Book of the Week: The Art of the Start
30 Mar 2014
This week I read The Art of the Start by Guy Kawasaki, the original Apple evangelist. The book covers starting, positioning, pitching, writing a business plan, bootstrapping, recruiting, raising capital, partnering, branding, rain making and being a mensch. I liked the book a lot, but a lot has changed in the startup world in 10 years. Not that anything mentioned here is wrong, but it is now gospel is startup land. The ideas are more formalized now. It was a good read since it conveys information efficiently with no bullshit. Bootstrapping and Raising Capital
For a rough approximate of your valuation, circa 2004, you can also use Kawasaki’s Law of Premoney Valuation: For every full-time engineer, add $500,000. For every full-time MBA, subtract $250,000.
It is important to manage for cash flow and not profitability. Profitability can come later. In the early stages, you need to make money quickly and but it back into your business to grow it. When figuring out numbers, it is best to build a bottom-up forecast. It is easier to argue your case, when can say it takes X amount of resources to generate Y amount of revenue and how it will change as your company grows. 10/20/30 Rule
- 10 slides
- 20 minutes
- 30 point font
Guy is known for his 10/20/30 rule in making slides. 20 minutes of talking can turn into an hour long presentation, because an interested audience will ask questions. Investor Pitch
Experience is the name everyone gives to their mistakes - Oscar Wilde
- title slide
- problem
- solution
- business model
- underlying magic
- marketing and sales
- competition
- management team
- financial projects and key metrics
- current status, accomplishments to date, timeline, and use of funds
Applying the 10/20/30, this is the content that should go into an investor pitch. Magic is important. It is what makes your company special and sets it apart from others. Ninja coders are useful, but what you really need is a Wizard. Differentiation What is your value proposition? Here are some dimensions you can measure yourself against.
- cost
- east of use
- convenience
- industrial design
- reliability
- speed/performance
- range of selection
- customer service
- geographic location
If you don’t have a compelling value proposition, that is a problem. What is your company good at? It is better to be good at one thing, than crappy in a lot of things. Branding
I call it “Guy’s Golden Touch.” It’s not the vainglorious concept that whatever I touch turns to gold, but rather, simply and more humbly, “What is gold, Guy touches.”
Need to start with a good product. Every time a person interacts with your company it affects the brand. It is important to flatten the learning curve, so people can get immediate benefits. Once they’ve had a taste, they’ll be coming back from more. T-Shirt Design
- Don’t use white shirts
- Minimize text
- Use a big (sixty-point) font
- Spend a few bucks on design
- Make them in kid’s sizes
Company t-shirts are definitely a silicon valley thing. I’m glad the Barnacle t-shirts look awesome! Being a Mensch
- Get out.
- Ask good questions, then shut up.
- Follow up.
- Make it easy to get in touch.
- Unveil your passions.
- Read voraciously.
- Give favors.
- Return favors.
- Ask for the return of favors.
A lot of people do “networking” wrong. Being a decent human being while interacting with other people seems to work. Think Mr. Rogers. Personally, I need to work on asking for the return of favors. If you don’t do that, pressure to return the pressure build up. This makes people uncomfortable, which is bad. Let’s see if I can bring my people interaction to level mensch. Purchase The Art of the Start on Amazon.com or check it out from your local library.