Lessons from the wild ride of entrepreneurship
As he transitions to a new role, the first director of the University of Nevada, Reno Innevation Center—Powered By Switch reflects on what he’s learned while helping early-stage companies navigate the challenging yet exciting and rewarding entrepreneurial journey.
It's been just about three-and-a-half years, since I called up Mridul Gautam, vice president of Research and Innovation at the University of Nevada, Reno, to let him know that I had just moved to Reno and to offer my services as a tech startup mentor. It turns out the University had just finished construction of the Innevation Center in downtown Reno, and Mridul thought my background as a Silicon Valley entrepreneur would make me a good candidate for the director role.
We have so many ingredients for growing vibrant tech companies in Reno. It's a fantastic place to live, close to Silicon Valley, and we have a R1-classified University turning out a qualified workforce. So, what are we missing? Critical mass. I'm a big believer in statistics and if we want to double our chances of a having a few more wins, we need to double the number of quality startup companies. Focusing both on importing companies as well as helping retain and grow local companies is required.
Over the past three years, I've been fortunate to work with hundreds of companies and early-stage entrepreneurs through the Innevation Center and through collaborations with organizations such as EDAWN, and I've learned a lot. Here are some of the lessons that I can take away:
The "Valley of Death" is real: It's not easy. Every company I have worked with has significant challenges bridging from their early "friends and family support" to the stage of getting qualified investors interested in their company. At the same time, companies make mistakes due to inexperience. Not having a history with investors or a track record makes this more challenging. The role of experienced, candid mentorship can be especially invaluable between these early stages.
Being a startup CEO is difficult: Being a CEO of a larger operating company is easier. The CEO of a startup doesn't have a CTO, CFO, COO, CMO, VP of sales, VP of R+D and legal counsel. Yet these are real tasks that must be managed; they need to be executed correctly. In a startup, they all fall on the shoulders of the CEO. To be successful, the startup CEO needs to be a very special person: brilliant, personable and adaptable. It's a tall order, yet it's rewarding to see many young CEOs develop this knowledge and experience, or learn when and how to call on others for help.
The initial product or business plan is usually wrong: Almost every company I have encountered has had to "pivot." That's a nice way of saying the company's initial product or service just won't cut it. As Kevin Lyons, one of our active mentors, says, "If your initial potential customers and investors are not jumping up and down to buy your product or invest in your company, do something else." The problem is often that most of our early stage companies have not spent enough time talking and, more importantly, listening to prospective customers.
Selling is key: I was lecturing a group of business students and began by asking "how many of you want to be entrepreneurs?" Almost all the hands went up. My second question was "how many of you love to sell." Almost no hands when up. Big disconnect. The entrepreneur needs to love to sell, promote and inspire.
Desperation feeds innovation: Innovation and especially teaching innovation are tricky. Knowledge, facilities and time to work are all key ingredients for innovation. But one ingredient where startups have an edge over established companies is desperation. The belief that failure is not an option and the next paycheck is not around the corner makes the startup company serious about and hungry for innovation.
Nevada provides both opportunity and challenges: When I first arrived in Nevada, I felt it was a panacea for startups. We have an educated workforce, inexpensive infrastructure and a very attractive quality of life. On the other hand, we have a challenging early-stage funding environment and limited high-tech companies from where tech startups usually are born. The regional entrepreneurial ecosystem has come far, but its development needs to continue.
Mentoring is not a part-time activity: Typically, mentors spend a few hours a week or month with a company they are helping. I tried and it doesn't seem to be an equation that works. When we run our InNEVator accelerator program, it often can take me at least 20 hours just to understand the business. Early stage companies are nimble, making big changes quickly, and they have complex problems with lots of moving parts. I learned helping a company requires putting some real time in to understand the complexity of their problems, their technology and go-to-market strategy before I can offer any meaningful advice.
I wish I had access to the Innevation Center when first starting out in business. A lot of mistakes - that I now understand and attempt to help our companies navigate - could have been avoided. For example, I built products that I wanted, not products that made sense for the market. It wasn't clear to me that even good products needed the support of selling skills. A very complicated and expensive tax structure could have been easily remediated by moving to Nevada. And finally, I could have benefitted from establishing a deeper network of mentors.
It's not easy to develop an idea or build a business; it's an uphill climb. But for those who persist, who lean on and learn from others, who push through challenges and strive for the next milestone, it can be financially and personally rewarding. It's an enticing and energizing journey that many of us just can't get enough of.