Tag Archives: Wall Street Journal

Reality Check: Entrepreneurship is a Roller Coaster, Not a Cruise

I love this: So completely true. Vivek Wadhwa calls out the all-too-common talks by successful entrepreneurs who supposedly “sailed smoothly to success.” He corrects that in Entrepreneurship is a Roller Coaster, Not a Cruise, on the Wall Street Journal:

Vivek Wadhwa WSJ.com Entrepreneurship

Don’t be fooled. Entrepreneurship is never like that. You fail constantly, suffer setbacks at every turn, and live with the fear that you won’t be able to make payroll or that your product won’t work. You have to deal with disgruntled employees, unhappy customers and concerned investors. Even when you achieve success, you wake up the next morning and find that everything is falling apart—that even before you’ve gotten over the hangover you have another big headache.

This is an important reminder. It’s certainly my experience, and I’m glad to see Vivek taking this to the readers of the Wall Street Journal.

This should be obvious, but reminders are good.

With or Without Paper, the News Lives On. I hope.

As the newspaper business seems to die slowly, I console myself with the idea that journalism isn’t dying with it. The Huffington Post is booming. The New York Times will bring in about $350 million this year. The new iPad shows us how we can spread the paper in front of us with coffee and a newspaper in the morning. There’s hope. They capped the stupid oil spill overnight. Maybe they’ll cap the journalism spill too. Eventually.

I wish I knew who I’m quoting here, but I don’t. Somebody mentioned this quote to me recently:

I don’t care about newspapers. I do care about journalism.

iPad NewsWhat if news didn’t come on mashed-up trees? What if it came online instead? What if the iPad is the future of the daily newspaper? I can still sit with my coffee and page through the news. Sort of.

Can we survive with a few big online news organizations, but no newspapers?

In that case, who’s going to cover the city council meeting? Who’s going to spend months doing investigative reporting? And who’s going to pay the salaries of the people spending months on investigative reporting?

Meanwhile the Huffington Post, by far the most successful news business of the last half decade, is paying journalists full time incomes to develop the news. They have a handful of their own correspondents. That’s not the answer to those questions, but it is a start.

And I read this morning on TechCrunch how Ex-Google News, Bing Engineers Set Out To Build ‘Newspaper Of The Future’. Oh the irony: my stream of consciousness goes from TechCrunch to blogs to declining print advertising to slow death of newspapers; and I read about it in TechCrunch.

And, then, without hesitation, I signed up for both the apps mentioned, Apollo and Pulse, to go with my New York Times, Huffington Post, CNN, USA Today, Wall Street Journal, NPR, and SkyGrid. So it’s not like I won’t have news. And local news? That icon in the lower left of my iPad picture above is the Eugene Register Guard, which is my local newspaper. Now, as long as the local paper can figure out how to survive on its online revenues … sigh…

No, I’m not suggesting the iPad is the big answer or magic solution. It’s mostly just a good illustration. This is a long-term change of worldwide news landscape, and the iPad is significant here because this is how things are going to be. The iPad will have good competition soon enough. Let’s hope it does, and that the competition generates money for news organizations, so that the journalism survives.

It’s Not the Technology That Makes You Dumb. It’s What You Do With Your Time and Attention.

Yesterday I posted WSJ vs. NYTimes on How Dumb You Are or Aren’t on Huffington Post, tracking conflicting opinions on whether technology makes us all smarter or dumber. Smarter because it’s a lot of print, creativity, and intellectual work; dumber because of multitasking, distractions, shorter attention spans.

I find the debate interesting, but I go with the commenter to that post who summarized:

Seems to me that the Internet can do both. It probably depends on the person…

Amen to that. Don’t confuse tools with how they’re used. I think we all have that friend who’s petting the phone, reading email and doing instant messages while pretending to listen, and we’re all guilty of that sometimes (well, I am). But we also have that other friend who’s now writing seriously on their blog, taking up haiku via Twitter, and reading and writing like never before.

I grew up without all this. I was in my 30s before there was email, in my 40s before I got a cell phone, in my 50s when the dot-com world crashed, and in my 60s when I fell in love with Twitter. Back in that distant past, we still had endless choices of distractions and amusements vs. thinking and working. We still made choices. We still had to choose between staying late at the office, getting things done, or not. There were a lot of good business reasons not to take vacations. Today I find myself turning away from the computer at times, while talking on the phone, to focus on the conversation, without the IM interrupting me. And I find myself not doing that, wandering out of the conversation and looking at email, turning dumb.

The power of it all, these days, the instantaneous communication or whatever you want to call it, it’s just plain amazing. I love it. And yes, I misuse it all the time, just like you do.

But in the end, today as in the 1960s, what you value, who you are, and what and who you care about is a matter of how you spend your time. It’s a matter of focusing attention. You aim attention, or fail to; it doesn’t just happen.

And attention is time, and time is the scarcest resource.

(Image: HomeStudio/Shutterstock)

As if Business Plans Don’t Matter to Venture Capitalists! Jeez!

Isn’t this about as dumb as saying a screenplay doesn’t matter because the audience won’t read it:

Small businesses seeking financing from venture-capital firms need not worry about writing up a solid business plan, since it doesn’t sway funding decisions anyway, concludes a new study by researchers at the University of Maryland Robert H. Smith School of Business.

That, I’m afraid, is the lead of Business Plans Don’t Matter to Venture Capitalists, in the Wall Street Journal‘s Independent Street blog, yesterday. And I like that blog. Raymund Flandez should know better.

Think about it: what the researchers mean to say, I would hope for their sake, is that the document itself — the formatting, the presentation, the painstaking worry about where to break the page, and all of that — isn’t as important as some people think.

What they say there, as quoted by Flandez, is as if they don’t even know what a business plan is. He makes it seem like they think it’s a piece of paper, or a collection of pieces of paper. Certainly, by the time they’re on the faculty of a major business school, well, that’s got to be journalistic exaggeration, right? Here’s what a business plan really is (and this is me, not them, from my The Plan-As-You-Go Business Plan book):

So the plan is a collection of concepts in the middle, [the strategy] surrounded by specifics that have to be done. Around the core you put a collection of metrics to be measured and tracked (lots of them are sales, expenses, and the like, but not all), task assignments and responsibilities for different people, dates and deadlines, budgets, and so on. That’s your plan.

Seriously, do you think for even a minute that venture capitalists don’t care about companies having strategy, and metrics, and tracking, and tasks and responsibilities, and forecasts, and budgets? Are you kidding me? They may or may not read the business plan, but the entrepreneurs they fund can’t possibly do a decent presentation without knowing their plan. What happens when they get to the first question about how much they need, and why, and what they’re going to spend it on?

I’ve consulted to venture capitalists in due diligence, for years, my company had venture capital investment in it and bought it back, and lately I’m also an angel investor. And I can tell you this: they may not read the plans, but that’s because the plan is for you, the startup wanna-be, to know what you’re trying to do, and how much money you need, and why, and what you’re going to spend it on. You may only show the VCs the presentation, but if you don’t have a plan behind it, with your numbers straight, then they’ll know it. Forgive me for quoting myself again, but:

From that core plan, you spin off various outputs. You take the highest highlights of the plan and 60 seconds or so to explain it in an elevator speech. That’s one output. Or you write it all out carefully, and add supporting information about the market and the industry and the backgrounds of the management team, and it’s a plan document. Or you create a 20-minute 10-slide summary with PowerPoint or Keynote slides, and that’s a pitch presentation for potential investors. Or you create a cover letter or cover e-mail, about a page or so, along with a 5- to 10-page written summary, and that’s a summary memo. Or you do none of these, you simply keep that plan as a collection of bullet points, of picture financial projections, and a list of things to be done by whom and when and for how much money, and share it with your team. In that last case you don’t ever edit or polish it, or sweat the page headers and page footers or font size. You just use it to manage your company.

Notice that none of these outputs stands as something you do instead of the plan. And none of these outputs is really the plan. The plan exists at the core, and you create the outputs as needed.

Doesn’t that make a lot more sense? And shouldn’t the professional researchers ask the right questions? The Independent Street continues:

“Our results are most supportive of the premise that planning documents play, at best, a minor ceremonial role and do not inform venture capitalists,” wrote researchers in next month’s issue of Strategic Management Journal. “Therefore, we conclude that planning documents do not play an important role in VC opportunity screening.”

Doesn’t the screenplay analogy apply here exactly? As if the fact that the investors don’t read the plans means the entrepreneurs don’t need them. The plan isn’t for the investors, anyhow, its for the people running the company. It’s not a sales brochure, it’s a business plan. And I hope this is just a quick reading of the real research.

Authors of the study are quoted as saying “A business plan may be useful in helping entrepreneurs organize their thoughts and details.” What’s the phase for that? “No duh?” I hope they play that out better in the full report.

When they get into the details, it sounds like this research was done in the wrong way, at the wrong time:

Researchers sampled 718 funding requests from April 1999 to February 2002, at the height of the dot-com bubble and its immediate aftermath.

I think by now everybody knows that the dot-com boom was not the brightest moment of the venture capital industry. I don’t think many of them look back with pride at how well they picked investments between April 1999 and February of 2002. I’m pretty sure the phrase “back to fundamentals” has come up a lot since.

So I’m tired of this silly myth that having a business plan doesn’t matter if the investors don’t read it. The entrepreneurs need it and want it, whether the investors read the details or not. They expect the entrepreneurs to know what they need to do.  I hope the actual research is better than the write-up it got in Independent Street.