DoubleM Systems: Startup Services and Software : June 2011

Monday, June 20, 2011

Exit Early, Exit Often!

There is some compelling evidence that the traditional VC investing model is sub-optimal for today's marketplace. VCs tend to need much longer to get the high multiples they need for their portfolios, but there is a sweet spot for tech companies (probably not for bio-tech) funded solely by angel investors, where exits can be done in 1-3 years and be very profitable. Check out these videos by Basil Peters.

Early Exits Overview - part 1

Early Exits Overview - part 2

Early Exits Overview - part 3

Tuesday, June 14, 2011

How to raise a billionaire

There's an interesting story in the Wall Street Journal Online, with the catchy title "How to Raise an Entrepreneur" but I like to think of it as Entrepreneur = Billionaire. I suggest it would be very difficult to become a billionaire without being an entrepreneur along the way. For parents, it could be mighty useful to breed a billionaire. And nowadays, if it's going to happen, it will most likely happen sooner than later; that is, while the child is still relatively young, and therefore more likely to benefit from parental guidance. So, if you are thinking it could be to your benefit to have a B-kid, read the story!

Saturday, June 11, 2011

The Difference

Successful and unsuccessful people

do not vary greatly in their abilities.

They vary in their desires to reach their potential.

John Maxwell

Friday, June 10, 2011

People! Always Be Recruiting; Hire Slow, Fire Fast

Those who know me have heard me say it more than once. It's almost a mantra. "Always Be Recruiting" is just one of those basic truths, right up there with "Sales Solves All Problems". More on that one later, but for now, let's focus on "Always Be Recruiting".

Many entrepreneurs agonize over when to hire, and tend to delay it for as long as possible. And when they finally get around to admitting that they need that one more person, it's usually an emergency! This leads to hiring a sub-optimal fit for the job, the corporate culture, the team, and for the new team member.

Now consider the entrepreneur who knows to Always Be Recruiting... there is no emergency hiring situation because they have been nurturing that next key hire for some time and they know they will be the perfect fit for all involved.

For more on this topic, check out this excellent article: "In This Market You Grow By Recruiting, Not Hiring".

Here's another bit on hiring, which I agree with only 50%: "Hire Fast, Fire Fast". Again, those who know me have heard me say, many times: "Hire Slow, Fire Fast". The point of the story is that in a startup, you need to Hire Fast, but I disagree and point out that if you follow the advice to Always Be Recruiting, you should (almost) never find yourself in a position where you need to Hire Fast. Check out the story and see if you agree.

In any case, we do agree on Fire Fast. This is such an important thing that entrepreneurs seldom do. After all, who wants to fire someone? Maybe, with a little more training, or a verbal warning, or maybe when we get past our next milestone... Yeah, right, that's not going to make a frog into a prince. A frog is a frog. Get rid of them as soon as humanly possible. Keeping them around is perpetuating a bad decision, and convincing every other employee that you will accept mediocrity, or worse. One bad apple, etc... It pollutes the entire atmosphere.

It's better to fire them now, even if everyone else has to work harder, than it is to keep them around and spoil everyone else's attitude. And, you will feel a whole lot better as soon as you have done it. They will too! They know it's coming, they just don't know when, right? In fact, most "exit interviews" I have done were no surprise at all to the person exiting. So what are you waiting for? Fire someone today! Fridays are a perfect day to fire someone!