Inside VT KnowledgeWorks

Another Definition of EBIT - The Accelerated Entrepreneur

A reader e-mailed me today that as she read The EBIT Talk--The Earnings-Before-Interest-and-Taxes Talk--she wondered if no EBIT could be an entrepreneur's obit.

Ha! 

Humph.

Inside VT KnowledgeWorks

On Saturday, August 30, 2008, Inside VT KnowledgeWorks, the VT KnowledgeWorks blog, will have existed exactly three quarters of a year.

Seeking to continue to grow in understanding of the art and science--and the how and why--of business blogs, I sought my valued client's perspective.  I sent Jim Flowers, Director of business accelerator VT KnowledgeWorks, three questions.  Jim answered them via e-mail, 8/26/08.

1) Why did you want a blog written about and for VT KnowledgeWorks?

If a tree falls in the woods and no one is there, does it make a sound?  If exciting and worthwhile things happen in a small college town in southwestern Virginia and no one learns about them, do they really matter?  If people publicize high-tech developments in traditional print media, will Xs, Ys, and Millennials ever get wind of them?  If nobody links to a website, will it ever rise to the top of a Google search?

2) Why did you hire Anne Clelland to write it?

Luck, some wise person once said, is where preparation meets opportunity.  VT KnowledgeWorks needed a blog and Anne walked in the door with a unique combination of knowledge, writing skills, and boundless enthusiasm.  We were a tiny Market with a compelling need.  She brought the Magic and Moxie along with her.  It was an obvious match.

3) What has resulted from the blog?

So far everybody seems to be winning.  VT KnowledgeWorks member companies are getting more electronic press and higher Google ratings.  VT KnowledgeWorks itself is improving its brand.  And Anne has launched a full scale commercial blogging enterprise with good early progress.  Sometimes things just come together nicely.

***

I have tried to find words to express how moved I felt when I read this and how grateful I feel for Jim Flowers.  The best I can do is say that from writing the blog on VT KnowledgeWorks by looking inside from without, I discovered an organization of such power and purpose and integrity that I didn't want to be out any more.  I wanted to be in.  Thank you, Jim Flowers, for accepting my application to become a member company of VT KnowledgeWorks.

New Venture Value

In his 8/8/08 BusinessWeek article Putting a Value on a New Venture:  How to perform a back-of-the-envelope valuation of a business that's still relatively unproven,Tom Taulli writes:

"Sure, there are generally accepted ways to determine what an established private company is worth (BusinessWeek SmallBiz, 4/16/08). But for a relatively unproven venture, the process is really more art than science (some may even think it's magic or voodoo, or just plain craziness)."

When I shared insights I gained from creating a business plan for my new VT KnowledgeWorks company, I wrote, "Predicting revenues reminded me of frosting a fallen cake. One fills in the gap with icing, knowing it will still taste good, and hopes no one notices."

Taulli offers a link-rich, "premoney" and "post-money," comprehensive article on valuing a start-up company.  His ways offer more weight than either magic or voodoo. 

Probably not more weight than my icing.

I plan to learn new business recipes at Concept Camp.

The writer of this blog, Anne Giles Clelland, is a new member company of VT KnowledgeWorks.  She will be attending Concept Camp September 17-19, 2008.  Will you come with her?

Concept Camp is sponsored by Hodges, Jones & Mabry, P.C., a financial and accounting services firm.  For more information on Concept Camp, contact VT KnowledgeWorks Member Services Manager Lindsey Eversole, leversole@vtknowledgeworks.com.

Four Steps to Analyzing a Market

I asked Jim Littlefield for marketing advice for high-tech entrepreneurs.  His reply follows.  Thank you very much, Jim!

The first three of these steps need to be visited and revisited until they are answered sufficiently.  The fourth step may then be evaluated.

1. Choose and analyze geographic markets for the first few years of product/service introduction.  Before going abroad, it may be appropriate to limit introduction to domestic markets until those become strong and are producing a profit.

2. Determine the market size for the geographic markets chosen.  One of the ways to do this is to estimate how many potential customers there are in each domestic market and how much of the product/service each customer is likely to buy/use annually.

3. Answer "What is the competition for this product/service and how well does our product compete in a technological and user need sense?"  Remember, few products/services are unique...in spite of what entrepreneurs would like to think.  By considering the competition, one may narrow the scope of the target market.

4. After completing the preceding three analyses and estimating costs and gross margin one can estimate when it is likely that a profit will be shown.

Jim Littlefield
Professor of Marketing
Pamplin College of Business
Virginia Tech
jalittle@vt.edu
(540) 231-9170

One Minute - The Accelerated Entrepreneur

“Anybody can talk about his or her business for twenty minutes,” Jim Flowers said.  “People will only listen for one minute.”

Breaking news for Concept Camp attendees:  We have to give elevator pitches to each other.  And we only get one minute.

On September 5, 2008, my new VT KnowledgeWorks member company will have been incorporated one month.  A dozen days later, starting on September 17, 2008, I will attend Concept Camp with other aspiring entrepreneurs and VT KnowledgeWorks Director Jim Flowers.

“I try to scare the bejeezus out of them,” Jim said. 

Lovely.

Jim, my spouse, and I were having a chipper conversation at the festive Virginia Tech Corporate Research Center picnic about the failure rate of entrepreneurial enterprises. 

“Jim,” I wanted to say.  “Not in front of the guy with whom I had The EBIT Talk!”

I know what Jim Flowers was saying was for my own good.  Jim wrote in this post, “We’re trying to help people reduce risk; the first step in risk reduction is acknowledgment that it does indeed exist.”

Genteel girls from Virginia were taught not to acknowledge the existence of much of anything except the slope of their shoulders while attempting to stand in a gracious posture at a cocktail party.

Acknowledgment of risk?  That’s akin to acknowledgment of money!  I needed my smelling salts.

Then I saw intellectual property attorney Michelle Mayberry of Latimer, Mayberry and Matthews.

That would be my intellectual property attorney.

Then I saw Peer Segelke, my incorporator from LeClairRyan.

Then I saw Cory Donovan, Executive Director of the NCTC, so personable and full of good ideas that he feels like my high-tech business adviser.

The Great Acknowledgers.  They’re brave.  They readily share their expertise.  As an Accelerated Entrepreneur, I keep running into terms and concepts and ideas and practices about which I know little or nothing.  The Great Acknowledgers ask the hard questions to strengthen me, not weaken me.

Am I bejeezus-scared of what I’ll be asked to examine and acknowledge about my business at Concept Camp? 

Yep.

(Honestly?  Happily ever after would work just fine for me.)

Will my elevator pitch bring all present at Concept Camp to stunned silence and transform them from entrepreneurs to Anne’s venture capitalists?

Not too likely.

Probably as likely as an entrepreneurial enterprise is to fail.

But I’ve reduced my risk.  I listened to Jim’s advice to seek “timely professional assistance."  I've run my ideas by The Great Acknowledgers!

Where's my one-minute timer?  I've got to practice!  I've only got 3 1/2 weeks until Concept Camp!

The writer of this blog, Anne Giles Clelland, is a new member company of VT KnowledgeWorks.  She will be attending Concept Camp September 17-19, 2008.  Will you come with her?

Concept Camp is sponsored by Hodges, Jones & Mabry, P.C., a financial and accounting services firm.  For more information on Concept Camp, contact VT KnowledgeWorks Member Services Manager Lindsey Eversole, leversole@vtknowledgeworks.com.