startups

The Myths of Power

Putin and Kerry 2016

September 18, 2016: In startup financings there is usually much discussion about control. The founding group always wants to maintain voting control, and there is a valid argument for leaving enough room in the cap table to allow for subsequent higher value rounds. As I have frequently written, most professional investors will give you the psychological win of maintaining a voting majority but will protect themselves on the downside with the terms and conditions of a new class of stock such as a participating preferred.

The IRR of Simplicity

Bobby Jones ca 1921

September 5, 2016: Some recent successful exits in Austin have caught my eye for the relative simplicity of their business models. Patient IO is a case in point. AthenaHealth (NASDAQ: ATHN) acquired this young (2013) company to anchor a more individualized approach to patient care. ATHN was already a strategic investor, and Patient IO had participated in its More Disruption Please accelerator. So, no introductions were necessary.

Business Arguments You Cannot Win

baseball argument

August 21, 2016: Every startup leadership team has periodic arguments. There are always many gray areas in which one person’s guess may be as good as another’s. Monty Python’s sketch on this topic is one of my all-time favorites of theirs. It’s also the only bit of psychological rigor in this essay.

I rarely do lists in this forum, but this subject seems most appropriate for that, don’t you agree?

Finishing the Start

Take a swing!

August 14, 2016: I often describe myself as an expert at “starting the start.” Most of the students and budding entrepreneurs I advise have an idea and want to know literally how to convert that idea into a startup. My recommendations are applicable generically across a broad array of technology sectors, in part because I’ve personally had a wide variety of personal experience and in part because I’ve judged many thousands of entrants in startup competitions.

The Ears Have it

Eugen von Blass "Sharing the News" 1904

August 7, 2016: This past week I arranged a listening tour in Georgia related to my biomedical deal there. This was an opportunity for the founding doctor and me to talk with our lead investors, board members, healthcare partners, and others. The goal was to give candid updates about the business and seek counsel on recent modifications to our strategy. This was a successful trip, and it was a reminder of the importance of asking the right questions and being an attentive listener to the answers.

Know Your Enemy

Fending off the Huns

July 31, 2016: The political conventions of the last two weeks seem to have settled the election into a binary choice, unless by some miracle the Libertarian candidates can wedge themselves into the debates and capture a few votes in the Electoral College. Let’s assume for this essay that miracle will not happen.

The Forecast is Rosy

the crystal ball

July 24, 2016: Last week’s essay dealt with the fine art of pricing your startup product or service. Pricing is inextricably tied to your volume projections, so let’s now look into your crystal ball on that topic.

The most common mistake I see is estimating from the top down. You’ve created a must-have product for left-handers, and you know that approximately 10% of the US population is left-handed. So, there are 30M+ customers. Surely you can get 10% of that market and have 3M users, right? Or left? It looks easy.

The Master’s Hand

A master's violin

July 17, 2016: Several meetings this past week about pricing have made that the startup topic for this essay. I recall the Christian poem “The Touch of the Master’s Hand,” which was used often in speeches by John Imlay as a dramatic conclusion. He would bring on stage the prominent Atlanta Symphony violinist Martin Sauser to show the power of a musical instrument in the hands of such a master.

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