sell itself.  Beyond those great products that customers run to purchase/sign-up, (think: Dropbox, Facebook, Angry Birds, AirBnB, etc..), the vast majority will need to win through good customer, channel and partner relationships.

International Founders often make the assumption that the skills that made them successful in their smaller home markets will translate successfully to the much larger US market.  A subtle but important shift needs to occur when entering the US market.  If you don’t understand this, you can easily get lost in ‘startup translation’.

Some of the differences are quantitative: valuations, term sheets, compensation expectations, cost of working/living, and depth of business networks.  Others are more qualitative: the role of sales, negotiation styles, equity culture, the role of the Board & Advisors, credibility with the investor community, etc..

These are some of the most common ‘translation pain points’ I’ve seen international teams face when they relocate to the US:

Translation 1:  The market is much larger than you realize.  Although the US (313M) is smaller than the EU (505M), South America (387M) or Asia (Bn+), its seamlessness surprises most international entrepreneurs.  The US is a single, tightly integrated market bound by one set of laws, language, currency, culture and mindset.  This often throws off the European entrepreneur who is used to crossing borders, languages and cultures on an almost daily basis.  I worked in Europe for Cisco Systems for 6 years and witnessed, sometimes painfully, the significant diversity of each national culture and the friction this causes in reaching scale.  The US market is large and efficient, which is why one can often reach scale much faster than in Europe/South America/SE Asia.

Translation 2:  Raising venture capital is (much) more difficult than you realize.  The US VC market has more venture capital and does more deals than anywhere else in the world.  However international startups face more barriers than their US counterparts.  First, there is risk in investing in an unknown team, whose core operations are far from the VC’s home.  It is not just geographical distance, but cultural, operational and legal differences that make investors wary.  VCs prefer to invest near their home base, which offers a rich ecosystem of startups that are known, trusted, accountable and accessible.

Second, many startups – particularly those from Europe and Singapore – often receive their first investment rounds from their Government and this creates unique problems.  For starters, cap tables look odd.  Operating Agreements have strange and cumbersome rights and protective provisions that may be a deal-killer for later stage investors.  There are often bureaucratic reporting requirements.  The company Board still consists of only the Founders.  No one from the Government has stepped in to guide the startup, bring in a deep network of stakeholders or push the Founders (hard) to exceed their goals. Founding teams are weakened by this lack of guidance, accountability and healthy control structures.  Government venture capital feels good in small doses but is destructive in larger quantities.

Finally, many international startups are unprepared for the rigorous selection process of venture funding, particularly in Silicon Valley.  The US market is the most mature in the world.  Its VCs are deeply experienced – and its Startups benefit from this more mature ecosystem.  They know how to play the funding game better.  Many international startups come from countries where they are large players in a smaller market, and find it difficult to transition to being a smaller player in a very large ocean.

Translation 3:  The sales culture.  Earlier in this post I discussed some of the differences in sales culture. There is another subtle but key difference worth mentioning.  I’ve observed in many European startups a somewhat negative perception of the sales role, that ranges from tolerance to outright disrespect.

In general, you will find a very different attitude towards sales in the US.  Sales and Engineering are at the heart and soul of most US startups.  These guys are the rock stars.  When sales execs make over a $1M commission per year, the rest of the company cheers loudly.  Why?  Because when sales are pouring in, the people who make the real money are the equity holders and in the US, that is everyone.  Which is a good reason to cheer (see the next ‘Translation’ below).

You probably already love your engineers.  When you move to the US, learn to love your sales team, too.

Translation 4:  Equity culture.  The US startup community thrives on equity and international Founders need to be ready to allow employees to become owners.  Every employee!  Plan on an Employee Stock Ownership pool of 10-20% and be ready to negotiate single digit ownership percentages to critical, senior employees.  And don’t forget that if you start to offer the US employees stock, you will need to offer the same to your employees back home.  Do the math.  It will add up to significant dilution.  If you don’t want to offer equity to employees, perhaps you should not be in the US.

When international founders get nervous at diluting their ownership, I tell them that the ultimate goal of dilution is to create a stronger network of stakeholders who all share the common goal and motivation to increase shareholder value.   I remind them that 10% of a billion is much more interesting than 100% of a million.  Do the math.

Translation 5:  More expensive than you realize.  The US market is expensive. Salaries can appear astronomically high in markets such as Silicon Valley and New York City.  Even in cities like Austin, Boulder and Seattle, executive salaries are much higher than what you pay to equivalent person back home.

And there are other costs.  Office leases in prime areas are extraordinarily high.  San Francisco is a fantastic city to live – and also fantastically expensive.  A studio in SOMA is around $2,000/month; a two-bedroom apartment around $4,000.  Mountain View may be a tad less expensive. The cost of healthcare is spiraling relentlessly out of control.  Companies are generally expected to offer healthcare plans to employees, which adds to the cost structure.  And expect to spend a significant amount of time decoding the US healthcare system, because it is complex: how to buy insurance, the myriad of plan options available, rules on where to go for healthcare, etc.

Visas.  You will need a small army of lawyers to help ensure that you and your team can arrive legally and stay legally in the US.  Google “Sarbanes Oxley”.  When your company grows, you will be required to comply with this law that requires costly and detailed accounting, auditing and internal compliance reporting.

Our legal system is driven by an insane need to provide liability protection, which results in long, complex documents.  Finally our tax system is among the most complex in the world.

Fortunately the US has many accountants, tax experts and immigration lawyers who can help you through all these issues.  But it is still complicated!

Translation 6:  Networking.  This is perhaps the most difficult to describe.  In the US, we have a drive to constantly meet and mix and talk and openly share ideas.  It is in our genes and it is our lifeblood.  It is the casual banter over a business meeting coffee, which to a foreigner feels full of seemingly random talk.  It is the speculation about next week’s Giants game or chatting about which colleges our children are applying.  It is a distinctly different approach to work-life balance and a tendency to mix business and personal life much more than other cultures.  I wrote a longer piece that attempts to illustrate our networking culture.  See: http://generationsiliconvalley.com/2012/10/04/create-your-own-coupa/.

In closing, I see many international startups abroad that are indistinguishable from their US peers:  driven, customer-focused, networked and perfectly capable of integrating into the US market.  Equally, there are many international startups that do NOT need to enter the US market.  They will do just fine building a global brand from their home countries.

However I continue to meet startups that have a dream of ‘going to the US’.  It is likely the market size, the abundance of venture capital, the ‘cool’ factor of living in young, hip SOMA, the great weather in Silicon Valley – or some combination of the above.  But if this is your startup, be prepared to shift your expectations of what it will take to enter, gain grow and scale in the US.

Don’t get lost in translation in your journey of becoming a great, US-based startup.

Chris Vargas

Helsinki, Finland

 

Marc Andreessen: Not every startup should be a Lean Startup or embrace the pivot

by Eliza Kern DEC. 3, 2012 - 6:49 PM PDT

SUMMARY:The Lean Startup has become somewhat of a bible for Silicon Valley entrepreneurs, but famed investor Marc Andreessen notes that sometimes founders misappropriate the ideas or don’t apply them correctly, resulting in some common problems he outlined Monday in San Francisco.

The Lean Startup philosophy and Marc Andreessen are themselves two institutions in Silicon Valley, so when one weighs in on the other, it’s good to take note. The famed investor spoke Monday about his three pet peeves in investor pitches, most of which are related to entrepreneurs misappropriating or misusing the Lean Startup approach, an approach that encourages quick scaling to achieve success.

“I feel like we’ve discovered the theory of relativity,” Andreessen joked on the Lean Startup approach, noting seriously that he admires Eric Ries’ now-ubiquitous approach to building startups. Ries’ model, which encourages quick iteration and inexpensive prototyping before investing big money, has become somewhat of a guiding principle for many companies in Silicon Valley.

But Andreessen, speaking with Ries Monday at the Lean Startup conference in San Francisco, noted that there are three ways entrepreneurs can run astray:

Not all startups can be Lean Startups

Andreessen noted that as popular as the theory can be, there are still some areas where it can’t really apply.

“I would serve this as a challenge for the Lean Startup community. Especially the ones with the really audacious goals. Sometimes they start audacious because otherwise the product will never get to market. The Macintosh, that product had to exist in its entirety for people to wrap their heads around it,” he said, pointing to modern entrepreneurs like Elon Musk’s ventures as ones that can’t be done on a small scale at first. “You got to get the rocket into space.”

And Andreessen noted that investors should be careful not to take the theory so far as to reject companies that have ambitious aspirations.

“I don’t think the Lean Startup idea, as brilliant as it is, and as widely applicable as it is, should halt us from investing in these big ideas right out of the gate,” he said.

Don’t use the Lean Startup as an excuse to skimp on sales and marketing

While focusing on the product and getting it right before hiring on lots of employees is a good idea, Andreessen said he’s seen companies use it as an excuse not to care at all about sales and marketing, when in fact they do need to think about those when growing a business.

“We see Lean Startup methodology being used inappropriately as an excuse to not take sales and marketing seriously,” he said. “Founders tell us that all that matters is product, and sales and market will happen automatically. The ‘if they build it it will come,’” mantra, which he noted is not always an acceptable approach for those looking to grow.

And for those hoping their product will speak for itself and grow virally?

“I’m totally in favor of viral, but it’s really hard to find a real-world example for someone who gets the money without taking this stuff seriously,” he said.

Don’t develop a “fetish for failure”

Part of what makes Silicon Valley special — or especially insane — is a general willingness among the startup community to fail and fail often. But Andreessen noted that sometimes, founders take this too far, and use it as an excuse to not keep trying.

“The pivot. It used to be called, ‘the fuck-up.’ Taking the stigma out of failure is very exciting,” he said. “But we see founders who give up too quickly. It’s permission to give up very fast. Are they really going to do the heavy lifting over time?”

Andreessen said it’s certainly okay to fail, as long as those lessons from failure lead you down the path to success — not just another series of failures.

“We joke around the office that the worst is the fetish for failure,” he said. “You want to preserve the good of the idea when it comes to pivoting, but you don’t want people to be intentionally encouraged to fail. Maybe it’s time to add a bit more stigma. The entrepreneurs I admire, I admire the ones who pivot but I really admire the ones who have persisted.”

 

 

Foursquare Visualization: Mesmerizing Map Illustrates New York City, Tokyo Check-Ins

The Huffington Post  |  By Sara Gate Posted: 03/21/2013 11:44 am EDT  |  Updated: 04/01/2013 2:48 pm EDT

New York City and Tokyo are known for their hustle and bustle.

So to show the just how quick the pulses of these metropolises are, Foursquare created a visualization mapping a year's worth of check-in activity in each city. The result is a visual masterpiece.

The location-based social networking app posted the video on Vimeo Wednesday, explaining that each dot on the maps of New York City and Tokyo "represents a single check-in, while the straight lines link sequential check-ins." Various colors illustrate whether the check-in was at a residence, food establishment, night-life spot or other popular location category.

As The Next Web notes, Foursquare CEO Dennis Crowley displayed the mesmerizingtime-lapse maps at several recent tech events, including the F.ounders 2013 conference earlier this month.

While individual check-ins are not easily discernable from the data displayed in the visualization, the maps paint a picture of what type of activity the majority of Foursquare users are doing at any given time during an average day.

Earlier this year, Foursquare released an interactive world map that, unlike the new city visualizations, is searchable by location.

Watch the video (above) to see New York City and Tokyo check-ins for yourself.

 

8 Small Business Owners Who Put Their Growth Plans Into Action

Posted: 05/22/2013 8:42 am EDT  |  Updated: 05/24/2013 3:58 pm EDT

This post is by Goldman Sachs as part of their sponsorship of The Huffington Post's What Is Working: Small Businesses

Running a small business without a plan is a lot like driving without directions. It’s difficult to see the road ahead and even harder to know where to turn next. This is why a core foundation of the Goldman Sachs 10,000 Small Businesses program is to support participants through the creation of a growth plan – the place where a small business owner’s finances, products or services, and passion all intersect to help drive their business forward.

A key benefit to small business owners developing a growth plan is that it provides a framework to help identify the difference between a good idea and a genuine business opportunity — such as decisions around diversifying product lines, expanding into new markets, and more. The 10,000 Small Businesses program provides anopportunity evaluation guide to help participants develop their framework. This questionnaire is aimed to help already established small business owners jumpstart an analysis of their proposed activity, and help identify any areas that may need more consideration.

Below are eight ways small business owners who participated in the 10,000 Small Businesses program have used their growth plans to inform their business decisions.

Securing New Contracts 
Miguel Guajardo, El Camino Construction & Engineering Corp., CA

Miguel Guajardo used his growth plan to help him refine the core values of his company. “We’re not just a concrete company. We provide economic opportunities for our customers, our employees and our community,” he says. By focusing on where he wanted to drive his business, Miguel could pursue opportunities that aligned directly with his vision. As a result of this clearer direction, Miguel secured his first Public Works contract. This not only provided 48 housing units for medium- to low-income families, but also increased his sales by 80 percent.

Moving Into New Markets 
Maria Rios, Nation Waste, Inc., TX

In her business of commercial waste removal, Maria Rios doesn’t just see trash; she sees opportunity. Developing a growth plan allowed Maria to thoughtfully measure the benefits of growing her business through expansion into new markets. She has now purchased two additional acres of land with plans to expand her business from Houston into Austin, and has ambitions to go nationwide.

Putting Ideas Into Action
Rhys Powell, Red Rabbit, NY

Rhys Powell knew what he wanted to do; he wanted to serve healthy meals to schoolchildren in Harlem. However, executing such a vision requires a roadmap of how to put it into action. By creating a clear plan of how to expand his business and reach more students, he could better identify when to expand his employee base (from 13 to nearly 100 employees) and how to lead his team effectively. “I learned how to get people to execute on my ideas and my vision based on my enhanced communication,” he says.

Impacting More People
Jason Horne, XS Martial Arts Dojo, LA

“It gets you in the mindset to start working on the business and not in the business,” says Jason Horne about his growth plan. He wanted to offer his after-school martial arts program to more students in the community. His newly developed growth plan helped him take a step back to think about the best way to strategically expand his business. Jason focused on growing his after-school program and satellite programs, and now has over 150 students participating in martial arts and summer camps.

Adding New Products 
Rosalie Safier, National Van Equipment Company, NY

“As a small business owner, you get so bogged down with just staying alive, that you don’t always have the luxury to step back and strategize,” says Rosalie Safier, who since graduating from the 10,000 Small Businesses program has learned to constantly reinvent her 90-year old family business. Wanting to stay competitive, Rosalie’s growth plan focuses on how she can “always be growing.” As such, she has managed to expand her product base and maintain her dedication to being a green manufacturer.

Securing Capital For Expansion 
Brian Koester, Bark Bark Club, IL

Brian Koester and his business partner grew Bark Bark Club from a solo dog walking business to a complete doggy day care facility with over 25 employees. His growth plan included key financial metrics such as projected revenue, profit margins and capital requirements. This knowledge helped him secure funding to expand his product line and establish an online store. “To have the opportunity to flesh out my ideas and really look at them was a transformative experience that put us on the road to growth,” he says.

Expanding Into New Spaces 
Malene Barnett, Malene B. Custom Handmade Carpets, NY

Malene joined the 10,000 Small Businesses program to help her strategically grow her Brooklyn-based handmade carpet business. She used her growth plan to get a better understanding of her business’ financials and where she could expand or improve her business. Since finishing the program, Malene has hired more employees, began acquiring materials from alternative sources and is looking to expand her office space into Manhattan.

Adding New Business Lines
Carrie Hammer, Carrie Hammer Custom Apparel, NY

Carrie Hammer wanted to expand her business and needed a plan to help her do so. She used her growth plan to see how she could supplement her business with additional product lines and when she would need to hire new people. Since finishing the program, she has expanded her product line beyond dresses to shoes and other women’s apparel items. Additionally, she plans to hire five new employees. “I was looking for structure and to help fill the gaps in my skill set. But I got so much more,” she says.

 

What is "Entrepreneurship" in the 21st Century?

Faisal Hoque Entrepreneur; Author; Founder & CEO, BTM Corporation

Posted: 05/20/2013 5:28 pm

The buzz about entrepreneurship is everywhere nowadays -- from magazine covers to conferences, hotel lobbies to the White House, and of course, kitchen tables. The French word entrepreneur first appeared in the French dictionary in 1723 to describe a person who organizes and operates a business by taking a financial risk. Since then the word entrepreneur -- and the world -- has completely changed. Today, entrepreneurship is celebrated like never before and it is defined in so many ways -- social entrepreneurship, intra-entrepreneurship, knowledge entrepreneurship, micro-entrepreneurship -- you name it.

In 1975, Harvard professor Howard Stevenson defined entrepreneurship as "the pursuit of opportunity without regard to resources currently controlled." "Resources currently controlled" can be interpreted as limited resources. From that point of view, almost all of us have some level of entrepreneurial challenges.

I have been practicing entrepreneurship since I was 14 years old. I know all too well about the pursuit of opportunity without regard to resources. Author Steven Pressfield (author of the Legend of Bagger Vance) writes:

"We duel adversity every day, you and I. We get bloodied; we experience casualties -- and we have to get up and find a way to fight again. We might not be wearing body armor or carrying M4 carbines, but we know in our bones that the warrior virtues of patience, resolution, tenacity, selflessness, capacity to endure hardship, etc. serve us every day of our lives."

Steven's description of the warrior's virtues describes the practice of entrepreneurship quite well. At a fundamental level all entrepreneurs try to overcome adversity to pursue opportunity with limited resources.

As a devoted student and life long practitioner of entrepreneurship, this is what I have learned over the years:

Becoming an Entrepreneur

Most ventures fail. Most entrepreneurs make a lot less money than if they worked for someone else. The road to success is often long and lonely -- brutal hours; massive amounts of stress; and a huge amount of personal sacrifice. So, why would you want to become an entrepreneur?

To Survive: In my teens and early twenties, I became an entrepreneur (although I didn't know the word or the meaning of it) to simply survive. Around the globe, many people become entrepreneurs in order to survive. They have no job prospects, or little means to earn a living. Therefore, entrepreneurship for many is the only alternative.

To Pursue a Dream: In my mid-twenties, I caught the 'Silicon Valley' bug, and I pursued my dream to become a tech entrepreneur. Many entrepreneurs (in all industries) pursue entrepreneurship to fulfill their personal dreams. They have something to prove to the world and to themselves. They have the mental and intellectual capacity, the drive and the resourcefulness to invent and to create differentiating ventures.

To Make a Difference: In my mid-thirties, the idea of entrepreneurship completely changed for me. I wanted to make a difference, to do something that has a positive and long-lasting impact. Making a difference as an entrepreneur can be very rewarding -- as all great entrepreneurs will ubiquitously agree. However, making a real difference perhaps is also the hardest to thing to do and most challenging. It requires a different kind of mindset. It is not about just making money, or becoming famous, or inventing new things. In our changing world, the definition of entrepreneurship has evolved as the need to "make a difference" has never been greater. In my travels I have met 'entrepreneurs' from all walks of life -- in government, in academia, in NGOs, in corporations, in labs, on stage, and, yes, in ventures that are quietly working away to make a difference with very limited resources.

Entrepreneurial Ethos

The U.S. Army Warrior Ethos states:

• I will always place the mission first;
• I will never accept defeat;
• I will never quit; and
• I will never leave a fallen comrade.

I believe that this warrior ethos applies to an entrepreneur's personal and professional lives as well. It defines who we are and who we aspire to become. Driven by their core ethos, an entrepreneur must:

Find Resources: By making, maintaining and leveraging contacts, in both the short and long term, for mutual benefit, entrepreneurs find ways to exploit opportunities despite adversity.

Manage Risk: They accept and take responsibility for calculated risks. Great entrepreneurs are focused, learn from their mistakes, and move on without regrets. Their risk perhaps is far greater than an average person -- but they are hardly gamblers.

Create 'Wealth': The definition of wealth, capital, and value has forever changed. Money is no longer the only currency nor is the valuation of a company the only measure of wealth. Beyond financial value, entrepreneurs need to create 'wealth' with knowledge, sustainable assets, and social impact.

The Entrepreneurial Makeup

"The entrepreneur is then a complex combination of interacting factors." -- writes David Butler in his book Enterprise Planning and Development. He explains the makeup of an entrepreneur as follows:

Personality: in terms of possessing resilience, tenacity, opportunity spotting, and risk taking.

Attitude: having awareness of the importance of customer focus, the application of creativity and imagination, defined personal standards and values, the perception of enterprise as a positive activity.

Skills: such as the ability to network, to think strategically, to gain access to resources, business knowledge and acumen, interpersonal skills and people management capabilities.

Motivation: personal drive and ambition, the desire to make an impact, the need for achievement or self-satisfaction, a desire for status, to create and accumulate wealth, and social responsibility.

Butler continues, "the presence, combination and interaction of these factors will determine both the way in which an entrepreneur engages in enterprising activities, and ultimately the degree of success that will be achieved."

But at the end, there is no exact formula for entrepreneurship. It is unique for each individual. You cannot follow someone else's journey to success, either. That journey is uniquely yours and yours only.

Happy trails...

For more by Faisal Hoque, click here.

 

 

Growing a Small Business with 5 Essential Principles

Faisal Hoque Founder and CEO, BTM Corporation

Posted: 04/22/2013 12:05 pm

We tend to hear about people when they are successful but not when they are struggling. This creates a distorted perception that people succeed overnight.

Behind every "overnight success" is a story of a person or a team toiling away for years, with very few people except themselves and perhaps a few friends and partners supporting them. Consider the following two stories:

Overnight Delivery, Not so Overnight: On March 12th, 1973, founder of FedEx, Fred Smith secured just seven packages for the first night's run. He sent his salesmen back into the field, more than doubled his network to 25 cities, and re-launched the service a month later -- this time handling a grand total of 186 packages. Smith was so desperate for cash that he flew to Las Vegas to play the blackjack tables. He wired the27,000 he won back to FedEx. Needless to say, Smith's persistence paid off.

Rising from the Ashes: At the beginning of 2009, the creator of mega successful video game Angry Birds, Rovio (located in in Espoo, a 20-minute drive west of Helsinki) was close to bankruptcy. Angry Birds was Rovio's 52nd game. The 'overnight success' of Angry Birds took just eight years. And the founders of Rovio had been thinking about video games for long before that.

So many business founders come up with a good idea yet they are unable to scale their companies for growth. Through my own journey as an entrepreneur, I've learned that every business is unique, but there are certain key precepts to follow for success. The few that do succeed do so with unmatched focus, discipline, and unconventional thinking.

Although it takes more than just this to be a success in business, here are five essential principles that you can begin implementing right away as you begin your journey toward growing your business:

1. Timing is Everything
The timing of your product or service must be right in the marketplace. If the market isn't ready and you are way ahead of the market, then you must possess the drive and the willingness to sacrifice in order to make that product or service work.

You will need to choose to either wait for the market to catch up (requiring the resources to survive during that period, and accepting the risk of emerging competition), or you'll need to adjust your offering to something more palatable to the market's current readiness.

Smaller businesses have the advantage of being able to make choices and implement changes without the exhaustive process and conflicting points of view that slow down major corporations. You need to anticipate your market and customers' needs and constantly innovate to stay ahead. This requires leadership with agility, resilience, and a willingness to fail -- and to recognize that failure quickly enough to adapt and move forward.

2. Brand, Brand, Brand 
Today's economy requires business leaders to create positive memories for customers and partners, or customers will turn to a competitor in search of a better experience. If you want to create a scalable business, you have to understand just how crucial it is to build brand equity. The emotional attachment that links customers to your product, as opposed to any other, translates into sustainable growth. Here are some basic rules to connect, shape, influence, and lead with your brand:

• Choose your target audience - the surest road to product failure is to try to be all things to all people.
• Connect with the public - your objective is to make your audience feel an emotional attachment to your brand.
• Inspire and influence your audience - an inspirational brand message is far more influential than one that just highlights product feature functions.
• Reinforce the brand image within your company - make sure employees at every level of your organization work and behave in a way that reinforces your brand image.

3. Scale Your Sales
Creating a unique product and a unique brand isn't enough. It takes repeatable sales processes to create a scalable business. It is one thing to sign up a few customers; it is another thing entirely to identify, design, and implement repeatable sales and customer delivery processes. You've created a repeatable and scalable sales model when:

• You can add new hires at the same productivity level as yourself or your sales leader.
• You can increase the sources of your customer leads on a consistent basis.
• Your sales conversion rate and revenue can be consistently forecasted.
• Your cost to acquire a new customer is significantly less than the amount you can earn from that customer over time.
• Your customers get the right product in the right place at the right time.

A repeatable sales model builds the platform to scale. Like the search for product/market fit, it can take major experimentation/R&D to find a repeatable and scalable sales model.

4. Embrace Technology
Nearly two thirds, or 64%, of the recent Bank of America (BofA) Small Business Owner Survey respondents said they wish they took better advantage of technology innovations to help manage their business. If a small business can identify a genuine need, technology likely exists to fulfill that need both locally and globally. There are few barriers to entry in an age where anyone with wireless can cheaply and quickly access the enabling technologies needed to execute their business model. It comes down to creating the right operating blueprint that connects the dots between your business model and the application of accessible technologies.

5. De-Stress for Success
Most small business owners consider managing the ongoing success of their business to be twice as stressful as maintaining a healthy relationship with a spouse or partner, nearly three times as stressful as raising children and more than four times as stressful as managing their own personal finances, according to the same Bank of America report mentioned earlier. The survey indicates that small business owners routinely forgo physical fitness and other personal priorities to keep up with business demands. Thirty-eight percent of small business owners maintain full or part-time jobs while running their own business.

The stressors can be relentless. But if you're not happy, healthy and motivated, you can't create a business model that provides a positive market experience. You also set the tone for everyone who works with you. Nobody wants to do business with a grouchy, bitter and exhausted owner. Therefore, investing the time and effort to adequately take care of your physical and mental well-being will further increase your chances for long term success. Mental health is not just about going to the gym to let off steam. It's about achieving a state of mental calmness to see you though the relentless challenges - but that's another topic in itself!

For more by Faisal Hoque, click here.

 

Originate, Inc. and China Press Opportunity

Anderson has greatly helped Originate be more successful in its growth as a leading software development and venture organization.  Because of the quality and global perspective of the Anderson program, we have been able to select and employ/deploy extremely-qualified personnel (I.e. Sameer, Craig Finster, Matthew Pierce) into critical business roles at Originate that enable us to effectively build and harness a Chinese operation on behalf of our diverse client base.  This is certainly a competitive advantage, as building teams and developing high quality software within China has nuances and implicit 'rules' that you absolutely must embrace to be successful.  Our Anderson alumni are well-versed in these areas, and are passionate about maximizing our operations to accommodate the needs of our clients (whom we actually call partners, because of the deep relationships we build with them).

Beyond the maximization of our Chinese and U.S. operations, that same global knowledge is applied to how we innovate with our partners.  Originate's model is not to simply address a certain software need;  we bring to bear a wealth of business, product management and operational expertise for our partners, so that together we can drive the right level of strategic discussion  around the markets and solutions our partners focused on.  So again, it is absolutely critical that our team tap the practical international business management knowledge imparted through the Anderson MBA program.

Lastly, I would be remiss if I didn't also point out that Originate's partner base has been consistently augment by Anderson's global alumni network.  I anticipate that in the very short-term, Originate will be closely collaborating with Anderson alumni living in China and the rest of Asia.  I say that because I've seen the proven value of the Anderson/UCLA network as it expands worldwide.

  - Jeff Scheinrock, President & CFO of Originate, Inc.

LA Silicon Beach Startups In Tech & Film Spread To The Eastside

An interesting article about Silicon Beach and the influence it's having on the greater Los Angeles area.

http://www.huffingtonpost.com/2012/04/18/la-silicon-beach-tech-film-startups_n_1435944.html