Nananap #23 – How big is my jigsaw?
“ … Is this all I need …”
#23 – How big is my jigsaw?
So I reckon the really big ideas naturally live in uncertainty – IF I knew what I was doing then probably it is not a big idea………
One image I have used is the jigsaw: Seems to moi that a start-up has to identify the key pieces, and then the success is limited by the weakest area
So all bleeding edge start-ups need at least the following ( in the following rough order of importance?):
- At least 1 passionate founder, but if there are more than that then ALL founders must be passionate – I call em “pizza @ 2am people” see post #2
-
A big idea – something bold and scary – but hopefully simple!
- Intellectual property, present or achievable: ………… patents, sharp brand, PR angle of merit, biz relationships, ………
- Adequate money (and this is helped by a very very low burn rate!)
The above seems a minimum set, and IF any is weak/missing then that is a real problemo!
Nuf
Simon
www.type-any-circle-of-six.com | www.pukugolf.com
Notice: This blog is just personal thoughts, exploration, opinion, and observation …. and should not be taken as being accurate or even sound advice!
Nananap’s Daily Q #22 ….. “Gov-duck-o-philes beware: Is this your end game? “
“ … But at least my feathers are tidy …”
Nananap’s Daily Question #22 ….. “gov-duck-o-philes: Is this your end game? “
Yesterday I wrote about gov-ducks ……… Here’s the crunch – gov-ducks take energy, time, and a very tidy, status-quo, mindset.
BUT fantastic bleeding edge companies will in my humble opinion almost NEVER come from people who are pedantic about crossing the corporate “t”
eg: The Google founders didn’t even have a company to deposit their first investment!
So investors and shareholders – Which is the better company for YOU to invest in?
- A duck company, with modest ideas running a me too biz plan
- A non duck company which is looser in the corporate governance and systems, but has a VERY big horizon, and has people with great ideas and bigger passion!
For most investors the answer is #1 a duck company!….. go the ducks! ……. but for a brave few #2 is where they will place part of their investment portfolio. (But if you do then please be patient and supportive or just don’t bother!)
Nuf
Simon
www.type-any-circle-of-six.com | www.pukugolf.com
Notice: This blog is just personal thoughts, exploration, opinion, and observation …. and should not be taken as being accurate or even sound advice!
Nananap’s Daily Question #21 ….. “How are your gov-ducks?”
“ … Go the ducks …”
Nananap’s Daily Question #21 ….. “How are your governance ducks?”
So in a pre-revenue start-up there are way too many things to do. As founder or key person the BIG things are what get your attention
- What is our unique angle with our product or service?
- What makes the biz model potentially sustaining? (timing, brand, distribution, contracts, patents, people…..)
- What are the bits of the jigsaw we have and need (especially finance!)
However people out of the loop – particular ex employees and impatient shareholders – overestimate what one person, and a small team can do, and can pay attention to governance and procedural oversights, and – frankly – cause mischief. Whether they are right or wrong becomes irrelevant as every letter, or regulatory complaint sucks time and energy from an already under resourced company! – Sad but true.
Yes, they may be shooting their investment and the companies prospects in the foot (which may be their goal – sad but possible!), and may sometimes even be inaccurate, or overstate in the companies errors, when they complain to the “authorities”, but they do have rights, and greviences and they will persist ………………………
In a better world I would have known what I know now 5,4,3,2,even 1year ago!
So here’s my 2c – take some advice and try to get the governance ducks lined up
What to do if it gets messy? _ Frankly all you can do is what you can do -Try peacemaking which may help, but for myself I can sleep pretty easy if I know:
- I have done everything honestly
- I have done everything to assist the company
- I have done every thing to the best of my ability
- I have put all my financial resources on the line
Nuf
Simon
www.type-any-circle-of-six.com | www.pukugolf.com
Notice: This blog is just personal thoughts, exploration, opinion, and observation …. and should not be taken as being accurate or even sound advice!
Nananap’s Daily Question #20 ….. “Who is bad John Ruggles?”
“ … You cheated John! …”
Nananap’s Daily Question #20 ….. “Who is John Ruggles?”
Bad John Ruggles was a sneaky politician who reorganized the patent laws in the USA in 1836 – renumbering them – thereby making sure his own patent was number 1 – nice work John!
Actually the first patent was 1790
Which brings me to my topic for today:
Ego and Patents – It seems these two things have been linked from the beginning …….. but WARNING! ego is a problem for patent progression as it can make you waste time energy and money!
As I get to each decision point in patent progression I try to let go of :
- ego and
- how much we have spent to date
and ask “is the patent going to be a great patent” - if not – my advice is STOP spending, and look for an idea which is clean!
Nuf
Simon
www.type-any-circle-of-six.com | www.pukugolf.com
Notice: This blog is just personal thoughts, exploration, opinion, and observation …. and should not be taken as being accurate or even sound advice!
Nananap’s Daily Question #19 …. “You gotta team?”
“ … Hey team _ who’s for a nananap? …”
Nananap’s Daily Question #19 ….. “You gotta team?”
Here’s a tricky situation for a cash starved start ups …………..
Imagine – you are raising capital and are faced with two fairly clear alternatives – some money from people who you have little empathy with, or no/less money but involvement with people with passion and action suits on!
Tricky eh and there is no magic answer but generally I reckon if you have the right team ………..the money or money-less solutions will arrive…………
Once a few years back I met two people in the space of 2 hours – one with $300,000 to invest (and no vision) and the other with vision, skills, and time (and no money to invest). We ran with the later – and never regretted that!
Anyway _ from a lack of money can come great results – Sir Patrick Hogan admits he bought his champion sire Sir Tristam because he had very little money to shop with………
Nuf
Simon
www.anycircle.com | www.pukugolf.com
Notice: This blog is just personal thoughts, exploration, opinion, and observation …. and should not be taken as being accurate or even sound advice!
Nananap’s Daily Question #18 …… Hockey stick graph? = in your dreams mate?
upside
Nananap’s Daily Question #18 …… Hockey stick graph? = in your dreams mate?
I have heard a few VCs say ” in all my years I have never seen any start up deliver a hockey stick sales or profit chart” (nodding heads and laughter in audience)
Here’s my take – Very few start ups will actually deliver the hockey stick, perhaps <1%, but the kicker is they do not need to to be very successful …
An example from an information memorandum I reviewed recently:
- $30million profit pa in 5 years, on a pre-money valuation of $5million today.
- Uses a number of discount rates in the discounted cash flow of between 35% and 55%.
- 1st sales contract recently signed with multi-national already (thats a tick big time).
- Some patents to hand and in process.
If that company does just 20% of the hockey stick graph it would be worth say 10(P/E) X 6(20%) or $60million from a post money start of say $7million. It isn’t a “Google” – but an IRR of about 50% per year is better than government bonds in Japan.
So my take is: The hockey stick can not be commented on in isolation – it needs always to be considered in relation to the discount rate and proof of concepts available. In the end it is only a hint of ridiculous upside possibility and not a measure for a successful outcome.
Nuf
Simon
www.anycircle.com | www.pukugolf.com
Notice: This blog is just personal thoughts, exploration, opinion, and observation …. and should not be taken as being accurate or even sound advice!
Nananap’s Daily Question #17 …… Who would you pay 2million to lunch with?
“ … Hey Leo – want to meet at Subway? …”
Nananap’s Daily Question #17 …… Who would you want to lunch with?
So in the news: “A Chinese investment fund manager Zhao Danyang of the Hong Kong-based Pureheart China Growth Investment Fund won lunch with Warren Buffet, with a bid of USD $2,110,100.”
OK so I think I would want lunch with Leonardo Da Vinci – What amazes me is the range of things he worked on in just one lifetime ……….. I am in awe!
Nuf
Simon
www.anycircle.com | www.pukugolf.com
Notice: This blog is just personal thoughts, exploration, opinion, and observation …. and should not be taken as being accurate or even sound advice!
Nananap’s Daily Question #16 …… How big is the damned cake?
“ … I hope this is big enough Bette …”
Nananap’s Daily Question #16 …… How big is the damned cake?
For me I like a couple of things in an idea
- simple (cos I am no rocket scientist!)
- solving real problems for a lot of people
- doing good (making people healthier, safer or happier, or assisting “Planet Earth”)
- something that interests me
So if an idea meet all these tests which are really about passion and competence, ( WANT to do and CAN do“ ) then the last test is – “does it make financial sense?” because if it doesn’t then I will go bust, …… and take investors with me ….
….. So this is all about the cake size:
Can YOU really grow a BIG ENOUGH cake in this idea in a REASONABLE TIME - so that you and your investors don’t give up!
Nuf
Simon
Credit: go to www.jimcollins.com for a lot of wisdom about this area! – Go Jim – write some more books PLEASE
www.anycircle.com | www.pukugolf.com
Notice: This blog is just personal thoughts, exploration, opinion, and observation …. and should not be taken as being accurate or even sound advice!
Nananap’s Daily Question #15 …… Have you thought upside down lately?
“ … I want to meet the architect …”
Nananap’s Daily Question #15 …… Have you thought upside down lately?
Yesterday I mentioned that each day a great idea will come close to me ………. it may even be a Google scale idea like backrub. One way of helping ideas arrive is to re arrange things, or change the relationships, and see what nonsense you get – I’ll call it upside down thinking
Bear with me because most of these things will be silly …. but without any editing here are 3:
- “I open the car door and get into the car” >>>> “The car is open and it surrounds me”
- “The airplane taxis to the end of the runway” >>>> “The launch device slides under the plane”
- “There are 104 keys on this keyboard” >>>> “There are as many keys on my keyboard as I need”
Ok I am going to say #1, and #3 are pretty weird but I find #2 interesting …
Nuf
Simon
www.anycircle.com | www.pukugolf.com
Notice: This blog is just personal thoughts, exploration, opinion, and observation …. and should not be taken as being accurate or even sound advice!
Nananap’s Daily Question #14 …… What has just passed me in the night?
“… where/what/who …”
Nananap’s Daily Question #14 …… What has just passed me in the night?
Today a great idea will come close to me ………. it may even be a Google scale idea like backrub- Sounds silly but if I am not awake to the possibility I sure won’t see it.
But here are a couple of things I reckon:
- Oftentimes the idea will not look that big to start with.
- With 1000s of ideas to work up internally don’t worry about the big guys! Yes Google can do anything, and we used to joke they could create our little web start up www.anycircle.com by lunchtime! … but fear of the “big uns” will just stop me doing anything …
- Consider history for a moment:
- IBM missed the operating system and the processor!
- Yahoo missed buying Google.
- Microsoft missed the internet.
- The metal golf driver was invented in the 1930s, but took 60 years to arrive.
- The land speed record was held by an electric car.
Nuf
Simon
