The other day, a friend asked me, “Why is it so damned hard to build a business that makes you a multi-millionaire before the age of fifty?”

“Good question," I responded, “And certainly one that I have thought about many, many times. Tell you what --- I’ll give you a list right off the top of my head and then you can ask me questions if you like.”

Here was the list I came up with:

• You must be perspicacious and able to recognize the market that exists as well as the market that is forming on the horizon. On top of this, you have to be able to recognize the technological and sociological trends that relate to both. Oftentimes, this isn’t a one-person job.


• You have to be rational. WAY too many people delude themselves into seeing opportunities that really aren’t there; or perhaps they are, but not nearly in the quantities required.


• You have to do the research. I can’t tell you how many times I have seen the company founders say, “Well, it has to be this way. Heck, I spent twenty years selling into an analogous market and the connections between that market and our new market are undeniable.”


• The business plan has to reflect reality. I have seen business plan after business plan that simply hit the “grow 7.5% per annum/quarter” function and damn the consequences. There is no consideration of the fact that people quit, people go back to school, and/or people simply lose interest. Yet all of these things do and will happen.


• You have to have a team. And I mean a TEAM. A team that is composed of people who think in terms of markets, who think in terms of what can be done, and who (at least a few of them) have “been to the mountain” a time or two. This team has to understand that it is going to take more than just 100% of their effort (and TIME) in order to get where you all want to go.


• This “sign-on” has to extend past the top one or two members of the team. I am always nervous when an entrepreneur fails to put his own skin into the game. Typically, this means mortgaging the house; which in turn requires the spouse’s signature. This is where the phrase “true believers” comes from. (By the way, when a spouse is involved - you just watch the company take off and fly … because there ain’t no incentive in the world like having your wife’s or husband’s house on the line!)


• You have to work on priorities and nothing but priorities. The first guy you catch sending an in-house e-mail should be hauled in front of a Kangaroo Court for public humiliation (you’d be surprised how well this solves this problem); same thing for formal, in-house meetings. I always pride myself on how long we can go without one. My personal record: 2.2 years.


• You have to create an environment whereby everybody is a salesman. All the time. Yes, you need product - but that’s what nights are for. Daytime and early evening hours are all about reaching decision-makers. Nothing else.


• Cash is King! You must preserve cash as if it is air and you are in a collapsed mine shaft with just hours of oxygen left. Trade, defer, and/or negotiate. Do anything but spend cash in a start-up. This is Law.


• Deal with problems right away. I have a “no-problem-can-fester-more-than-eight-hours” rule, and it must be adhered to. If there is a dispute between engineering and sales, it must be resolved. The same thing goes for clients and prospective clients. Log these issues onto a white-board and then start the countdown.



• Be very careful with publicity. I know that a lot of people might say, “But if I get my picture into TEQ Magazine, we’ll get customers. But will you? Methinks not --- at least this has been my experience. Remember, what you’re telling the world is, “Hey, we’re a start-up, making start-up mistakes without much money or depth. But we’d really like to have your business.”

  What you will get is competitors - and LOTS of ‘em. Problem is, some of them will be well heeled and have existing channels of distribution.



• Speaking of distribution, this is the one area that almost no start-ups pay attention to and yet it is one of the most important. You need to figure out how to get your products and services to your customers! (Then, keep this secret SECRET!)


• You must have an exit strategy. You can’t possibly know where you are headed until you all agree on where that is! This isn’t easy - but it is critical.



• Oh … one more thing: LUCK! For if you do all of the things I have mentioned above you still need to get some breaks.

  But the good news here is that it has been my personal experience (with eleven start-ups under my belt) that luck tends to favor the prepared and the hard working!

¡Buena Suerte!

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