Tips for Entrepreneurs – Focus on Execution Intelligence

“Every time I’m asked to sign a nondisclosure agreement I see a huge red flag pop out that says Warning!”

Rob Adams has likely listened to as many new business ideas as anyone on the  planet, and one of his first tips for entrepreneurs is to never tell a potential investor you’ve got an original idea.

“Wake up,” he says, “Good ideas are not scarce, they are a dime a dozen.” If you don’t believe so, Adams suggests an online search of key words describing your idea. “You’ll find ten companies doing it, or thinking of doing it. You can drive yourself nuts searching for a unique idea, but that is not the point.”

The point, as he describes in his book A Good Hard Kick in the Ass, is execution intelligence, the ability to compose a team that can operationally execute a business plan with sustainability, flexibility and resilience, to dominate rather than define a market space.

Why Investors Hate the Nondisclosure

“Every time I’m asked to sign a nondisclosure agreement I see a huge red flag pop out that says Warning!” Adams asserts. “It screams out, ‘I’m stuck on my idea,’ it means you’ve spent too much energy obsessing about the idea and probably haven’t thought enough about the team, which is what the investor is really interested in. It implies you haven’t given much thought to your customers, or to the market.”

Getting to market first with a new idea doesn’t mean anything in Adams’ experience. “Netscape’s browser was out long before Microsoft Explorer,” he recalls. “Creating a new category does not necessarily spell success, but I can think of plenty of businesses that entered an existing category and proceeded to stomp all those roaches to pieces.”

Futurist Predicts Reciprocity Will Be Biggest Innovation Opportunity in History

“The fact that I say something like this is worth noting.”

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“Reciprocity is the currency of the cloud,” claims Bob Johansen, distinguished fellow at The Institute for the Future. “IBM is the best example of this. They practically give away the software and then sell consulting at high margins.”

Johansen is so impressed with reciprocity he calls it Bob’s Biggest Forecast, claiming it will drive more innovation than any other opportunity in history.

“I make ten year forecasts, so I’m usually understated,” he insists with a smile. “The fact that I say something like this is worth noting.”

He points to TEDx as testament of reciprocity’s power to add value while ceding control. Organizers of the popular TED conferences “give away” the TED talk concept to independently organized events such as TEDxBoston, and in return the original TED has become more elite and higher priced.

Voluntary Sharing

“You have to ask, can I protect this product anyway?” he says, using the Microsoft Kinect rollout as an example of what he calls Involuntary Reciprocity-Based Innovation, in which third party developers adapted the technology for purposes other than the original product intent.

Venture Labs Competition Proves Entrepreneurship Isn’t “Moot” on Campus

“Everyone knows that if you got into this competition you’ve got some legitimacy.”

Winners TNG Pharmaceuticals with Venture Labs Director Rob Adams

Global Venture Labs Investment Competition (formerly Moot Corp) began on May4 with a lead-in by innovation guru Bob Metcalfe. He related an encounter during his first week at The University of Texas at Austin with Michael Dell, founder and CEO of Dell.

“Michael attended UT but did not graduate before founding his company, and I asked him, ‘Did you enter into any student business competitions while you were here,’ and he replied, ‘No, but I wish I had.’ So…that is confusing data.”

Metcalfe addressed the irony of having an organized university competition based on something as seemingly unbounded as the entrepreneurial process.

“I’m convinced you can teach students how to start a company,” he concluded. “The innovation environment at the university includes research professors, graduating students, scaling entrepreneurs, venture capitalists, strategic partners and early adopters. I would actually like to see more professors launching startups, and perhaps I’ll work on that.”

What Questions Will an Investor Ask You? Moot Corp Part II

“You say there is a need, but you must describe why.”

Listen carefully to investment pitches and you’ll learn a few things about what investors want to hear from new venture teams. An ideal way to be a fly on the wall is to attend the Venture Labs Investment Competition (formerly Moot Corp) which completed global rounds last week at The University of Texas at Austin.

Last year I wrote about What Questions Will an Investor Ask You? Lessons from Texas Moot Corp. Here are six tips judges had for the venture teams this year:

1. Keep Your Numbers Straight

Even sophisticated investors have to digest the financials flashing on the screen, so be very precise about your ask. David Altounian of Motion Computing told one team, “I had a hard time understanding what you are asking for, you said $6 million at one point, but then it looked like $8 million later. I also need to understand the profit potential, the gross margins, give me a clear picture.”

2. Slow Down Your Pitch

The clock is running, but don’t let that force you into speed dump mode. You’ve practiced your pitch a zillion times, but it is all new to your audience. Lucas Braun of OnRamp recommended that teams “Slow down, force pauses in your presentation and allow investors to catch up with the technical presentation.” After one pitch, entrepreneur Ed Charrier complained, “It is still unclear to me how the product works.”

Online Entrepreneur Advocates for “One Day Business Plan”

“Your product doesn’t have to be perfect, it just needs to be good enough.”

Budding entrepreneurs at Texas Venture Week were told by the founder of ATailoredSuit.com that having a business plan is fine, “as long as you don’t spend more than a day on it.”

Tony Centeno is a former Marine, so you would expect him to move directly to his objective without unnecessary embellishment. Addressing a group of entrepreneurs and investors in Austin, he outlined his approach to business startup, lessons learned as he moved from Marine to MBA and finally, internet retailer.

The keyword of the day was action.

“Stop thinking about things with that 20-pound brain of yours,” he said. “Instead, you need to use your hands, your arms, your legs. Seriously, just take action. Sometimes we are just scared to succeed.”

Centeno markets custom-made men’s suits exclusively online. A strange occupation, it would seem, for a man who grew up with virtually no fashion experience. “Growing up, shorts and a Cowboys t-shirt was all I needed.”