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If you have aspirations to start your own business, watch the video as Ravikant discusses:

  • The three traits you need to look for in a partner
  • How important it is to be in Silicon Valley
  • How to get a meeting with an investor
  • Whether you should be public or private with your idea

Some excerpts that I love from the video:

3 Traits of a Successful Entrepreneur:

(i) Passionate (ii) Irrationally Optimistic (iii) Highly Committed

Best Advice Ever:

It’s the people, stupid

Find a great partner:

(i) High Intelligence (ii) High Energy (iii) High Integrity

Keep your ideas private or public?

Always public. That’s what separates the amateurs from the experienced.

Why most companies fail:

It all comes down to people problems. Interpersonal conflicts. Surprising, but ironic.

Show. Don’t tell. Be a doer, not a talker. (what have you built, how much have you accomplished with limited resources?)

Watch the video here.

I received my first landing page web design mockup this morning and words couldn’t describe how ecstatic I felt about it. My start up is slowly inching its way to reality and I can finally visualize it. I can almost smell it!! I couldn’t help but grin all day… this is how I know what ignites the fire in me, what creates that sparkle in my eye. This is what I call passion projects. It makes me whole and I now know this is what I’m destined to do. I am no longer an aspiring entrepreneur. I am an entrepreneur.

GRIN GRIN GRIN

p/s: If you can offer me advise and guidance on alpha/beta testing, please kindly reach out to me at http://www.deliciouslyhaute@gmail.com if you’d like to help! Thanks!!

Story of Alexa Von Tobel of LearnVest

Working on the side while at Morgan Stanley. Prototype with a few thousand dollars. Enrolled in HBS. Worked on for a year. Astia backed company. Dropped out of HBS but with support of 4 professors. Moved to NYC. Didn’t want to take money from friends and family. 85% women make decisions in household but no one is marketing to them. No one wants to read a book on personal finance. Janet Hanson and Circle Financial Group were Angel Investors. Got oversubscribed. $1.5 M committed. Prototype more refined. Selected by TechCrunch. Alexa only women presenting at TechCrunch conference. Nov 2009 opened website to women. Online for free to educate women to make personal finance (content, tools and community). Accel Venture Investors (who invested in facebook) just backed LearnVest.

On Fundraising: One of the hardest things to do – dark and scary moments. Learned from people who’ve done this before. Go after Goldman Sachs partners who were passionate about finance. Daily Candy partnership on personal finance 5 days a week (former CEO). Former CEO of Huffington Post worked with LearnVest. TD Ameritrade partnership to build out personal finance tools. Key – Find one source person or company who is an expert in a field and beg them to get behind you.

Spend nothing on marketing. The internet is free – use it.

On networking and knocking on the right doors: Your passion shines through – show it. Use your networks – alumni, 85 Broads, workplace, etc. Preservere. Never take no for an answer. 10 calls end up in 1 meeting. 10 meetings end up in a connection. Keep all contacts. It’s not an easy process. Everything’s a chaos. You will see progress at the end of the day. Everything’s a commitment. Make time for people who want to talk to you – people will remember that.

Revenue stream of LearnVest: Cliffnotes for personal finance. #1 Advertising (work with only brands we believe in). #2: Lead generation – Once someone learns about an IRA, you need to open an account somewhere – get users a better deal via partners.  Working on premium services offering, financial advisor, and personalized phone services to help women around the country make financial decisions, etc. 

Who to Trust? Forget about NDAs. Share the idea with people – you will get ideas from people and it will help you formulate your business around customer needs.

Legal fees: Lawyers are so expensive but make sure you get a good one. Convince them to work pro bono until the company gains traction or meets certain milestones.

On partnership: Did it alone as well. Started out with help from first cousin working at a Hedge Fund although not technically a co-founder.

Story of Claire Chambers of Journell

Biggest challenge in retail – it already exists. But it could be better. Angel investment the only way to go because no capital or revenues. Find people who believes in concept and invest in the long run. Started with colleagues network and friends in business world in NYC. When first started writing bplan, reached out to hundreds of people who may be interested in retail, finance, VC, etc. Shared why she was crazy about the idea and asked for their insight. Was introduced to other networks and worked her way through building relationships. Look forward to people with similar risk profiles and passion as investors.

Social media: Find people who have similar problems and want to share with others their problems and solutions.

On attorneys: Trademark work with logo and branding. Biggest cost is financing – to draft up legal agreements and negotiations. Third round financing now (paperwork almost the same so can leverage previous document). Impossible to operate without a good lawyer.

On partnership: Wished she had one. Difficult unless you meet the right person at the right time. Network to reach out to people with similar passions, goals, etc. At this stage, making senior hires out of necessity rather than partners.

Story of Wendy Tsai of Cellona Therapeutics

Focuses on cancer and neurology markets. Company is a research-stage company developing best-in-class targeted cancer drugs. Wendy is responsible for company and capital formation and strategic partnerships; and leverages a versatile background in corporate planning, sales, marketing and health policy.

Topics for today:

(i) How to form a great management team – really important for a start up. (ii) How to raise financing.

On financing: Approach advisors. How to market company prior to raising financing. Use of social networking tools. 99 Designs to design corporate logo – if you reach out to IR firms, it costs 1/10 now. It’s now much cheaper to hire someone to build branding and design of website.

On partnership: Find the right balance in terms of skills. Discuss equity and how you split the pie. Makes best sent to make value to divy up titles and roles early on. Reach out to Angel Investors such as AngelSoft and GoldenSeeds – something that was not available 10 years ago.

A great post by Chris Dixon:

A frequent question entrepreneurs have when they are just starting their company is:  how secretive should I be about my idea?  My answer:  you should talk about it to almost anyone who will listen.  This includes investors, entrepreneurs, people who work in similar areas, friends, people on the street, the bartender, etc.

There are lots of benefits to talking to people.  You’ll get suggestions for improvements.  You’ll discover flaws and hopefully correct them.   You’ll learn a lot more about the sector/industry.  You’ll learn about competitive products that exist or are being built.  You’ll gauge people’s excitement level for the product and for various features.  You’ll refine your sales and investor pitch.  You might even discover your idea is a bad idea and save yourself years of hitting your head against the wall.

In terms of the risk of someone stealing your idea, there are at best a handful of people in the world who might actually drop everything and copy your idea.

First of all, most people will probably think your idea is stupid.  This does not mean your idea is stupid.  In fact, if everyone loves your idea, I might be worried that it’s not forward thinking enough.

People at large related companies almost always think they have already built or are in the process of building all the good ideas – so your idea is either something they are already building (which is a good thing to discover early) or else they will dismiss it as a bad idea.  (I have a personal diligence rule that when speaking to people at large companies, the facts that they tell you are very useful but their opinions about startup ideas no more valuable than any other smart person’s opinions).

In terms of speaking to other entrepreneurs, the vast majority are already working on something and are highly unlikely to drop everything and copy you.  Even if they are in the idea generation phase, high integrity entrepreneurs wouldn’t copy your idea anyways.

VC’s will either not like your idea, or else like it and possibly want to fund you.  They vastly prefer funding an existing team than taking an idea and building a team.  The one risk is if they have entrepreneurs they are working with in a similar area (see next paragraph).  Most VCs have enough integrity to disclose this and let you decide how much detail to go into.

The handful of people in the world who might copy your idea are entrepreneurs just starting up with a very similar idea.  You can probably just explicitly avoid these people, although by talking to lots of people your ideas will likely seep through to them.

Even if your idea gets in the wrong hands, they will probably just get the high level “elevator pitch” which isn’t worth much anyways. Hopefully by that time you’ve developed the idea much further and in much greater detail – by talking to as many people as possible.

A note about NDAs:  1) almost no experienced entrepreneurs/VCs will sign them (in fact, you asking them too is widely considered a sign of inexperience), 2) It’s not clear they have any real value – are you really going to spend years suing someone who signed an NDA?  I’ve personally never heard of it happening.

I’m attending this webinar on April 21st at 1pm EST.

Business Model Innovation:
How to Take Advantage of Customer Trends

Date/Time: Wednesday, April 21, 10-11am PDT
Speaker: Gene Hoffman, Chairman and CEO, Vindicia

Gene HoffmanTracking the best way to offer digital products and services to your customer base requires complete attention. Every few months, another new business model or billing trend becomes the next “hot topic” and merchants have to scramble to keep up.

In this webinar, we will examine the pros and cons of several popular business models including freemium, microtransactions, subscriptions, and hybrid models, and give concrete best practices for each.

Thanks for Ray L for sending me this article about how to build a good team of engineers.

Reading his blog: For Startups, How Much Process Is Too Much? (for Harvard Business Review)

In the latest article for my series in HBR, I discuss the problem of how to figure out how much process startups should have. I often hear that what makes startups effective is their complete lack of process, but I don’t think this is correct. Process is not the same as bureaucracy. In fact, I believe process is a form of discipline. When done right, it can help startups accelerate even as they scale.

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