Entrepreneurial Lessons

Posted in: Blog,Events,Silicon Beach,Startups,Uncategorized
on June 11, 2012
» Tags: entrepreneur, Rustic Canyon, Santa Monica, Silicon Beach, startups, VC
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For those of you who were either too busy, too apathetic, too hip, or too cheap to attend the Vator Splash LA event last week, I’ve graciously put together some of the evening’s highlights:

Neil Hanch, Partner, Rustic Canyon, talked about LA’s tech advantages in his “State of the Union” speech. He believes that LA is an “entrepreneurial powerhouse” with clear strategic advantages such as digital media, e-commerce, gaming, direct marketing & clean tech.

There is a rising tide of social venture funding from both local investors, and Silicon Valley sources.
Explosive growth in incubators, accelerators, co-working spaces and an entire ecosystem to support startups.
Whether you love or hate the name “Silicon Beach,” it’s here to stay (good news for my company !).

Matt Coffin, President & Founder of LowerMyBills.com, presented a keynote about “Lessons Learned as an Entrepreneur & Investor.”

Raising money = dating + delivering

When you meet someone for the first time, nothing serious happens (except maybe a one-night stand!)
Start creating a rapport, and on the next date, let the investor know that you delivered A, B, and C.
Dating makes you more attractive so don’t be afraid to mention other offers.
You always need to be dating, delivering and raising money.

Winning or Bankruptcy, the 10% Rule

Small 10% movements in the operating levers of your business make the difference between success and failure.

3 R We Goods

Awful communication is one of the biggest problems in startups.
When hiring, always go over what the company does, how it does what it does, what is expected, etc.
In other words, don’t assume they know. Ask them if they understand what you are saying at least 3X.

Now & Not Now – the #1 opportunity

The “Now List” is what you need to be working on now.
The “Not Now List” is for things you may want to do in the future.
Creating and sticking to these lists prevents “half-assed meetings,” and other time wasters.

Where’s the Bathroom, I Mean What Business Are We In?

Need to maximize the use of board members by reminding them of the business you are in, and the current steps that were agreed upon.

You Must Succeed Even in the Face of Reality

Startups are hard, but you have to overcome and push through even in the bleakest moments.

More than 1 Revenue Stream = Failed Model

If you have > 1 revenue stream, it usually means that you have failed revenue streams that you didn’t have the guts to kill.
Commit to stop doing stuff that’s not working (like dating the same type of guy over and over and over…).

If You Think It’s Not Working, It Isn’t And…

This also relates to people – if they’re not working out, admit you made a mistake and fire them!

JP Morgan is Matt’s Hero – “How did I get rich? I sold too early.”

Scott Painter, Founder & CEO, TrueCar, gave a very honest and introspective keynote about the lessons he learned when his company went from profitable, to not profitable in 60 days (and how the last 6 months “sucked ass!”).

TrueCar is on a quest to revolutionize how cars are sold, and uses “big data” to level the playing field.
The automotive industry has a lot of vested stakeholders that are resistant to change (that’s putting it mildly!).
Car dealers were experiencing significant margin compression, and started pushing back.
Dealers rallied together, and boycotted TrueCar resulting in a loss of 50% dealers (6,000 to 3,000) in 60 days!
TrueCar lost almost $10 million in January, and Scott lost 38 lbs (but does not recommend this diet).
Scott admitted his mistakes, and his investors stuck by him.
Scott is changing the business model, changing the product, and changing how he relates to dealers.
He is working on restoring TrueCar’s brand essence of honesty and transparency (as well as his own reputation).

Pitches, Pitches and More Pitches

The pitch that really stood out for both entertainment value and “out-of-the-box” thinking was Blueseed, a proposed startup community of 1,000 entrepreneurs all living on a ship 12 miles off the San Francisco shoreline (international waters = no work visa needed).

I just hope they budgeted big bucks for insurance – – can you say “entrepreneur overboard!”