Category Archives: Knowledge @ CSUF Entrepreneurship

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

Startup Funding Option: Family and Friends

Jim Cooper is an expert on startup funding and at this talk he will go through some of the lesser known funding options for entrepreneurs.

Jim Cooper is an expert on startup funding

I am sitting here watching a great presentation by startup expert Jim Cooper, co-founder of Braid Theory, and he is talking about funding. It’s a complicated subject, or at least it can get that way, but I think one of the main complications is that people make it more complicated than it needs to be.

Many of the entrepreneurs that I talk with think that they should be looking for funding from an Angel group or VCs. Basically, to these entrepreneurs, that’s the only way they can think of to raise money for what they are doing. Starting a business is tough and oftentimes expensive so I understand why people, especially first time entrepreneurs, think that in order to raise funds they have to go through professional investors.

But that’s not the case. Not only is that not the case, the vast majority of startups do not get their first funds from professional investors. Ideas are great but they just don’t make for great investments all that frequently.

So, how do most startups get, well, started?

Self funding is one way. And raising funds from family and friends is another popular way for early stage companies. And the reason why is simple: you, your family, and your friends are the people most likely to believe in you. They are willing to take that chance… and it is a very big risk because most startups don’t end up making much, if any, money.

Jim did provide a couple of great tips for entrepreneurs who are approaching family and friends for investment funds:

  • Get it in writing!
    • Any agreement involving money and equity must be documented. Future investors will want to see who owns what and getting agreements written down will help to curtail any disagreements in the future.
  • If you don’t want your family and friends controlling your business sell them shares that do not include voting rights.
    • Selling equity that doesn’t come with voting rights is a normal thing in the startup world but most non-professional investors probably haven’t heard about this and might become offended if one of their family members or friends tries to sell them shares that don’t come with voting rights. Entrepreneurs should tread carefully here but the entrepreneur needs to be the leader and making the argument for why they need to maintain control of their business, especially during the earliest stages of a venture’s life.
  • Don’t raise more than $500,000 from family and friends
    • I think this is more a rule of thumb for Jim but I can see his reasoning here. Startups aren’t worth a lot in the beginning and $500,000 would probably represent a sizable chunk of the business’ equity. Sure, if an entrepreneur could convince a rich uncle to invest that amount of money and not require voting rights then the entrepreneur would still have control of his business but would probably only have a fraction of the equity.

Jim’s talk contained a lot more information than what I’ve been writing about. I hope that we will be able to publish some of the more important segments from Jim’s talk in the future as part of our Knowledge @ CSUF Entrepreneurship series. And to work with mentors like Jim and those that you can find at the CSUF Startup Incubator get in touch with us by sending us an email 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

Focus on your Character First – Knowledge @ CSUF Entrepreneurship

Jim Reichert has had thousands of business relationships throughout the years so it’s safe to say that he knows a thing or two about people. And he has some simple, straightforward advice for people who want to build stronger relationships, whether for business or otherwise.

To Jim, Dr. Stephen R Covey’s words on building character rather than working on creating a better personality really ring true. You can have the most engaging, gregarious personality in the world but that doesn’t really matter if you can’t follow through on what you say you will.

That’s why you have to focus on building your character. Even if you aren’t the life of the party if you do what you say you are going to do, be honest, trustworthy, and everything else that is the mark of someone with strong character, then you will be in a better position to accomplish the things you want to accomplish.

Why? Because people will come to rely on you. They know that  you are a trustworthy person. Someone with character that won’t just tell you what you want to hear.

This Knowledge @ CSUF Entrepreneurship clip was taken from a talk 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

 

#1 Rule for Better Communication at Work – Knowledge @ CSUF Entrepreneurship

How do you create a great atmosphere at work? It’s all about communication. If you cannot have productive conversations with your coworkers, subordinates, or superiors then how are you going to get things done?

Jim Reichert is an entrepreneurial executive with decades of experience in this area and he believes that the best way to promote good communication at work is by starting off on the right track. When you are hiring someone you will of course need to make sure that they have the skills and the experience to do the job they are being hired for but you also need to ascertain whether or not they are a fit culturally. That means they have to have values that align with the company.

And what happens when someone just doesn’t end up fitting well with the company’s culture? This is a tough situation and can become very emotional but the correct course of action would be to let that person go. It’s not that they are a bad person, per se, it’s just that they aren’t a fit for the company. In the long run this decision is better for the person that is being let go and better for the organization as well.

This Knowledge @ CSUF Entrepreneurship clip was taken from a talk 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