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Startup Smart P A ha n d b o o k fo r e n t re p re n e u r s I H S R U E N E R P E R T N E about the author Deirdre Sartorelli eirdre Sartorelli is D the director of the Angle Center for Entrepreneurship at Endicott College in Beverly, Mass- achusetts. Earlier she had her own consulting firm and was a senior executive in several high-technology companies. Sartorelli holds an undergraduate degree from Salem State University, a Master of Business Administration from Bentley University and a doctoral degree in business administration from California Coast University. She is enrolled in an innovation and entrepreneurship program at Stanford University. contents You can be Your customers: 1 4 an entrepreneur— getting, keeping for one idea and growing them or for a lifetime 46 | Accelerating 4 | Play to results for make your idea work your startup Building your Financing your 2 5 business block startup by block 56 | From 18 | Create a bootstrapping lasting foundation to angel chasing for your startup You as business Launch 3 6 owner, manager your dream and leader business 34 | Becoming the 64 | Planning entrepreneurial leader and networking for you are meant to be startup success Glossary | 74 Online resources | 76 h a n d b o o k o n e n t r e p r e n e u r s h i p Steve Jobs “wanted to Steve Jobs, right, and Steve Wozniak be kind of a master of a in 1976, the year company and make something they founded Apple. They reinvented in life…and I just wanted the personal computer to design computers with the introduction and be a great engineer.” of the Macintosh. Steve Wozniak Introduction Many people think that try to minimize those risks where possible. entrepreneurs are born, not We’ll help you figure out what is needed to made. Don’t believe it! You make your business last long-term, and how don’t have to be born with to ensure that your business runs smoothly. entrepreneurial spirit to start a successful We want you to be able to look back with business. You can acquire the knowledge pride on your creation months and years and skills to transform your idea from from now. a thought to a business that provides a One thing that is vitally important to livelihood for you and your family. your business is, naturally, the customer! By taking a journey with us in this book, While you may want to think that everyone you can develop a mindset and skills to will buy your product or service, you make your business idea a reality. You can can’t plan your business that way. It seems learn the essential skills and ingredients to counterintuitive, but the truth is, if you try launch and sustain your business. to sell to everyone, you will end up selling We’ll start by exploring what it means to no one. to be an entrepreneur. It may surprise you! Finally, we will help you plan for the Then we’ll help you refine and honestly future of your business. Remember, you evaluate your business idea. That can be aren’t in this alone: We will brainstorm hard work, but it will help separate your how you can find mentors, build your new business from those that fail. networking muscles, deal with failure and Starting a business, whether you are plan your business without necessarily making a product or providing a service, having a formal business plan. can be scary. Anyone who tells you Ready to ride the rocket ship that is otherwise probably has never done it. being an entrepreneur? Strap yourself in! We will work through how you can get comfortable with the idea of risk and then 33 h a n d b o o k o n e n t r e p r e n e u r s h i p “I gain inspiration from NKHENSANI NKOSI people, culture, history, Founder of Stoned spirituality, love, Cherrie, a South African fashion label. fantasy and magic.” Cape Town, South Africa You can be an 1 entrepreneur—for one idea or for a lifetime Chances are, if you are reading This may seem like a minor benefit, but this sentence, you have asked this is how real economic growth can yourself at some point, what happen in a small community. would it be like if I were my own Being an entrepreneur boss? What is it even like to think of yourself is different as an entrepreneur? It probably means feelings of excitement, Not all cultures appreciate entrepreneurism. independence and creativity—as well as What if, in your culture, it is not expected anxiety, self-doubt and worry. Here is a that you own and run a business? In secret: Every successful entrepreneur has some regions, cultural barriers and had all of those emotions at some point. biases prevent women from pursuing In fact, many startup owners will tell you, professional careers or going on their own. if it weren’t for self-doubt and worry, they The family can prevent a woman from never would have succeeded. These going into business in the belief that, as an emotions can be used to fuel drive, gener- entrepreneur, she will neglect her husband ate energy and inspire you to get up every and children. Even if unmarried, women morning eager to show the world what often lack collateral—a valuable thing you can do. pledged as security for repayment of a People start a business for a variety loan—and access to potential mentors. of reasons. Financial security and well- Addressing gender bias and removing being are certainly high on the list, but barriers to women’s entrepreneurship and your business can positively affect your professional development could boost neighbors, friends and even your com- economic development significantly, munity. When others see how your hard according to a 2015 International Monetary work, drive and inspiration have paid off, Fund study. This and other research it may inspire them to take similar chances. suggest that women entrepreneurs invest up to 90 percent of every dollar earned back 5 h a n d b o o k o n e n t r e p r e n e u r s h i p into their families to educate their children, You may indeed have a fabulous idea, improve family health and provide better but it still must be refined and tested against nutrition. The additional income produced reality. This chapter will introduce you to by a business strengthens a family’s some specific tools to help bring that idea financial security. These arguments may out of your imagination and into the hands help you persuade your family that your of potential customers. business will make a difference in their You may also have picked up this lives. The promise of eating and living book with no specific idea in mind for a better can help settle a debate about you business, yet you just know you are meant as a businesswoman. to run your own business. The “what” of the Being an entrepreneur can be lonely, business, meaning the product or service even in the best circumstances. Owning it sells to customers, is important, but just a business when your culture discourages as important is being your own boss and it because of who you are can add to that being in control of your own future. feeling. With the internet and mobile tech- Let’s begin with one essential fact that nology, however, it’s easier than ever to holds true whether you already have your reach out to others. business idea or not: You can seek out others who are in a A successful business similar predicament and together you can meets the needs of customers, create a network. Through those contacts, pure and simple. you can share experiences and ways to deal with biases and barriers, support You may have many different types of each other emotionally and possibly even customers; ultimately your job is to please pool your resources to help one another’s them. For example, you may have designed startups where no financing is available. an innovative new farm machine, but if it Also, a growing number of corporations doesn’t meet the needs or desires of a good and nongovernmental groups run inter- number of farmers, your business will not national programs focused on giving work, no matter how wonderful your idea is. potential female entrepreneurs the skills and support they need to overcome barriers and Although studies differ as to start a business. Seek them out and find out the number, the fact is that the how you can enroll. The more people you majority of all new businesses get “invested” in your success, the less lonely fail. With odds like that, you will be. You can pave the way and why would anyone start his/her own become a role model for others to follow. business? We will discuss that in this book. You will also learn how to put the odds for Ideas are everywhere! success more in your favor. You may already have a specific idea for Many businesses suffer because they a business. In this chapter, we will discover failed to act on this principle: You have why, no matter how great you think your to develop a product or service that idea is, you must be open to changing it, customers want or need. Thomas Edison, at least a little bit. the American inventor of the lightbulb and the phonograph, famously said, “Anything that won’t sell, I don’t want to invent.” What was true more than a century ago is still true today. 6 “Anything that Below: Generating a new idea requires won’t sell, tapping many inspirational sources I don’t want and exploring promising paths. to invent.” Thomas Edison h a n d b o o k o n e n t r e p r e n e u r s h i p Where do we find ideas then? It is not willing to buy from you, this is known as as difficult as you might think. You may market readiness. You will learn the skills come up with an idea from a variety to test market readiness later in this chapter. of sources: In some cases, you will not be creating a product or service that no one has ever ✏✏A job you have done in the past done before. This still could be a good or are doing now. business to launch. You will be selling to ✏✏School. Something in a class you’re customers who are already buying those taking now or took in the past. products and services elsewhere. These ✏✏Something you’re good at, like kinds of customers are known as an a special talent or pastime. existing market. ✏✏Your everyday experience. Do you ever notice an unmet need An existing product for a product or service? or service Let’s think about all the different products Making something new or services you use in the course of your This may be the simplest entrepreneurial day. Chances are that at some point you idea. Have you ever thought, “I wish I have thought, “If this product could only do had a time machine!” or “What if a farm this” or “If my local food market only did plow could use only sunlight for energy?” that.” These thoughts are important to a Making something new is probably the budding entrepreneur. Your idea makes one business area where you push the good business sense if you can do one or boundaries of “what if” the most. Obviously, more of these things: in our example here, time machines and e Build a product that has solar-powered plows don’t exist. In fact, more or better features. those ideas may sound silly to you. e Make something that does But the idea Thomas Edison had for everything an existing product the lightbulb probably sounded just as does but at a lower price. challenging. Don’t you think people found e Construct an item that lasts it hard to take his idea seriously at the longer and is more reliable. time he came up with it? Yet, look at how e Offer a product or service that is easier it changed the world. You may be read- for a customer to use or obtain. ing this book using light from this very invention. New businesses improve existing products every day. It may be your fresh Now, whether Edison was the first eyes that can see an existing product or person to think of the idea for service in a new light. Many entrepreneurs the lightbulb is hard to prove. He have had a lot of success improving on was, however, the first person to products and services that already exist. design one, build it and—most importantly— An existing market with market it successfully. unmet demand If your business idea is for something completely new, we call this an innovation. Demand is just another word for “requests What is telling you that customers will be from customers.” Unmet demand means willing to buy this new product or service that the current providers of goods and from you? When many customers are services cannot possibly provide enough 8