2010 Wrap-up: Lessons from My First Year of Entrepreneurship

As a first-time entrepreneur, I have made lots of mistakes.

Hence, I hope I can share my lessons learnt here to help those aspiring entrepreneurs avoid the mistakes I have made, and also to celebrate that SilkStart has ended 2010 with quite a bit of cash in our bank.  It’s been an awesome year!

About being the Founder and CEO

Being a successful founder and CEO means you have to be good at just one thing: execution.

When I first started, I didn’t know what “execution” means  simply because I didn’t know what to execute.  Thanks to my advisors and investors, I have learned the following critical numbers for a B2B company:

  • What do you need to do to get your first 20 customers in a month?
  • What do you need to do to get $10K of revenue per month in 3 months?
  • What do you need to do to get $100K of revenue per month in 8-12 months?

One mistake I made during the early days was that I tried to execute on the following targets:

  • What do I need to do to raise my first $100K in less than a month?
  • What do I need to do to raise my first $1M in 6 months?

Then I realized that I am not running a fundraising campaign for the Daniel Chu charity, but I am running a business for God sake!!  So, my goals should be about how to make money from getting more and more customers!  Fortunately, I was able to turnaround from that crazy thinking, so I hope you don’t make the same mistake as I did.

Most importantly, I have, and many other successful entrepreneurs, such as Bill Gates, have proven that you don’t need to have a product to close a deal, so don’t make that an excuse to not go out there and start selling.

Suggested Reading

About People and Team

As my great mentor Pankaj said, “Daniel, you gotta make an effort to only work with A+ people.”  And I have to say that during my early days, I didn’t stick to that principle all the time because sometimes, I’d get someone on board just because we need someone to fill the position.  Having A+ people on board and being able to build a strong team with them are critically important.

An A+ person, besides being competent at what he/she does, has, in my point of view, the following values:

  • Do whatever it takes to deliver as promised
  • Always go for the extra mile to WOW the customers and other stakeholder
  • Put the group’s good before his/her own good
  • Take initiatives, always look for ways to improve the product, the team, or the customer experience
  • Resilience: someone who can endure drastic change and bad news without reacting destructively

I believe these values are very hard to be developed in a short period of time.  So going forward, I will not hire someone who hasn’t been living and breathing these values because we simply don’t have that much time to spend on developing these values for a new hire.

In addition, I think working together at an office regularly is very important.  Again, I hugely discounted it during the early days because we didn’t have enough money to get an office, but now I really regretted it — we have lost some great people because of it.

Despite the mistakes I’ve made about team building and people, today I am still surrounded by great people, who are 100x smarter than me, and who live and breath those values — I guess I am just lucky that way.

Suggested Reading:

About Money & Pivoting

I have become a strong believer for the theory that entrepreneurs need to go through severe poverty before they can succeed, and I mean it.

When I was at TELUS, the company paid me well.  Hence, I started to lose the sense of value for money — I didn’t have to worry about making money, and money would just show up every month — that was pretty easy.

However, after I quit TELUS and live through severe poverty during the early days, I started to develop a hunger for making money.  That’s when, in my point of view, one would start to think really hard about his/her business and the flaws in its business model that prevents money flowing into the households from his/her customers — that’s when you pivot.

I am a firm believer of Steve Blank’s customer development theory, but I think that is not enough — you need an emotional driver to make you pivot.  In my case, poverty was the emotional driver that just outweighs the emotional driver for making the initial non-sensical idea work.  Of course, an easy way out would have been to go to Best Buy or MacDonalds, but you’d just get yourself into a vicious cycle because at the end of the day, your business is not making money for you and that’s why you have to be in Best Buy, and if you are not full-time on your business, it’s very very hard to make it work.

So, develop a hunger for making money and pivot until you are making money!

Suggested Reading:

About Advisors, Investors, and Board of Directors.

Great advisors get you started, great investors build the company with you (not just giving you money and leaving you alone), and great directors help set your company governance to keep you focused and motivated.

The best way to get you started is to get an advisor, investor or director, who is running a company that offers products and services that are similar to yours, but in a different market.

For example, we have Mike Tan, who is the CEO of TeamPages, a venture-backed, top membership solution for sports teams and leagues as advisor.  TeamPages and SilkStart are very similar, but SilkStart is for associations and business organizations, such as your local Board of Trade, and etc.  So, having Mike’s experience and guidance was essential.  And he’s an awesome entrepreneur and a great CEO whom I really look up to.

The key here is that you need to recruit someone who you can work with and who you can learn from.

Suggested Reading:

About Sales & Marketing

First of all, you have to know your market, meaning you gotta do some market research to determine what kind of people will pay for your products, and where they are geographically!

One lesson I learned during the early days was that I should’ve moved to the US market much sooner because it is where the money is.  The fact is that Canada only has 33M people, but the US has 300M+ people!  So of course, the demand is higher there — more people, more organizations, more needs, and more money!  So, I can almost say that one should just forget about the Canadian market and start with the US market.

If you look at the Taiwanese entrepreneurs (Taiwan is where I was born, and lived for 14 years), all they think about is exporting because the Taiwanese market is just too small to be relevant.  I think Canadian entrepreneurs should also be thinking that way.  (p.s., Taiwan has 23M people, but the size of its land is 0.3% of that of Canada).

Suggested Reading

About Some Other Stuff

  • Choose your lawyer wisely — bad lawyers will bankrupt your company (financially).  Always set a budget for your lawyer, and don’t let him charge you by time, but by project.
  • Always have a vesting schedule with a 1-year cliff to protect yourself
  • Don’t always think about getting the best deal during your early days, think about how you can turn every deal into your reference
  • Run a business, not a charity — make money, don’t just raise money
  • The Free model doesn’t guarantee massive adoption — if you can deliver value, people will pay for it.  The try before you buy model is much better

Conclusion

Being an entrepreneur is fun and rewarding, but it certainly isn’t for everybody.  You need lots of resilience, persistence, and passion to get you through many days.  However, if I were to choose again, I would still choose to be an entrepreneur… maybe even sooner.

2011 is going to be very exciting!

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The Right to Lead

The Right to Lead by John C. Maxwell captures the why, what, and how of leadership in a three hour read — it’s a phenomenal book for aspiring leaders.  And John Maxwell is my favourite author on leadership.

I love the book because it’s:

  1. Concise: straight to the point, yet dramatic that encourages you to read on.
  2. Clear: unlike some business books, it avoids jargons and keeps the language simple.  It’s an easy read.
  3. Inspiring: there’s a true story from a prominent leader supporting each point made in the book.

Here are some notes that I’ve taken from the book:

  • The key to becoming an effective leader is not to focus on making other people follow, but on making yourself the kind of person they want to follow
  • No one respects and follows mediocrity.  Leaders earn the right to lead.
  • Leaders face crucial moments when they must choose between gearing up or giving up.
  • He who loses wealth loses much; he who loses a friend loses more; but he that loses courage loses all
  • Your vision must be bigger than you.  The greater it is, the more resources it will require.  The best leaders bring all of the resources in their world into play to accomplish something great.
  • To measure a leader, put a tape around his heart, not his head
  • If you aren’t going all the way, why go at all?
  • and it goes on…

If you aspire to become a leader, I strongly encourage you to pick up this book.  You will find that it’s totally worth it.

If you have a $500 Best Buy gift card, will you use it to buy an iPad, iPhone 4 or Macbook Pro 13″?

Know what you stand for

A couple weeks ago, I had a great conversation with my mentor about leadership.  She is the SVP of a star company that has been around for over a decade now.  She told me, as a leader, you got to have all the fundamental stuff, such as listening skills.  But, to be a great leader, you have know what you stand for, and you cannot shy away from making it very clear to everybody.

It may sound pretty standard, but it’s actually quite hard to do.  For example, are you able to do what Steve Jobs did about Flash vs. HTML5?  He made it very clear that he is for HTML5, and he puts his words into actions by being an advocate himself and by blocking Flash-related stuff from the iPad/iPhone/iPod.

When you hear people disagreeing / agreeing with you, you’ll know that you have made yourself clear.

Building a value FIRST organization

Have you ever thought about making a small lie for your own convenience?

Have you ever thought about making a bigger lie to maximize the return for yourself?

In the business world, people often ask the following questions:

  • What’s in it for me?
  • How am I going to maximize my own benefits?

Some people even ask:

  • How do I rip people off, so that I can get everything from them, and they will get nothing from me?
  • How do I trick others on my way up to the top?

Is it true that you can’t succeed without ripping people off?

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Being real!

What does it mean to be real?  Well, first of all, you have to know who you are in order to be real.

Where I came from

I came from an entrepreneurial family.  My grandpa started the first department store in Taiwan.  My uncle #1 started a commercial airline, my uncle #2 started a clean tech company, my granduncle is the Chairman of Taiwanese Business Association in China, and the list goes on.

Hence, when I was young, my playground was their boardrooms, and I truly enjoyed all the intense, aggressive discussions in there.

The lost Identity

When I started to work in the corporate world, I started to lose my identity.

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The iPad is essential

Those who failed to see the potential of the iPad are extremely shortsighted.

The iPad is not only innovative, but also essential in the following occasions:

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