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Beautiful Evidence
The Art of the Start
The Bootstrapper's Bible (eBook)
The Business of Software
Guerrilla Marketing
Business vs Finance
First, a plug: I attended the pricing session of the MIT Enterprise Forum’s GET SMART series, and it was great! First, Jim Geisman is a guy that any software entrepreneur wants to spend an hour with. Second, the whole idea of a focused, seminar-like event made tremendous sense.
Now my observation: Even in these events, there is a focus on finance over business. The most popular events relate to raising money, rather than building a business. Three sessions on term sheets? And only one on marketing? Which do you think is going to decide the success of a software business?
Business is about creating an institution. Business is about employees and customers, and the interaction of each to generate value. Finance (at least as it relates to these very popular events) is about getting a third party to throw money at you. It doesn’t happen, except for a very elite (and lucky) few. But I know dozens of entrepreneurs (including me) who spent over a year chasing venture capital and then gave up on the business when unable to get someone to part with money in return for an equity stake. Starting to build the company immediately, one foot in front of the other, doesn’t occur, or it is dismissed in favor of the bigger opportunity.
This web 2.0 thing is obscuring the same underlying phenomenon. Some potential entrepreneneurs are building services, giving them away for free, and hoping that they will be bought out for piles of money by someone who knows how to make money with that service. It’s essentially the same finance-oriented activity, instead of a business-oriented activity. The latter would involve actually monetizing the customers, and building an institution that can stand on its own two feet. That it might realize even higher value later, in an acquisition, or with venture capital backing is nice, but not what should concern 99.999% of entrepreneurs on day one.
(That’s more than my share of foot metaphors, and more rantish than my usual.)
True. Time for me to get back to work building my business.