Category Archives: Knowledge @ CSUF Entrepreneurship

An Excellent Titan Fast Pitch

All the way back in 2014 John Chi was a finalist in the Titan Fast Pitch competition thanks to his great idea, for sure, but also for how excellent he was at pitching his idea. John knew his idea front to back and was able to take that knowledge and boil it down to its essence in a compelling way.

Any student that is looking to start their entrepreneurial journey and earn a part of some scholarships at the Titan Fast Pitch on October 21 should watch this great example from John Chi:

What did John do right?

He got to the value proposition, or the “why”, at the beginning. John introduces his concept with a question about what do you do when your body starts to wear out. It’s a powerful question and it immediately grabbed the audiences’ (and judges’) attention. Stem cells are the answer and he launches into a concise explanation of how his business, Synova Life Sciences, will use a person’s own stem cells to help them regenerate lost tissue and feel better.

Along the way during his rapid-fire delivery John talks about the market size, which is large, what his business model (how he will make money) is, and his key partners. It’s a masterful performance and John has taken that performance on the road and has been very successful at other competitions as well.

And John is still developing his concept. As you can imagine, stem cell therapy is not a business you start overnight, but John did get his start in part thanks to his experience at the Titan Fast Pitch.

That is the power of competitions like the Titan Fast Pitch. It helps you get started. (And if you’re worried that you can’t do as well as John did my advice would be to not be. Practicing your pitch will certainly help as will developing your idea. Just remember that this competition, as with everything in life, isn’t a cul-de-sac for your entrepreneurial aspirations. It’s merely a point along the line that hopefully ends with you creating something awesome!)

If you are interested in competing in the Titan Fast Pitch we couldn’t be happier. Make sure to sign up today and if you have any questions we are happy to answer them and help you start your life as an entrepreneur. Please send all questions to csufentrepreneurship@fullerton.edu and we will respond as soon as possible.


#CSUF

For more details on CSUF Entrepreneurship:
http://business.fullerton.edu/Center/Entrepreneurship/

For more details on how we help people become entrepreneurs:
http://business.fullerton.edu/Center/Entrepreneurship/Incubator

For more details on how CSUF Consulting can help businesses thrive:
http://business.fullerton.edu/Center/Entrepreneurship/Consulting

Attend one of our events for entrepreneurs or sign up for a free mentoring session:
http://bit.ly/CSUFEntrepreneurEvents

Knowledge @ CSUF Entrepreneurship video series:
http://bit.ly/csufknowledge

Forecasting for Entrepreneurs – How to Develop Assumptions

Joel Schwarzbart gave a great talk on forecasting for the CSUF Startup Incubator

Joel Schwarzbart gave a great talk on forecasting for the CSUF Startup Incubator

Joel Schwarzbart describes himself as half a CFO. What does that mean? Well, basically it means that Joel is a consultant who does many (if not most) of the financial activities that a full time CFO normally does but he does them for multiple clients.

Earlier this week, Joel gave a talk at the CSUF Startup Incubator in Placentia (by the way, we  bring in experts all the time to give talks and to have office hours, you can see all of our planned events by going to our Eventbrite page) about how to do forecasting if you are an entrepreneur working on a startup. While he talked at great length on a number of subjects that are important for forecasting there was one thing that I want to focus on here: Assumptions.

The accuracy of your forecast, which is the combination of all of your projections for your business, is in large part determined by the accuracy of your assumptions. Some things you have to assume:

  • How much you will spend on marketing efforts
  • The costs of the raw materials that go into making your products
  • Variable employee costs
  • Conversion rates on your ads
  • Your effective tax rates
  • Travel expenses
  • How many new customers you will bring online
  • And the list goes on and on and on….

Many of the entrepreneurs and students I work with do not give nearly enough consideration to their financial assumptions and yet it is from these assumptions that all forecasts come from. Fortunately, there are some easy ways to develop your financial assumptions and here are some of them:

Company Financial History

If your company has been around for a couple of years you will have to assume less than you would if your business is a startup. Simply use your actual history and financial statements to inform your assumptions. You will still have to take into consideration some other data points that I will cover presently.

Industry Norms

For our students, I always recommend them to look up the industry norm financial ratios in the library. In our library there is a database of financial ratios that is broken up by industry and by company size (there might be a huge difference in quick ratio for a small company versus a large company after all). With these kinds of industry and company-size financial ratios you can compare them to the financial ratios that you have developed for your pro forma (forecasted) financial documents; if the financial ratios you have aren’t even close to the industry norms then you might have an issue.

Besides financial ratios, there are many other kinds of industry norms that you can find out if you look hard enough or ask the right people about (industry magazines are usually a good source for this kind of information as are people who currently work in a given industry). For example, if you are opening a restaurant it would be a good idea to figure out your turnover rate (how many times a table is used over a period of time by a party).

Other Secondary Data

Besides industry norms, there are a lot of good sources of secondary data, which are nothing more than other sources of relevant information. For example, knowing the general strength of the economy is a good thing to know; knowing the strength of the economy for your area of operations is even better. Maybe the weather plays a part in the success of your business or maybe new regulations will play a more significant role in your business. There are many different fields to look into for secondary data.

(Yes, industry norms are a kind of secondary data but I think they’re important enough to have been covered separately.)

Observed Data

Now that I think of it, this might be the best kind of data that there is. If you directly observe something then that’s data that others do not have. For example, I remember reading about a startup a number of years back that was making some pretty good money taking pictures of department displays. Why? Competitors and companies that make items that go into department stores really wanted to know what was popular at that moment.

I have counseled students to get a head count on how many people went into a restaurant. Municipalities put out those strips on the road to get a count of how many vehicles pass by. Doing A/B (or multivariate) testing is another awesome source of observable data. Your company’s history is a form of observed data and, please, keep good metrics on your business; that will help you immensely.

So What?

I’m sure that there are other broad sources of data that I missed but I think you get the picture about assumptions. They are important because, like food, if you put good stuff in you will get good results and vice versa. And you need to have quality forecasts for your business so that you:

  • Make sure you have positive cash flow
  • Can plan to produce the right amount of product
  • Know where to spend money to get a good ROI on marketing
  • etc.

Forecasting is a fundamental part of any business and we were lucky to have Joel give a great talk on forecasts. But forecasting is just a part of growing a business. There are a lot of things to consider and to do it right you should have mentors to help guide you. You can find them on your own or you can work with mentors that you can find at CSUF Consulting or the CSUF Startup Incubator.

CSUF Consulting is great for clients that already have a business who are looking to improve in some fundamental way (i.e. marketing, operations, leadership, etc.). Each client is paired with a student team and a mentor who, as part of their classes, work with clients over the course of a semester to develop a comprehensive strategic plan that directly addresses some of the toughest issues or most promising opportunities that their client has.

The CSUF Startup Incubator, on the other hand, is built off of decades of entrepreneurial experience to help entrepreneurs go from concept to launch. At the beginning of a six month residency, entrepreneurs at the CSUF Startup Incubator sit down with Incubator staff and their dedicated startup coach to develop a startup plan that will position the entrepreneur for success. From that point on the team gets to work implementing that plan with the help of the entire CSUF Entrepreneurship community, which includes more than 500 subject matter experts who can be called upon to help. Oh, and residents at the CSUF Startup Incubator also get one of our CSUF Consulting teams attached to their startup to help them develop their startup plan by focusing their efforts on a critical part of the entrepreneur’s startup.

Give us a call today if you are interested in working with us, our number is (657) 278-3930. And to learn more about how to become a successful entrepreneur make sure to check out our Knowledge @ CSUF Entrepreneurship series where we have published posts and videos on topics that are important to entrepreneurs.


#CSUF

For more details on CSUF Entrepreneurship:
http://business.fullerton.edu/Center/Entrepreneurship/

For more details on how we help people become entrepreneurs:
http://business.fullerton.edu/Center/Entrepreneurship/Incubator

For more details on how CSUF Consulting can help businesses thrive:
http://business.fullerton.edu/Center/Entrepreneurship/Consulting

Attend one of our events for entrepreneurs or sign up for a free mentoring session:
http://bit.ly/CSUFEntrepreneurEvents

Knowledge @ CSUF Entrepreneurship video series:
http://bit.ly/CSUF_Knowledge

Building a Strong Culture from Startup to Mature Company

Dave Kinnear giving a talk on the importance of building a culture from startup to mature company for CSUF Entrepreneurship

Dave Kinnear giving a talk on the importance of building a culture from startup to mature company for CSUF Entrepreneurship

Last week, CSUF Entrepreneurship mentor and veteran executive coach for Vistage Dave Kinnear gave a great talk on the importance of culture for any organization and how to effectively build a great culture that will grow as your business grows. According to Dave, in order to accomplish this you first need to know how culture is built and the way to do this is to understand how people develop their world view.

For Dave, it all starts with fundamental organizing principles (FOPs), which is how people interpret reality. These are foundational principles that help to determine how you view everything.

From FOPs come values. Values are more disbursed than FOPs and are how we view the world. If you think that every person has inalienable rights then that is one of your values.

Next up are beliefs/habits. Beliefs/habits are our way of systematizing how we interact with the world. Instead of using pure logic to determine how to do things beliefs/habits help us to act quickly.

Action is the penultimate link in this chain and action is the manifestation of the heuristical responses as determined by our beliefs/habits. Actions taken are not always based off of complete information but without the foundational elements from above we couldn’t act.

From actions come results, which are simply how things end up once you take action. Depending on your FOPs, the world may be an ordered system akin to a clock but the complexity of that system is immeasurably complex and your results may not always align with that viewpoint. When that happens you will understandably start to question things.

The thing about this system is that the closer you get to FOPs the less change you will be willing to make. But if your results do not align with what you expected then you will start questioning things and reassess some things. The further up the line towards FOPs you get, the harder it is to change but you will be adjusting your beliefs/habits throughout your life.

In order to build a strong company culture you need to honestly assess what your world view is and create processes in your company that align with that. If you do it right then your culture will permeate every facet of your business and will help your business grow into the kind of entity that you want. It takes work but it can be done.

At least that was my interpretation of Dave’s thesis. Dave was more eloquent in explaining this in his talk and I hope to get some clips up from his talk for our Knowledge @ CSUF Entrepreneurship series soon.

And if you would like to meet with Dave to discuss culture and how to start your business you can reserve some time at his office hours that he does for CSUF Entrepreneurship. Office hours with Dave are a good way to get started on building your innovative concept and once you are ready to get serious about launching your business you should seriously consider becoming a resident at the CSUF Startup Incubator where we help entrepreneurs go from concept to launch.

Reading posts like this and attending talks by experts like Dave are part of the formula for success but there is significantly more value with working with experts like Dave and the people at the CSUF Startup Incubator.

Here are some thought-provoking quotes that Dave highlighted during his talk that I had to include in this post:

“Culture eats strategy for breakfast” is how Peter Drucker described culture and for Dave he sees culture as how organizations get things done.

“Values should underpin Vision, which dictates Mission, which determines Strategy, which surfaces Goals that frame Objectives, which in turn drives the Tactics that tell an organization what Resources, Infrastructure and Processes are needed to support a certainty of Execution” Mike Myatt.


#CSUF

For more details on CSUF Entrepreneurship:
http://business.fullerton.edu/Center/Entrepreneurship/

For more details on how we help people become entrepreneurs:
http://business.fullerton.edu/Center/Entrepreneurship/Incubator

For more details on how CSUF Consulting can help businesses thrive:
http://business.fullerton.edu/Center/Entrepreneurship/Consulting

Attend one of our events for entrepreneurs or sign up for a free mentoring session:
http://bit.ly/CSUFEntrepreneurEvents

Knowledge @ CSUF Entrepreneurship video series:
http://bit.ly/csufknowledge

Business as a Machine

Marc Pakbaz gives a talk on how to create a successful startup from the ground up for CSUF Entrepreneurship

Marc Pakbaz gives a talk on how to create a successful startup from the ground up for CSUF Entrepreneurship

Marc Pakbaz is an interesting guy and I like him. I’m going to miss a big portion of his history here but, in short, he is from Iran, lived in France (where he built and sold a business), and now lives in America (where he built and sold a business). He’s a teacher, consultant, serial entrepreneur, and a mentor for CSUF Entrepreneurship. In short, he’s a busy guy and we were ecstatic to have him give a talk for us last night at the CSUF Irvine campus.

At his talk, Marc, as is befitting of someone who has led the life he has, gave a fluent discourse on starting or growing a business from the ground up. For example, he started off talking about the normal litany of startup 101 (i.e. LLC or partnership, etc.) but then a big “X” went through all of those items on his PowerPoint. Those things are important but they shouldn’t monopolize your time as an entrepreneur.

Instead, your first step should be to define your business. This includes what kinds of activities you focus on, developing your clients/customers, and figuring out who your competition is and what they are up to. He goes on from there in great detail about what he focuses on when starting or growing a business but there is one thing in particular that he focused on that I think is really important: A business is a machine.

Specifically, Marc used images of gears to illustrate this concept. First, he showed a picture of a bunch of gears haphazardly thrown into a box. That won’t work, those gears can’t get anything done. Nothing is aligned and the gears are destined to rust away in that box unless something is done.

The next picture that Marc showed was of gears that are now aligned but they all aren’t connected. Some of the gears are connected but not all of them and this, if you’ve studied business, is setting up things in silos. Individual silos may work well but if they aren’t working well together, across the silos, then the business as a whole isn’t aligned. And when all the parts of a business aren’t working together towards the same goal then it won’t be able to accomplish as much as it could.

A business can accomplish a lot when all of the gears are connected and he showed a complicated setup of gears that all worked together. This may seem facile but if you look past the seeming simplicity of the imagery you will quickly realize creating a business so that it works like a machine is no easy matter.

Marc’s an engineer by training and he definitely thinks like one so now you understand why he used the imagery that he did. But the message conveyed by the images of the gears in various stages of connectivity is a vitally important message that every successful entrepreneur or business leader I know agrees with. Startups (and businesses and any other organization that you can think of) work best when all of its parts are working together towards a common goal.

Heck, Abraham Lincoln may have uttered the most well known line about the importance of an organization working together towards a common goal when he uttered “A house divided against itself cannot stand.”

So, who cares? (and) What can you do about this?

The thumbnail sketch of the meat of Marc’s talk is: Take the lean canvas model with its nine different categories (i.e. partners, value proposition, channels, revenue, etc.) and make sure that they all work together in harmony.

It’s a lot of work, but, as Marc expertly explained during his talk, it’s definitely worth it.

To learn more about entrepreneurship make sure to go through the Knowledge @ CSUF Entrepreneurship series of articles and videos that we have produced for the community. We are frequently adding content to this series (and I hope to add some videos from Marc’s talk to this series soon) and it’s a great way to learn but if you are ready to act I recommend working with our CSUF Consulting program if you have an existing business or the CSUF Startup Incubator if you have a business concept or are looking to grow a new part of an existing business. Our services have helped thousands of businesses develop strategic plans that have achieved great results. To find out more, please get in touch with us at csufentrepreneurship@fullerton.edu.


#CSUF

For more details on CSUF Entrepreneurship:
http://business.fullerton.edu/Center/Entrepreneurship/

For more details on how we help people become entrepreneurs:
http://business.fullerton.edu/Center/Entrepreneurship/Incubator

For more details on how CSUF Consulting can help businesses thrive:
http://business.fullerton.edu/Center/Entrepreneurship/Consulting

Attend one of our events for entrepreneurs or sign up for a free mentoring session:
http://bit.ly/CSUFEntrepreneurEvents

Knowledge @ CSUF Entrepreneurship video series:
http://bit.ly/csufknowledge

How to Sell your Startup to a Public Company

There is a great deal of difference between a private company and a public one. One big difference is the kind of regulatory regime a private company has to comply with is much less stringent and much less expensive than the one that public companies have to comply with after Sarbanes-Oxley.

So, what does this mean to a private company that is looking to potentially get acquired by a public company? Unless you have prepared your company then the process can get messy and when acquisitions get messy they become much more expensive.

But our good friend Pete DeAngelis has a better way. Having navigated these potentially rough waters Pete steered his private company into the safe harbor of a public company without much friction. By watching this video you will find out how Pete was able to accomplish this while getting top dollar for his private company.

About Pete DeAngelis: Pete DeAngelis has raised more than $7.5M for companies he has been an executive or board member for and he is also on the Investment Committee for the Cove Fund. In other words, when he talks about how to finance your business you should listen.

https://www.linkedin.com/in/petedeangelis/


#CSUF

For more details on CSUF Entrepreneurship:
http://business.fullerton.edu/Center/Entrepreneurship/

For more details on how we help people become entrepreneurs:
http://business.fullerton.edu/Center/Entrepreneurship/Incubator

For more details on how CSUF Consulting can help businesses thrive:
http://business.fullerton.edu/Center/Entrepreneurship/Consulting

Attend one of our events for entrepreneurs or sign up for a free mentoring session:
http://bit.ly/CSUFEntrepreneurEvents

Knowledge @ CSUF Entrepreneurship video series:
http://bit.ly/csufknowledge

Common Versus Preferred Stocks Crash Course for Entrepreneurs

What every entrepreneur needs to know about the different kinds of stock classes before they take on investors. Find out how common and preferred stock differ.

This talk was given by given by Peter DeAngelis at the CSUF Startup Incubator.


#CSUF

For more details on CSUF Entrepreneurship:
http://business.fullerton.edu/Center/Entrepreneurship/

For more details on how we help people become entrepreneurs:
http://business.fullerton.edu/Center/Entrepreneurship/Incubator

For more details on how CSUF Consulting can help businesses thrive:
http://business.fullerton.edu/Center/Entrepreneurship/Consulting

Attend one of our events for entrepreneurs or sign up for a free mentoring session:
http://bit.ly/CSUFEntrepreneurEvents

Knowledge @ CSUF Entrepreneurship video series:
http://bit.ly/csufknowledge

The “Three T’s” of Starting a Business

Travis Lindsay, Entrepreneur in Residence, Cal State Fullerton Center for Entrepreneurship and CSUF Startup Incubator

Travis Lindsay, Entrepreneur in Residence, Cal State Fullerton Center for Entrepreneurship and CSUF Startup Incubator

What is it, exactly, that separates successful entrepreneurs form those that are less successful?

It’s a loaded question and any honest answer comes replete with a healthy amount of caveats but it’s still a very valid question as well. And this was the question that Chris McCarthy, the Social Media Specialist for Mihaylo College, asked me. He was kind enough to videotape my answer, and it is below, but if you like reading more then here’s the short answer.

Based off of my experiences of working closely with entrepreneurs and business owners for years now is that three of the most important factors that determine an entrepreneurs success are:

  • Tenacity
  • Team
  • Timing

As Chris and I discussed, the importance of those three factors fluctuates depending on the situation but those factors keep on popping up in all of the examples I can think of.

Tenacity is pretty self explanatory. Either you have the drive or you don’t. And tenacity is different from passion. Passionate people can end up having a lot of tenacity as long as their amount of passion does not wane. But it inevitably does wane; it at least fluctuates. People who have the tenacity to work hard consistently have a higher chance of being successful entrepreneurs than those that do not have that quality.

Team is another one that some people, especially first time entrepreneurs, overlook. I’m not going to go into the psychology of why people overlook the importance a strong team can make but the best explanation I have ever heard about why teams are important goes something like this: If you, as the founder, can create $1,000,000 worth of value a year that is the most you will ever make if you continue on as the sole person in the company. As you add people into your company’s capacity for creating value increases as well; which will hopefully end in higher revenues and, fingers crossed, more profitability as well. Regretfully, I cannot remember who first made this argument to me but it has stuck with me since and it does make a whole lot of sense to me.

Timing is tricky and it’s unforgiving. If your timing is too early your market will never materialize; if you’re too late then somebody else will grab hold of the market and won’t want to give it up without a fight. There are things that you can do to time the market, and you should absolutely do things like researching potential markets, understanding who your competitors are and what substitutes for your product and service already exist, etc. And these are things that the CSUF Consulting program and the CSUF Startup Incubator works with clients to figure out. But you can never be sure that your timing will be perfect. At a certain point you have to trust in your plan and launch.

There’s obviously more to it than that for each of those “T’s” and there are many other factors that go into the success or failure of an entrepreneurial endeavor. In fact, if you have any you’d like to share, please do so in the comments. I’m interested in finding out what you think about this.


#CSUF

For more details on CSUF Entrepreneurship:
http://business.fullerton.edu/Center/Entrepreneurship/

For more details on how we help people become entrepreneurs:
http://business.fullerton.edu/Center/Entrepreneurship/Incubator

For more details on how CSUF Consulting can help businesses thrive:
http://business.fullerton.edu/Center/Entrepreneurship/Consulting

Attend one of our events for entrepreneurs or sign up for a free mentoring session:
http://bit.ly/CSUFEntrepreneurEvents

Knowledge @ CSUF Entrepreneurship video series:
http://bit.ly/csufknowledge