The Exit Strategy

For most young entrepreneurs, the focus is all about the business.  You've built your startup around an idea or product that you are passionate about and very protective of.  Sometimes this passion can get in the way of the real reason why most people become entrepreneurs: to make a profit.

Since moving to Atlanta, I've began to attend more and more seminars.  At my most recent seminar they were talking about the components of a great Executive Summary.  One of the things the VC's putting on the seminar focused on was the exit strategy.  It then occurred to me that the exit strategy is almost as important as the entrance strategy.  Sure, there are a lot more details that go into getting a startup off the ground, but once that happens shouldn't your end goal be to sell that business at the highest possible value?

It depends.  Some businesses are built to run in the family.  If you are in the consumer brands industry or a trade, this may be the case.  If you are in the tech industry or one related to tech, you might just be waiting for it to mature for 3-10 years and look to sell it.

I've noticed a distinct difference in the psychology behind different industries of startups.  If I focus on only consumer brands/products and technology, starting a technology company is like trading in the stock market.  Yes, you think it will do well and you have done your research, but your end goal is simply to sell it at a higher value.  Starting a company in consumer products is like investing in a 401k.  It is much more calculated.  You may move different funds around to invest more in certain areas, but the focus is how it will impact you and your life later on.  There is a lot more work involved, but in the end the possibility of a much higher return.

In the end, as entrepreneurs it all comes down to the money.  I've found it good for myself to be diverse.  I started out being focused with consumer brands/products but am moving towards technology.  There are so many possible niches to get involved in, it's really about finding the niche that you can be very successful in.  There is definitely a niche for everyone.

As an update, I'm waiting to hear back about the venue for the first meetup in August.  The speaker has been chosen and all of the details will be announced when they are finalized.  As always, thanks for the support and keep telling all of the young entrepreneurs in Atlanta about this group!

Social Media, the New "Consumer Reports"

With the Netflix price hikes yesterday, many consumers were outraged and turned to their social media accounts to tell others how upset they were.  Not only was Dear Netflix a national trending topic on Twitter yesterday, but feelings about the hike were expressed in just about every other social media outlet you can imagine.

It was incredible watching my TL yesterday as the Netflix tweets kept pouring in.  Consumers today have more power than they ever have in history.  They are able to give immediate, explicit feedback to any company, brand, or product that uses a social media account.  The great part (for consumers) is that giving our feedback and seeing the feedback of our peers is easier than ever.

Google may have taken this concept to the greatest extreme with the addition of the +1 feature.  Consumers are now able to +1 ANYTHING on the internet, a symbol of their approval.

What this means for companies, brands, products, and especially entrepreneurs with new startups?  Be on top of your game.  It is easier than ever to criticize services.  In a matter of seconds, thousands of people can hear about a bad experience or product across multiple social media outlets.  This is ultimately a great thing for consumers and should create the next level of great products and services.  On the business side, we just have to do everything right.  And that's the way it's supposed to be.

There has been a lot of support for this group and the event details for the first meetup in August should be released later this week.  Stay posted and tell your friends!

Naming Your Startup: Broad Market

Coming up with a name for a business is not always an easy task.  There are many factors that go into a good name.  Will the name relate to you, your family, the technology behind the company, the location of the company, the size of the company, the target market, or even the product itself?  There are many things to think about when trying to decide what a good name will be.

I guess first it would be a good idea to define what a "good" name is.  A "good" name is one that is simple enough to stick in your head after the first time hearing it, but complex enough to make you think about the meaning.  Think about some of the most household company or brand names in America: Wal-Mart, Apple, Facebook, Delta, Starbucks.  All of these companies have a broad target market.  They have either used short, one syllable words or a compound, two syllable word.  This makes it easier for consumers to remember the name.

A "good" name also relates to the target market.  For instance, Facebook was named after the "face books" (online directories with pictures of students) from the various dorms at Harvard when Zuckerberg was a student.  This automatically tied his market, which at the time was only Harvard students, to his product.  

Wal-Mart (short for Walton's Mart) was originally named after the founder, Sam Walton and was later shortened for easier communication.  Using an established family name on the national scale does the same as on a small town scale.  Credibility is key.  Attaching a family name gives most companies (and their employees/consumers) a small town feel, a sense of pride, and a strong trust.  When someone is willing to put their family name on something it often means high quality service and products.

Using a location or region in your company name ties your market to that location or region.  Don't name a national automobile parts store "Atlanta Auto Parts" (for obvious reasons).  At the same time, if you are looking for a smaller state level market then a name with the region in it can be a great idea.  A perfect example of this is Southern Company.  Southern Company is an energy company that powers many homes and businesses in the southeastern United States.  It has two main brands within itself, which are Alabama Power and Georgia Power.  If you are a resident of either of these two states, you most likely get your power from the Southern Company.  And who better?  I just moved to Georgia and I can say that Georgia Power is the only power company that I know in Atlanta.  I'm sure that there are others, but with a name like that it really evokes confidence.

Stay tuned for the next post: "Naming Your Startup: Niche Market"

Check out the newly updated website.  There is a now a Follow and Like button on the Home page and also a link to this blog!  

atlyoungentrepreneurs.weebly.com

5 Factors of Great Leadership

Leaders can be spotted every day and are often all around us.  Having strong leadership skills is one of the things that nearly every employer looks for in an employee.  It is also something that venture capitalists pick up on very quickly.  The following are the 5 main factors that go into being a great leader.  

1. Confidence is one of the most important qualities to have as a young business person in general.  Note the difference between confidence and cockiness.  Confidence means you have the skill set to back it up. Master certain aspects of business/life and be fully confident in your skills.  Nobody wants to follow a leader who is unsure of their decisions or abilities.
2. Humility is almost as important as confidence.  As a leader it is often crucial for the success of the team to be humble and accept that some team members will be better suited for certain tasks.  As an entrepreneur it is often difficult to put the weight of the team's success on someone other than yourself, but it's always better to use a CS PhD to develop the program than try to teach yourself and fail.
3. Trust can sometimes be an issue due to critical information being shared among the team.  Although it can be tough to trust new team members to follow through on deadlines it is important to put as much trust as possible in those around you.  Displaying your trust for your team members is one of the easiest ways to earn their respect.  Nobody wants to work for someone who always guards information or someone who doesn't trust that you know what you're doing.
4. Communication is crucial in anything that you do, but leaders must be excellent communicators.  Leaders are often responsible to communicate ideas to different types of people.  You may be given a deadline or task to communicate to your team, you may be communicating your needs to a B2B company halfway across the world, or you may be communicating your startup pitch to an executive on an elevator.  In any matter, delivery is the key.  It is important to find a healthy balance between the amount of information and the length of time that it takes to communicate the information.  While working with another company it may be a good idea to spend 30 minutes writing a detailed message so that there are no errors or misinterpretations.  While pitching your idea in an elevator stick to the opportunity for the executive and be sure the first sentence out of your mouth has an introduction, why your startup would benefit them, and a way for them to contact you (preferably a business card).
5. Knowledge is the final factor of great leadership.  You can have confidence, humility, trust, and be an expert communicator, but if you don't have the knowledge to lead your team in the right direction then what's the point?  Leaders must often evaluate a situation and find the most efficient way to solve the problem in a matter of minutes.  Knowledge is a great foundation for problem solving.  Entrepreneurs are often wired to think outside of the box, so this will come naturally for most entrepreneurs.  

Take a look around during this next week.  Look at the leaders in your life.  Evaluate how effectively they lead.  See what areas they need work in.  Chances are that those areas are related to the 5 factors of great leadership listed above.

Keep reading, following, liking, and plussing.  

BPL

P.S. Atl Young Entrepreneurs meetup coming in August!  Spread the word.  Working out the details in the next 2 weeks.

The Dream: Atl Young Entrepreneurs

Since this is such a new group I thought it would be good to lay out the goals I have for it.  Most of you already know that Atl Young Entrepreneurs is a networking and meetup group for the many young entrepreneurs of Atlanta.  There are more than you think.

My vision for this group is to make it THE meetup to go to each month for young professionals.  I want to have at least one speaker at each meetup, too.  These will include: venture capitalists, specialists in certain niches of business, successful entrepreneurs, failed entrepreneurs, as well as others.  Yes, I want to have failed entrepreneurs speak.  I've always been a firm believer that mistakes and failure aren't always bad.  They are learning experiences and can be used to show others what not to do.

I'd also like to get involved with the entrepreneurship and business programs at UGA, Georgia Tech, and Georgia State.  I think it will be important for these students to network while still in school so that they aren't just out there on their own after they graduate.  I haven't looked into UGA or Georgia State too much yet, but I know Georgia Tech has a successful incubator program.  It would be great to have professors involved in this program to come speak.

I really just want this to be a nice, well rounded group of young people with lots of ambition.  It will be good to learn from speakers, but I want us to be able to learn from each other, too.  Obviously this group is only a few days old, but if anyone has any connections or would like to get involved with this group then shoot me an e-mail at AtlYoungEntrepreneurs@gmail.com.

BPL