This is an interesting article on an issue which all start ups have a problem with, managing the trenches while still being focused on the long term, and successfully communicating the same to the company, I was talking with the chairman yesterday and I had mentioned the lack of visibility to the whole organization of the vision of the organization and how we get there, what the individual contributors do to support to achieve the end game, we talked about it for a while and I came away with a personal challenge to try and fix it, in the time I have left with my present company. The article by Wil Schroter is the Founder and CEO of the Go BIG Network, he is an entrepreneur, with a good strategic grasp of what is what in the start up adventure.
Managing the Present while Focusing on the Future:
Staying focused on the big picture of your corporate vision is difficult when you're mired in the details of the day-to-day operations. Yet staying focused on the day-to-day details is what makes your big vision come to life. So how do you do both?
There's a bit of an art to managing the present while focusing on the future. The goal is to stack up the details in such a way that they continually build a stairway toward the big vision.
Having a ton of energy and enthusiasm for the future is of course a great attribute, but it can turn into a curse altogether if you don't learn how to focus your energy toward building your vision on a day-to-day level.
A Series of Small Victories
Any company that has achieved incredible growth has done so not through one amazing achievement, but from a series of small victories. It's not just the big customer contract that you landed last month, it was everything leading up to that event that made it happen.
The small victories are just as important as the big ones. The reason you landed that big account is because you thought to ask an old colleague out to lunch. During that time she informed you that a college friend of hers just landed a new C-level job at a company you wanted to pitch. That lunch turned into a useful introduction that turned into an opportunity to pitch your services.
Scoring the big victories, and ultimately achieving your goals, means constantly winning the smaller battles every day. Every additional contact you make, every feature your roll out, every process you improve at, is what transforms the company into your grand vision.
While those items may seem like the minutia, they are the items that really matter. Sure, a big client pitch that turns into a big piece of business feels like the kind of stuff you should be doing every day, but that's not realistic. You can't focus exclusively on the big items without zeroing in on the little ones that make them happen.
Take Small Bites and Chew Quickly
Yet if you're like most entrepreneurs, what's happening today seems like a bore. You're already thinking about where you're going to be next week, or next year, or in the next decade. It's your job, as the visionary, to be thinking well ahead of the game.
The problem however, with constantly living in the future is that you're not using your energy to get things done today that will make that future a reality. What you need to focus on is how to transform that energy into the satisfaction of just getting a little bit of work done today that feels like real progress.
Let's say, for example, that you wanted to create the next Microsoft. You wouldn't start by trying to develop Windows, Word, Excel, and PowerPoint all at once. You'd be spread too thin and you'd fail miserably. Instead, you would focus on trying to take a small bite out of your vision and then grow from there, like Microsoft did.
You'll get to your vision a whole lot faster if you concentrate on taking smaller bites by doing smaller, focused projects. Taking smaller bites will allow you to chew more quickly, and move on to the next bite. If you really want to speed up the big vision, your best bet is to motor through the small details as fast as possible.
As you're motoring through those small details, all you need to do is pick your head up from time to time to make sure you're still on the right course. Strategy and planning are great, and they certainly help make sure you are headed in the right direction. But at some point you need to just put down the map and focus on what's right in front of you.
The Vision for this Week
Instead of just focusing exclusively on the big picture items, try taking a look at what you're going to get done this week in particular. If all of those items are collectively bringing you closer to your vision, then that's the only thing you need to focus on right now. Put all of your time and energy into accomplishing the vision for this week as quickly and completely as possible.
You want to walk out of your office at the end of the week thinking you've gotten something done. Focusing too much on being huge today makes you feel like you're never getting anything done and therefore creates an un-necessary distraction.
Creating your big vision isn't just about the big plays, although that's all you read about when you learn about the last company that got bought or went public. Creating your big vision is about short yardage plays and lots of successful first downs.
Slainte
Gordon
This a record of my life, work and play as a Serial Entrepreneur, raised over £150 million and founded / co-founded six companies, listed one on the AIM and made trade sales of three others.
Thursday, May 31, 2007
Wednesday, May 30, 2007
Understanding the mind of the venture capitalists
I have been asked a few times by different folk about raising cash for there new company, I have advised them to start simple with other avenues of liquidity and progress to the VC funding only when you are in need of the big money(500k+), when you engage with the VC to raise funding you are entering someone else's domain, and area of expertise. You also need to remember that the VC company is run the same as any other company, it is run by human beings, the same as you and me, and some choices they make are based on gut instinct with a sprinkle of due diligence, others are made only on the numbers. The thing to keep in mind is that your deal although it is all important to you, is only one of many that the VC is working on and all these deals have to mesh together at that time for the VC company to function and make money as well, so though your idea may be great and they received it well you may still get a no, so be prepared and keep pitching until the "fat lady sings" and you see the money. I found this article from a blog which is for software entrepreneurs ( http://onstartups.com/) it talks about the mind and workings of the VC community and gives a link to a very useful site Venture Hacks which is run by (Babak) Nivi and Naval Ravikant. who have spent the last decade working as investors and entrepreneurs, smart guys and worth a look at.
VentureHacks: Peeking Inside The Blackbox Of Venture Capital
By Dharmesh Shah
If you're a startup entrepreneur, head on over to Venture Hacks, read their content and subscribe to their RSS feed. You'll be glad you did.
Disclaimer: I don't know Nivi and Naval (the guys behind the site) and I have no personal bias or conflict. I simply love the content on the site.
The reason I like the site so much is that it provides a rare glimpse into the black box of venture capital (and venture capitalists). For the most part, the industry is pretty closed and very few (except insiders) really get a glimpse into the details of the process. The reason is simple: For those that know enough to write about it, there' s rarely an incentive to do so. For those that don't know the innards of the business, you're not going to learn much that you couldn't pick up on your own through other sources. VentureHacks is the rare case where the authors know what they're talking about and are brave enough to actually do it. As an added bonus, they're witty and edgy too.
5 Reasons to Read VentureHacks
1. VC Negotiation Is An Art Form: As an entrepreneur, there are few things more "nuanced" that you'll deal with than raising institutional capital. Even if you decide not to raise venture capital, a lot of these skills and deal-terms will likely show up in other dealings you have (strategic partners, M&A transactions, etc.).
2. The Devil's In The Details: Most entrepreneurs focus too much energy on the "obvious" things like valuation. Fact is, there are other, non-valuation terms in the VC deal (vesting, stock option pool, liquidity preferences, etc.) that have a significant impact on the economics of your deal. It's easy to lure yourself into thinking you should solve for the highest valuation. But, in most cases, that's sub-optimal.
3. Great Advice Is Hard To Find: As it turns out, good advice in the VC business is hard to find. I would define good advice as a combination of competency (i.e. well informed) and objective (i.e. non-conflicted). You can get close sometimes (via lawyers, adivsors, etc.) but it's really hard to find great advice.
4. It's Not Enough To Be Smart: It's importat to remember that regardless of how smart you are, VC negotiation is not just a matter of raw intelligence. Sure, it helps t have a few brain cells to understand the dynamics of a deal, but a lot is hidden away in the dark corners that you only ever learn by doing it. It's also important to remember that the VCs do this for a living. Hopefully, you don't (you're building businessees for a living). You may be twice as smart as they are, but you're still at a disadvantage. Try to even the playing field as much as you can.
5. It's Intellectually Fascinating: Even if you're not planning on raising funding yourself, I think you might find the whole VC game intellectually interesting. Further, by getting yourself educated, you can perhaps help someone else that's a total newbie navigate the waters (See #3).
Slainte
Gordon
VentureHacks: Peeking Inside The Blackbox Of Venture Capital
By Dharmesh Shah
If you're a startup entrepreneur, head on over to Venture Hacks, read their content and subscribe to their RSS feed. You'll be glad you did.
Disclaimer: I don't know Nivi and Naval (the guys behind the site) and I have no personal bias or conflict. I simply love the content on the site.
The reason I like the site so much is that it provides a rare glimpse into the black box of venture capital (and venture capitalists). For the most part, the industry is pretty closed and very few (except insiders) really get a glimpse into the details of the process. The reason is simple: For those that know enough to write about it, there' s rarely an incentive to do so. For those that don't know the innards of the business, you're not going to learn much that you couldn't pick up on your own through other sources. VentureHacks is the rare case where the authors know what they're talking about and are brave enough to actually do it. As an added bonus, they're witty and edgy too.
5 Reasons to Read VentureHacks
1. VC Negotiation Is An Art Form: As an entrepreneur, there are few things more "nuanced" that you'll deal with than raising institutional capital. Even if you decide not to raise venture capital, a lot of these skills and deal-terms will likely show up in other dealings you have (strategic partners, M&A transactions, etc.).
2. The Devil's In The Details: Most entrepreneurs focus too much energy on the "obvious" things like valuation. Fact is, there are other, non-valuation terms in the VC deal (vesting, stock option pool, liquidity preferences, etc.) that have a significant impact on the economics of your deal. It's easy to lure yourself into thinking you should solve for the highest valuation. But, in most cases, that's sub-optimal.
3. Great Advice Is Hard To Find: As it turns out, good advice in the VC business is hard to find. I would define good advice as a combination of competency (i.e. well informed) and objective (i.e. non-conflicted). You can get close sometimes (via lawyers, adivsors, etc.) but it's really hard to find great advice.
4. It's Not Enough To Be Smart: It's importat to remember that regardless of how smart you are, VC negotiation is not just a matter of raw intelligence. Sure, it helps t have a few brain cells to understand the dynamics of a deal, but a lot is hidden away in the dark corners that you only ever learn by doing it. It's also important to remember that the VCs do this for a living. Hopefully, you don't (you're building businessees for a living). You may be twice as smart as they are, but you're still at a disadvantage. Try to even the playing field as much as you can.
5. It's Intellectually Fascinating: Even if you're not planning on raising funding yourself, I think you might find the whole VC game intellectually interesting. Further, by getting yourself educated, you can perhaps help someone else that's a total newbie navigate the waters (See #3).
Slainte
Gordon
Tuesday, May 29, 2007
Some reading material for the beach this summer
I was given a book by John Terceman to read, he had reviewed my blog and commented that I should read a book by Stuart Skorman, "Confessions of Serial Entrepreneur", this is a great read and will keeping you smiling all the way through it, well those of us who have been there and done that it will. Stuart is a die hard Entrepreneur, does not take no for an answer and follows his passion and vision, there are some great lessons to be taken from this book and I will share a few over the next few weeks, but I would suggest that you get the book, and have a read, tell me what you think. I have included a short review of his book below and an article on Stuart by Lisa Margonelli, I do not push books much here or in class but would suggest you take a look at the book or at least Google "Stuart".
The book can be found here on Amazon http://www.amazon.co.uk/Confessions-Serial-Entrepreneur-Cant-Starting/dp/0787987328/ref=sr_1_1/026-3440564-6330828?ie=UTF8&s=books&qid=1180420535&sr=8-1
Stuart Skorman, "Confessions of Serial Entrepreneur",
What the Critics Say
"Here is another 'hyper kid' who turned his childhood handicaps and failures into success and happiness as an adult. This book will be an inspiration to all future entrepreneurs and a good read for just about anyone who enjoys a great adventure." (Paul Orfalea, founder, Kinko's, and author of Copy This!)"Stuart Skorman leads the reader on a riveting journey as he chronicles his entrepreneurial career. This book provides valuable insights into the joys and challenges of starting and growing a new business. Confessions of a Serial Entrepreneur is the exciting tale of Skorman's passion to enrich his customers' lives and a vital resource for aspiring entrepreneurs and business leaders." (Carl Schramm, president and CEO, Ewing Marion Kauffman Foundation)
Publisher's Summary
Entrepreneur Stuart Skorman, the founder of Elephant Pharmacy, Hungryminds.com, Reel.com, and Empire Video, grew up in a retailing family in Ohio. He worked every kind of job, from cab driver to professional poker player to CEO. In this entertaining, personal account of his coming of age in the business world, Skorman gives an insider's view of what it takes to start a business from the ground up.
Stuart Skorman offers his hard-won lessons in business for any entrepreneur or small businessperson who wants to create a company that has a heart and soul. He reveals what he learned about marketing while working a stint as a rock band manager and bares his soul about his failure during the dot-com bubble. He describes in vivid terms the roller coaster ride of the entrepreneur in good times and bad, and explains how to survive in today's uncertain business environment.
Stuart's Elephant
Successful serial entrepreneur goes for it again
by Lisa Margonelli, special to SF Gate
Wednesday, February 19, 2003
If you were to go to the Elephant Pharmacy on Shattuck Avenue in Berkeley and get lost in this giant drugstore-gone-crunchy (Suave shampoo beside the Shaman brand, Nature Boy and Nature Girl diapers snuggled next to the Huggies, ear-wax remover, calcium supplements and a panel truck's worth of herbal teas), you might be greeted by Stuart Skorman, a small man in his 50s whose bright eyes dart eagerly under his bushy eyebrows. "IseeyoulookingcanIhelpyoufindsomething?" he'd say. When you answered, he'd lean forward from his waist and speed off. (His head always seems to move faster than his legs.) "Chelated magnesium supplements? Right here. Right here."
Stuart Skorman founded Elephant Pharmacy, and he wants it to do to Walgreen's what Whole Foods did to Safeway. If he succeeds, a chain of Elephants will go marching out across the land, lending its trusted brand name to everything from Vitamin C to health spas to HMOs. In Skorman's wilder dreams, the Elephant brand will be worth several billion in five or 10 years. If it fails, on the other hand, he'll lose more than half his personal fortune -- millions of dollars -- as well as money from investors.
As the founder of three previous businesses -- two of them wildly successful (including Reel.com, an online video-delivery service, which sold for $100 million in 1998), as well as one failure (Hungry Minds, an online learning portal, which wiped out one-third of his savings) -- he knows how this game is played. If Elephant fails, he may never have enough money to play entrepreneur in a big way again.
Who would take such a chance? Who would want the long hours, the acid stomach, the sheer hassle? After all, it's not as if Skorman is a natural-born risk taker in other areas of his life. When he opens a mustard jar in a restaurant, he first covers his hands with his sweater to avoid getting germs on his fingers. The answer may be that Skorman is a devotee of retail capitalism in its purest form. "Business is really clear," he says. "It's a simple relationship: If a customer is happy, you make money." Standard stuff for capitalists, but, following Skorman around his store, you quickly get the sense that he might have reversed the equation a little. He has an almost Pavlovian relationship to the cash register: When it rings, he feels the love.
Interestingly, what does not motivate Skorman, apparently, is acquiring stuff. He does not even own a house, but rents a modest apartment in Noe Valley with his partner. He wears rumpled clothes and drives a station wagon, although he frets because it's a Saab and it has too many extra features. In any case, he quickly adds, his partner drives a 7-year-old car.
Right now, what Skorman wants is a lot of affluent Berkeley Birkenstock-shod customers to come to Elephant. Starting a big-box store -- even if it's a pretty good idea -- is not easy. For one thing, the store has 37,000 products -- and all of them need price tags that meet the competition's. And, for another thing, the building needed expensive seismic upgrades. Then, too, it cost a lot of money to get a pricey CEO from Nike, and she didn't work out. And it turns out that people don't go to the pharmacy as often as you might think, which means they're not buying one of the 50 cool kinds of hand cream on impulse.
Skorman stands between the (tasteful) greeting cards and the one-hour-photo counter and motions like he's waving signal wands to land a plane, "We're holding classes right here," he says. "Ayurvedic, acupuncture, the pharmacist talking about medication for depression, tai chi." Flowers, registered nurses, a bookstore, bone-density measuring machines, natural makeup for aging baby boomers, fiddle music on the sound system. Anything to get them in the door.
Skorman's devotion to customers borders on the obsessive. He slept in the store for two weeks. Last night, when a woman hit her nose on the too-clean plate-glass door, it was Skorman who sat with her as she recovered. "I wish I could do small ideas," says Skorman. "I'm 54 and working 80 hours a week. When you're young, it seems like inspiration, but when you're older, you think it's not healthy."
Money did not always love Stuart Skorman. Until he was 36, he failed at everything he did. He was a taxi driver, a real estate agent, a store stocker, a political-campaign manager and manager of a rock-and-roll band. He tried writing, but he says he didn't have the attention span. "Basically, I couldn't hold a job," he says. "I didn't fit into the culture, and I always wanted to run my boss' business." He spent many years wondering what he was going to do with himself, but in Vermont in the '70s, he was hardly alone: "Those were the hippie years -- you couldn't do business, because it was bad to make money."
But in 1985, Skorman had an unoriginal idea: Start an independent video store for movie buffs. He got together the capital and ran it his way. The store had lots of movies, and the staff was crazy about them -- they even wrote their own reviews. The store was a hit. "Most people moved to Vermont to be poor," he quips. "Turns out I got wealthy there."
His store expanded into a chain, but Skorman felt that his success showed how much the community valued his services. When Vermont was paralyzed by winter snowstorms, the chain ran radio ads telling people the stores wouldn't charge late fees; they could stay home with their overdue videos and remain safe and warm. On Saturday nights, the stores were filled with people. "I was happy to be providing services to the community," he says. "Giving great service inspires me."
But the money and success helped, too. After years of being frustrated and "blocked" because he couldn't express himself, Skorman describes his life before and after the video store as "night and day." As a child, he says, he had a "crazy brain" that hopped around like a bird, focusing for a minute before skittering off to the next thing. Growing up in Akron, Ohio, with dyslexia made success at school out of the question. (Even now, after launching two dot-coms, he's not into e-mail.) So his late bloom brought a redemption of sorts. In being an entrepreneur, he found his calling -- serving customers. "There's nothing freer than an entrepreneur," he says. "I'm a kind of wild man."
Almost. When Skorman's partners wanted to sell the video stores to a national chain, he fretted. He felt loyalty to his employees, who had helped him start the business. He knew they wouldn't want to work for the chain. "I was sad," he says. "Those were my people. But then I went to a psychotherapist, who said I had to live my own life."
And so Skorman sold the stores, stuck three million bucks in his pocket -- more than he'd dreamed of -- packed up his belongings in snowy Vermont and moved to sunny California for a two-year vacation. But relaxing wasn't really that much fun, so he became a high-stakes poker player. "I'm a start-up kind of guy," he says. "It's a high-stakes game with smart people. Poker is like a start-up, but you have no responsibility. With poker, you can take the next day off."
In 1996, he started an online video-delivery service called Reel.com, which offered customers thousands of movie categories and custom reviews. The enterprise didn't make a profit, though it seemed to have potential. In 1998, he sold it to Hollywood Video for $100 million. This time, he didn't need a therapist to tell him to take the money and move on.
His next business was an online education program called Hungry Minds. Skorman describes the venture as a complete failure, though he managed to sell it for $3 million to IDG in 2000. He says the investors took a 100 percent loss, and he himself lost one-third of his wealth, though he paid off creditors and gave employees six months' severance pay. "I deserved it," he says of the failure. "I fell in love with the idea, but it was a bad one."
But he was still fairly rich. So he and his partner, who studies dolphins, headed off to the South Pacific to swim with the dolphins for one and a half years. "We have friends who are dolphins," he says. "We're good at befriending the animals, who don't get to know many people." The dolphins, evidently, were tough customers, but he won them over.
And, in fall 2001, he became obsessed with building a pharmacy that would combine the open feeling of a natural-food store with the comprehensive quantity of a chain. He wanted it to be a place where the pharmacist steps out from behind the counter to talk to customers. Sort of 1950s Akron-meets-New Age Taos-meets-Wal-Mart. Skorman divides the concept into "math" and "heart." "If the math doesn't work, you're out of business," he says. "But if you're not doing good in people's lives, then who cares if you're making money?" The idea was so good, he says, he couldn't stop himself: "Call it passion or insanity -- the rest of your life suffers."
One day last week, Skorman was caught up in the wonder of the start-up. He called his managers to a meeting, telling them, "I've got a whole new revolution. A whole new store design." They don't flinch. Sandy Sickley has been through three start-ups with Skorman. She wears a practical ponytail and a polar-fleece jacket -- as though ready for a blizzard, a heat wave or a shipment of 10,000 unlabeled toothbrushes. "He bit a big bite," she says of Skorman's latest. "I joke that I bit off more than she could chew," interjects Skorman. And so it goes.
Skorman calls the meeting to order, tells a story about his father's dime store in Akron and suggests that the drugstore begin to sell fresh produce. The lieutenants don't blink. "I was waiting for a comma," said one when Skorman was finished with his pitch. They all agree that selling fresh produce at the store will draw people in more often, make the pharmacy more necessary. They begin to strategize -- where should the produce go? (Out the door, of course, so it drags the customers in off the street.) Do they need a permit? A walk-in cooler? Who will be the supplier? Skorman sits back happily, on to the next problem, following his hopping brain.
Back at the pharmacy, the revolution continues. The sales assistant who tends the flowers in the front of the store wears two giant stargazer lilies on top of her head -- like some sort of weird satellite dish for discerning customers' needs. Samples of organic makeup -- which resembles cocoa -- bear a sign reading "Sample. Do not eat!" Underneath the shelves of cough medicines, Skorman has posted a friendly message: "Most coughs will go away on their own." It's strange to stand in a pharmacy that actually discourages you from buying Robitussin. How does Elephant make money without the "math" of cough-syrup sales? It's the store's "heart," Skorman says. "We're not here to sell, we're here to make friends. That's good business."
The book can be found here on Amazon http://www.amazon.co.uk/Confessions-Serial-Entrepreneur-Cant-Starting/dp/0787987328/ref=sr_1_1/026-3440564-6330828?ie=UTF8&s=books&qid=1180420535&sr=8-1
Stuart Skorman, "Confessions of Serial Entrepreneur",
What the Critics Say
"Here is another 'hyper kid' who turned his childhood handicaps and failures into success and happiness as an adult. This book will be an inspiration to all future entrepreneurs and a good read for just about anyone who enjoys a great adventure." (Paul Orfalea, founder, Kinko's, and author of Copy This!)"Stuart Skorman leads the reader on a riveting journey as he chronicles his entrepreneurial career. This book provides valuable insights into the joys and challenges of starting and growing a new business. Confessions of a Serial Entrepreneur is the exciting tale of Skorman's passion to enrich his customers' lives and a vital resource for aspiring entrepreneurs and business leaders." (Carl Schramm, president and CEO, Ewing Marion Kauffman Foundation)
Publisher's Summary
Entrepreneur Stuart Skorman, the founder of Elephant Pharmacy, Hungryminds.com, Reel.com, and Empire Video, grew up in a retailing family in Ohio. He worked every kind of job, from cab driver to professional poker player to CEO. In this entertaining, personal account of his coming of age in the business world, Skorman gives an insider's view of what it takes to start a business from the ground up.
Stuart Skorman offers his hard-won lessons in business for any entrepreneur or small businessperson who wants to create a company that has a heart and soul. He reveals what he learned about marketing while working a stint as a rock band manager and bares his soul about his failure during the dot-com bubble. He describes in vivid terms the roller coaster ride of the entrepreneur in good times and bad, and explains how to survive in today's uncertain business environment.
Stuart's Elephant
Successful serial entrepreneur goes for it again
by Lisa Margonelli, special to SF Gate
Wednesday, February 19, 2003
If you were to go to the Elephant Pharmacy on Shattuck Avenue in Berkeley and get lost in this giant drugstore-gone-crunchy (Suave shampoo beside the Shaman brand, Nature Boy and Nature Girl diapers snuggled next to the Huggies, ear-wax remover, calcium supplements and a panel truck's worth of herbal teas), you might be greeted by Stuart Skorman, a small man in his 50s whose bright eyes dart eagerly under his bushy eyebrows. "IseeyoulookingcanIhelpyoufindsomething?" he'd say. When you answered, he'd lean forward from his waist and speed off. (His head always seems to move faster than his legs.) "Chelated magnesium supplements? Right here. Right here."
Stuart Skorman founded Elephant Pharmacy, and he wants it to do to Walgreen's what Whole Foods did to Safeway. If he succeeds, a chain of Elephants will go marching out across the land, lending its trusted brand name to everything from Vitamin C to health spas to HMOs. In Skorman's wilder dreams, the Elephant brand will be worth several billion in five or 10 years. If it fails, on the other hand, he'll lose more than half his personal fortune -- millions of dollars -- as well as money from investors.
As the founder of three previous businesses -- two of them wildly successful (including Reel.com, an online video-delivery service, which sold for $100 million in 1998), as well as one failure (Hungry Minds, an online learning portal, which wiped out one-third of his savings) -- he knows how this game is played. If Elephant fails, he may never have enough money to play entrepreneur in a big way again.
Who would take such a chance? Who would want the long hours, the acid stomach, the sheer hassle? After all, it's not as if Skorman is a natural-born risk taker in other areas of his life. When he opens a mustard jar in a restaurant, he first covers his hands with his sweater to avoid getting germs on his fingers. The answer may be that Skorman is a devotee of retail capitalism in its purest form. "Business is really clear," he says. "It's a simple relationship: If a customer is happy, you make money." Standard stuff for capitalists, but, following Skorman around his store, you quickly get the sense that he might have reversed the equation a little. He has an almost Pavlovian relationship to the cash register: When it rings, he feels the love.
Interestingly, what does not motivate Skorman, apparently, is acquiring stuff. He does not even own a house, but rents a modest apartment in Noe Valley with his partner. He wears rumpled clothes and drives a station wagon, although he frets because it's a Saab and it has too many extra features. In any case, he quickly adds, his partner drives a 7-year-old car.
Right now, what Skorman wants is a lot of affluent Berkeley Birkenstock-shod customers to come to Elephant. Starting a big-box store -- even if it's a pretty good idea -- is not easy. For one thing, the store has 37,000 products -- and all of them need price tags that meet the competition's. And, for another thing, the building needed expensive seismic upgrades. Then, too, it cost a lot of money to get a pricey CEO from Nike, and she didn't work out. And it turns out that people don't go to the pharmacy as often as you might think, which means they're not buying one of the 50 cool kinds of hand cream on impulse.
Skorman stands between the (tasteful) greeting cards and the one-hour-photo counter and motions like he's waving signal wands to land a plane, "We're holding classes right here," he says. "Ayurvedic, acupuncture, the pharmacist talking about medication for depression, tai chi." Flowers, registered nurses, a bookstore, bone-density measuring machines, natural makeup for aging baby boomers, fiddle music on the sound system. Anything to get them in the door.
Skorman's devotion to customers borders on the obsessive. He slept in the store for two weeks. Last night, when a woman hit her nose on the too-clean plate-glass door, it was Skorman who sat with her as she recovered. "I wish I could do small ideas," says Skorman. "I'm 54 and working 80 hours a week. When you're young, it seems like inspiration, but when you're older, you think it's not healthy."
Money did not always love Stuart Skorman. Until he was 36, he failed at everything he did. He was a taxi driver, a real estate agent, a store stocker, a political-campaign manager and manager of a rock-and-roll band. He tried writing, but he says he didn't have the attention span. "Basically, I couldn't hold a job," he says. "I didn't fit into the culture, and I always wanted to run my boss' business." He spent many years wondering what he was going to do with himself, but in Vermont in the '70s, he was hardly alone: "Those were the hippie years -- you couldn't do business, because it was bad to make money."
But in 1985, Skorman had an unoriginal idea: Start an independent video store for movie buffs. He got together the capital and ran it his way. The store had lots of movies, and the staff was crazy about them -- they even wrote their own reviews. The store was a hit. "Most people moved to Vermont to be poor," he quips. "Turns out I got wealthy there."
His store expanded into a chain, but Skorman felt that his success showed how much the community valued his services. When Vermont was paralyzed by winter snowstorms, the chain ran radio ads telling people the stores wouldn't charge late fees; they could stay home with their overdue videos and remain safe and warm. On Saturday nights, the stores were filled with people. "I was happy to be providing services to the community," he says. "Giving great service inspires me."
But the money and success helped, too. After years of being frustrated and "blocked" because he couldn't express himself, Skorman describes his life before and after the video store as "night and day." As a child, he says, he had a "crazy brain" that hopped around like a bird, focusing for a minute before skittering off to the next thing. Growing up in Akron, Ohio, with dyslexia made success at school out of the question. (Even now, after launching two dot-coms, he's not into e-mail.) So his late bloom brought a redemption of sorts. In being an entrepreneur, he found his calling -- serving customers. "There's nothing freer than an entrepreneur," he says. "I'm a kind of wild man."
Almost. When Skorman's partners wanted to sell the video stores to a national chain, he fretted. He felt loyalty to his employees, who had helped him start the business. He knew they wouldn't want to work for the chain. "I was sad," he says. "Those were my people. But then I went to a psychotherapist, who said I had to live my own life."
And so Skorman sold the stores, stuck three million bucks in his pocket -- more than he'd dreamed of -- packed up his belongings in snowy Vermont and moved to sunny California for a two-year vacation. But relaxing wasn't really that much fun, so he became a high-stakes poker player. "I'm a start-up kind of guy," he says. "It's a high-stakes game with smart people. Poker is like a start-up, but you have no responsibility. With poker, you can take the next day off."
In 1996, he started an online video-delivery service called Reel.com, which offered customers thousands of movie categories and custom reviews. The enterprise didn't make a profit, though it seemed to have potential. In 1998, he sold it to Hollywood Video for $100 million. This time, he didn't need a therapist to tell him to take the money and move on.
His next business was an online education program called Hungry Minds. Skorman describes the venture as a complete failure, though he managed to sell it for $3 million to IDG in 2000. He says the investors took a 100 percent loss, and he himself lost one-third of his wealth, though he paid off creditors and gave employees six months' severance pay. "I deserved it," he says of the failure. "I fell in love with the idea, but it was a bad one."
But he was still fairly rich. So he and his partner, who studies dolphins, headed off to the South Pacific to swim with the dolphins for one and a half years. "We have friends who are dolphins," he says. "We're good at befriending the animals, who don't get to know many people." The dolphins, evidently, were tough customers, but he won them over.
And, in fall 2001, he became obsessed with building a pharmacy that would combine the open feeling of a natural-food store with the comprehensive quantity of a chain. He wanted it to be a place where the pharmacist steps out from behind the counter to talk to customers. Sort of 1950s Akron-meets-New Age Taos-meets-Wal-Mart. Skorman divides the concept into "math" and "heart." "If the math doesn't work, you're out of business," he says. "But if you're not doing good in people's lives, then who cares if you're making money?" The idea was so good, he says, he couldn't stop himself: "Call it passion or insanity -- the rest of your life suffers."
One day last week, Skorman was caught up in the wonder of the start-up. He called his managers to a meeting, telling them, "I've got a whole new revolution. A whole new store design." They don't flinch. Sandy Sickley has been through three start-ups with Skorman. She wears a practical ponytail and a polar-fleece jacket -- as though ready for a blizzard, a heat wave or a shipment of 10,000 unlabeled toothbrushes. "He bit a big bite," she says of Skorman's latest. "I joke that I bit off more than she could chew," interjects Skorman. And so it goes.
Skorman calls the meeting to order, tells a story about his father's dime store in Akron and suggests that the drugstore begin to sell fresh produce. The lieutenants don't blink. "I was waiting for a comma," said one when Skorman was finished with his pitch. They all agree that selling fresh produce at the store will draw people in more often, make the pharmacy more necessary. They begin to strategize -- where should the produce go? (Out the door, of course, so it drags the customers in off the street.) Do they need a permit? A walk-in cooler? Who will be the supplier? Skorman sits back happily, on to the next problem, following his hopping brain.
Back at the pharmacy, the revolution continues. The sales assistant who tends the flowers in the front of the store wears two giant stargazer lilies on top of her head -- like some sort of weird satellite dish for discerning customers' needs. Samples of organic makeup -- which resembles cocoa -- bear a sign reading "Sample. Do not eat!" Underneath the shelves of cough medicines, Skorman has posted a friendly message: "Most coughs will go away on their own." It's strange to stand in a pharmacy that actually discourages you from buying Robitussin. How does Elephant make money without the "math" of cough-syrup sales? It's the store's "heart," Skorman says. "We're not here to sell, we're here to make friends. That's good business."
Slainte
Gordon Whyte
Monday, May 28, 2007
Some comments from Scotsman's Business start up Breakfast.
These are some of the comments made to a group of 100 Entrepreneurs by some of the panel at a breakfast meeting run by the Scotsman newspaper, on growth and the SME. I have met most of these guys and would say that they all have something to valid to say.....
GEOFFREY THOMSON
GEOFFREY Thomson is chief executive and co-founder of Braveheart Investment Group. Thomson is well known as a dealmaker and business angel and has written investment columns for the media.
GEOFFREY Thomson is chief executive and co-founder of Braveheart Investment Group. Thomson is well known as a dealmaker and business angel and has written investment columns for the media.
Always give a clear message about your needs
Make sure you deliver your promises
Know where you want to go and how
Show tenacity in dealing with investors
Know your strengths and weaknesses
PAUL RENZ
PAUL Renz is head of Scott-Moncrieff's tax group, which provides corporate tax, personal tax, employer tax, VAT and indirect taxation advice and services to businesses, public sector bodies, charitable organisations and high net worth individuals.
PAUL Renz is head of Scott-Moncrieff's tax group, which provides corporate tax, personal tax, employer tax, VAT and indirect taxation advice and services to businesses, public sector bodies, charitable organisations and high net worth individuals.
Identify your big idea and value proposition
Surround yourself with motivated and energetic people
Use astute administration to take advantage of tax breaks
Use R&D tax credits to improve profits
Ensure you have services to meet customer demand
JOHN ANDERSON
JOHN Anderson is a well-known specialist in entrepreneurship and new venture creation in Scotland. He brings considerable experience of emerging and high-growth firms to his role as chief executive of the Entrepreneurial Exchange.
JOHN Anderson is a well-known specialist in entrepreneurship and new venture creation in Scotland. He brings considerable experience of emerging and high-growth firms to his role as chief executive of the Entrepreneurial Exchange.
Surround yourself with outstanding people who can identify problems
Identify what you are good at and stick to it
Start fundraising as early as possible
Never lose sight of costs - don't get too fat
Regards
Gordon
Some thoughts on PR from an article by Guy K
This is not an issue for the early doors start up, but as a company gets close to an IPO or other liquidity event, PR can make the difference in the end valuation. I have seen companies who have had PR gurus as CEO'S and I saw the difference that this makes, Bookham, Kymata, to name a couple, all had PR gurus in charge and that made the difference between success and failure for them, compared to other companies in that sector. Guy brings out some truths....but I would say that free PR is good....if there is such a thing...but always be in control off the message.
The Top Ten Reasons Why PR Doesn't Work (From a post in Guy Kawasaki's blog)
Margie Zable Fisher runs theprsite.com. Every day someone tells her that he or she has been “burned” by a PR firm, and Margie’s goal is to help small business find the right PR firm. I asked her to provide the top ten reasons why PR doesn’t work:
The client doesn’t understand the publicity process. PR folks need to better educate people about how publicity works. The first thing many clients ask is, “Can you get me on Oprah or the front page of the Wall Street Journal?” The answer might be “yes,” but the process to get to the “yes” may take months or years, and may first include a series of smaller placements.
The scope of work is not detailed and agreed upon by both parties. Here’s a typical example: a client signs an agreement to spend $3,000 per month. Client expects to get three publicity placements per month. PR person expects to work 20 hours, regardless of the outcome. The inevitable disconnect leads to customer frustration and the feeling of being “burned.”
The client has not been properly trained on how to communicate with the media. Proper training for interviews is crucial; otherwise, key messages can be misconstrued, and even negative stories can result. Clients seldom blame themselves when this happens.
The client and the PR person or firm are not a good match. Example: Client hears about a local PR person, meets and likes the PR person, and figures it’s a good match. Or the client chooses the lowest price PR option. And the PR person, instead of referring the client to another practitioner who is a better fit, decides to take on the client—and the money.
The client has not gotten results quickly enough and ends the relationship too soon. Client should plan on conducting a campaign for a minimum of six months. And even that is aggressive. A year should really be the bare minimum to commit to PR The media works on its own timetable, which is usually much longer than the client’s.
PR people don’t explain the kind of publicity placements a client will most likely receive. Every client wants a big profile of the company on the cover of a major magazine or newspaper, but most stories are about a “trend,” several companies, or some recent news with quotes from experts. Profiles are few and far between. Yet, instead of explaining this, PR people often tell potential clients what they want to hear, in order to get the business.
Clients don’t realize that what happens after you get the publicity coverage is sometimes more important than the actual placement. My smartest client didn’t care if he got a quote or a profile—he just wanted to be included in major media. When it was time to get an agent and publisher for his book, he handed them a list of all his media placements, and this clinched the deal. The agent and publisher figured that if all of the major media was willing to include him as a source, then he must have something important to say.
Clients refuse to be flexible on their story angles. One of my clients once said to me, “We only want profiles.” When the media wasn’t interested, they refused to consider other story angles that the media was interested in. Now I make sure clients are willing to have us pitch three to four angles.
Clients get upset when the media coverage is not 100% accurate or not the kind of coverage that they wanted. One of my former clients said, “That TV segment on me was only a minute long.” When I explained that length of time was impressive in TV Land, she refused to understand.
Clients won’t change their schedules for the media. Clients need to drop everything if the media calls. This may be inconvenient, but the media waits for no one. If you want to be a “media darling,” then you need to make yourself available at any time. Those who do will reap the best benefits and placements.
Slainte
Gordon
The Top Ten Reasons Why PR Doesn't Work (From a post in Guy Kawasaki's blog)
Margie Zable Fisher runs theprsite.com. Every day someone tells her that he or she has been “burned” by a PR firm, and Margie’s goal is to help small business find the right PR firm. I asked her to provide the top ten reasons why PR doesn’t work:
The client doesn’t understand the publicity process. PR folks need to better educate people about how publicity works. The first thing many clients ask is, “Can you get me on Oprah or the front page of the Wall Street Journal?” The answer might be “yes,” but the process to get to the “yes” may take months or years, and may first include a series of smaller placements.
The scope of work is not detailed and agreed upon by both parties. Here’s a typical example: a client signs an agreement to spend $3,000 per month. Client expects to get three publicity placements per month. PR person expects to work 20 hours, regardless of the outcome. The inevitable disconnect leads to customer frustration and the feeling of being “burned.”
The client has not been properly trained on how to communicate with the media. Proper training for interviews is crucial; otherwise, key messages can be misconstrued, and even negative stories can result. Clients seldom blame themselves when this happens.
The client and the PR person or firm are not a good match. Example: Client hears about a local PR person, meets and likes the PR person, and figures it’s a good match. Or the client chooses the lowest price PR option. And the PR person, instead of referring the client to another practitioner who is a better fit, decides to take on the client—and the money.
The client has not gotten results quickly enough and ends the relationship too soon. Client should plan on conducting a campaign for a minimum of six months. And even that is aggressive. A year should really be the bare minimum to commit to PR The media works on its own timetable, which is usually much longer than the client’s.
PR people don’t explain the kind of publicity placements a client will most likely receive. Every client wants a big profile of the company on the cover of a major magazine or newspaper, but most stories are about a “trend,” several companies, or some recent news with quotes from experts. Profiles are few and far between. Yet, instead of explaining this, PR people often tell potential clients what they want to hear, in order to get the business.
Clients don’t realize that what happens after you get the publicity coverage is sometimes more important than the actual placement. My smartest client didn’t care if he got a quote or a profile—he just wanted to be included in major media. When it was time to get an agent and publisher for his book, he handed them a list of all his media placements, and this clinched the deal. The agent and publisher figured that if all of the major media was willing to include him as a source, then he must have something important to say.
Clients refuse to be flexible on their story angles. One of my clients once said to me, “We only want profiles.” When the media wasn’t interested, they refused to consider other story angles that the media was interested in. Now I make sure clients are willing to have us pitch three to four angles.
Clients get upset when the media coverage is not 100% accurate or not the kind of coverage that they wanted. One of my former clients said, “That TV segment on me was only a minute long.” When I explained that length of time was impressive in TV Land, she refused to understand.
Clients won’t change their schedules for the media. Clients need to drop everything if the media calls. This may be inconvenient, but the media waits for no one. If you want to be a “media darling,” then you need to make yourself available at any time. Those who do will reap the best benefits and placements.
Slainte
Gordon
Friday, May 25, 2007
Friday post....after my vacation..
Returned from the other side of the world...
Well it's been a while since my last post, I was on holiday, down under for three weeks and just returned yesterday, amazing holiday and a some good thinking time....I will not be posting much today, just to say I am back and that I will start again on Monday.....so a question for the weekend? what is your purpose in life and is it aligned with the your career ? should it be ?, are you happy in what you do, really happy, or are you waiting to retire to enjoy your life ? it may never come...
have great weekend...
Slainte
Gordon
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