{"id":1139,"date":"2012-01-05T15:08:16","date_gmt":"2012-01-05T23:08:16","guid":{"rendered":"https:\/\/berkonomics.com\/?p=1139"},"modified":"2012-01-05T15:08:16","modified_gmt":"2012-01-05T23:08:16","slug":"entrepreneurs-do-it-your-way","status":"publish","type":"post","link":"https:\/\/berkonomics.com\/?p=1139","title":{"rendered":"Entrepreneurs: Do it your way."},"content":{"rendered":"

Yes, this is a takeoff from Frank Sinatra\u2019s song, where he did it his way and got away with it.\u00a0 You\u2019re building a company from your vision and a passion, and lots of people are going to tell you that you have this or that wrong, and that it just won\u2019t work.<\/span><\/span><\/p>\n

The truth is that very, very few early business plans survive in a form completely recognizable when looking back a few years.\u00a0 But even with massive changes, the vision and passion usually don\u2019t diminish in the process of morphing a business plan into a profitable business. <\/span><\/span><\/p>\n

Investors will invariably try to tell you that they know much more about the \u201chow to\u201d than you do, and that you should listen to them.\u00a0 And because you need their money, the temptation is to listen a bit too well, and take all of the advice thrown at you during your presentations and during due diligence and finally from the vantage point of a board seat.\u00a0 A good entrepreneur-turned-CEO listens, takes it all in, responds with reason, and stands up for what s\/he believes for the parts that matter most.\u00a0 It is good to listen.\u00a0 And it is better to assimilate the best suggestions into your cake as you bake it.\u00a0 <\/span><\/span><\/p>\n

[Email readers, continue here…]<\/em><\/span> But there is a limit, a point where your gut is more important than your ear.\u00a0 If you reach that point with suggestions from these people trying to help, think carefully about how to respond, whether with facts, instinct or support from others.\u00a0 Make your case for staying the course.\u00a0 Remember the same passion you demonstrated when you first attracted these well-meaning helpers.\u00a0 And push back.\u00a0 Some investors may drop out if you are in the pre-funding stage. But they are not the ones whose support you would later want.\u00a0 Some board members may show dismay.\u00a0 But most often, a good case made with passion wins the day and unites the group to move forward.<\/span><\/span><\/p>\n

I was chairman of an excellent company where I had led the deal, attracting angel investors through several rounds as the company grew to a breakeven with over four million dollars of gross revenues.\u00a0 We then sought and received a venture investment from a top tier Silicon Valley VC firm, whose partner came onto the board.\u00a0 After several months on the board, he spoke up. \u201cI don\u2019t like the niche we\u2019re in. It will never grow enough to make this a valuable company. Forget this niche and turn the battleship. Let\u2019s go after the Fortune 50.\u201d\u00a0 \u201cBut that\u2019s walking away from an industry where we are #2, growing nicely and already becoming profitable,\u201d the CEO responded.\u00a0 <\/span><\/span><\/p>\n

\u201cDon\u2019t worry. We\u2019ll be there in six months when you run out of money with your new R&D focus\u201d, the VC board member replied.\u00a0 The rest of the board, including myself, went along with this because, as I\u2019ve stated often, the last money in has the first say.<\/em><\/span><\/span><\/p>\n

Can you guess the end to the story?\u00a0 Six months later, the company ran out of cash, as planned, when ceasing to focus on the original niche. And the VC firm\u2019s partners voted not to fund the restarted venture.\u00a0 A good company, in a fine industry, ended up being dismantled just to repay the bank loan. No investors received anything. And the rest of us just shook our collective heads.\u00a0 No one stood up to the VC board member, even though all of us heard but ignored our respective gut responses pushing back, as we remained silent.<\/span><\/span><\/p>\n

It is years later, and the memory of that failure to push back remains fresh for me and surely for the rest of the former board members.\u00a0 As chairman, I should have pushed back.\u00a0 Certainly the CEO-founder had a duty to push back.\u00a0 Another VC from a smaller company should have pushed back.\u00a0 In retrospect, we were intimidated by the first tier VC, and half wanted to believe that he knew something we did not.<\/span><\/span><\/p>\n

He did not.\u00a0 Now, with that lesson firmly behind, I often remind members of a board when in a situation where someone on the board pushes to change the plan that the vision of the founder ignited us to bring us together.\u00a0 If we believe we have a better idea, we should convince the founder and the rest of the board that we have strong beliefs that dispute the current plan.\u00a0 But we should not be so loud as to drown out those other voices – you know – the ones from the gut and that of the founder\u2019s dream.<\/span><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

Yes, this is a takeoff from Frank Sinatra\u2019s song, where he did it his way and got away with it.\u00a0 You\u2019re building a company from your vision and a passion, and lots of people are going to tell you that … Continue reading →<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"om_disable_all_campaigns":false,"_exactmetrics_skip_tracking":false,"_exactmetrics_sitenote_active":false,"_exactmetrics_sitenote_note":"","_exactmetrics_sitenote_category":0,"_uf_show_specific_survey":0,"_uf_disable_surveys":false,"footnotes":""},"categories":[8,6,11,4],"tags":[],"class_list":["post-1139","post","type-post","status-publish","format-standard","hentry","category-depending-upon-others","category-finding-your-ideal-niche","category-growth","category-ignition-starting-up"],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/berkonomics.com\/index.php?rest_route=\/wp\/v2\/posts\/1139","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/berkonomics.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/berkonomics.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/berkonomics.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/berkonomics.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=1139"}],"version-history":[{"count":0,"href":"https:\/\/berkonomics.com\/index.php?rest_route=\/wp\/v2\/posts\/1139\/revisions"}],"wp:attachment":[{"href":"https:\/\/berkonomics.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=1139"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/berkonomics.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=1139"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/berkonomics.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=1139"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}