Inside VT KnowledgeWorks

The Imprecision of Pitching to Angel Investors

Every time I participate in a VT KnowledgeWorks event such as yesterday's Pitch Day - an opportunity for member companies to practice pitching to a panel of angel investors - I find my understanding of my own company and of business principles in general deepening.

Having shoveled a lot of snow this winter, however, I would like to say the deepening comes from a  lot of digging into data, business models, and my own aspirations.

I was among eight companies to pitch yesterday and even though each of us followed the general prescribed format for pitching, during the feedback session, from each of us the panel wanted something else and different.

To this version of a post I wrote for Handshake 2.0 this morning that includes lists of what I am currently finding precise and imprecise, to the imprecise list, I would like to add "pitching to angel investors."

I would also like to acknowledge the insight I have gained as a businesswoman and entrepreneur from Jeff Proco.  Two years ago, he inspired this post, Just Paint.

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Precision and imprecision have been on my mind recently:  the 10 m x 10 m GIS-enabled precision of Rural System’s land and natural resource management system, the imprecision of converting leads to sales, the precision of the anatomy of a 140-character Twitter tweet as described by VT KnowledgeWorks member company founder Z. Kelly Queijo, the imprecision of generating traffic to a web site.

When I doubt the possibility of pairing precision with human effort, all I have to do is look up from my computer and around at the walls of our home.  Jeff Proco painted them with brush and roller, without tape measures, without blue painter’s tape, without error.  Even the corners.

In the beauty that resulted from Proco's precision lies reassuring possibility.

 

 
Jeff Proco heads Pro Painting Company based in Riner, Virginia.  He can be reached at 540-382-6434.

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VT KnowledgeWorks, a regional business acceleration center that helps companies bring ideas to market, will present the Second Annual Entrepreneurship Summit on April 7-8, 2010 at the Inn at Virginia Tech and Skelton Conference Center in Blacksburg, Virginia. This two-day comprehensive workshop is for prospective company founders, entrepreneurs launching or re-vamping a business, growing companies seeking expansion capital, and individuals interested in investing in early-stage companies.

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VT KnowledgeWorks sponsors include Attaain, Inc., BB&T, Handshake 2.0, Harris Office Furniture, Hodges, Jones & Mabry, P.C., Hutchison Law Group, Latimer, Mayberry & Matthews IP Law, LeClairRyan, Science Applications International Corporation (SAIC) and The Becher Agency (TBA).

Entrepreneur Wrangling

During my side of the dinner conversations with my husband in the first months of my VT KnowledgeWorks member company start-up, I regaled him with tales of the new ideas I’d had that day, how I had implemented some of them and planned to implement others.  Known for his appreciative, jolly laugh, he chuckled and praised my innovation and creativity.

After a few months, he laughed less.  One night, after telling him of an idea I’d had and implemented for someone else, he asked, “And how are you getting paid for that?”

I was dumbfounded.  And hurt.  It was an idea.  Ideas are my lifeblood.  Ideas are treasures in and of themselves.  I am an entrepreneur with ideas.

(By the way, we went from a two-income household to a one-income household thanks to my husband’s willingness to be a sweat equity partner in my start-up.  Just an aside.)

My start-up will be sixteen months old at the end of this month and, as many start-ups do, I have taken on clients’ projects at low cost as proof-of-concept test cases.  As a service company, I need my services to work and I need my clients to be thrilled at how they work and at the experience they have while those services are working.  And to glowingly refer those services to others. 

My company has unique services and a unique business model so I can’t point to others’ success to demonstrate my company’s merit.  Other company founders choose other ways, but I have chosen to put my idea out there to test and prove its value rather than wait for others to see its value.  I am risking my time, talent and treasure on others' projects.  I could lose much and gain nothing.

My entrepreneurial clients have each told me recently of new ideas they’ve had.  They would welcome my appreciative, jolly praise for their innovation and creativity.  Ideas are their lifeblood.

I said, “Let’s think about this.  Help me see how that idea will contribute to generating revenue for the project we’re working on.”

What I wanted to ask was, “Why aren’t you putting all your time into the project we’re working on so you can get paid for it, so you can pay me?!”

Oh.  That's why my husband laughed less.

It's just not that simple for an entrepreneur.

I have a very bright friend, married to a very bright husband, who gave birth to three bright children.  “It’s harder,” she says, “with smart people.”

How about with smart people who are creative?  And entrepreneurs?

Sheesh.

The blessing and burden of being a smart, creative entrepreneur is that from the fountain of many ideas also flows the few ideas that turn a trickle of a project into a cascading waterfall.

I know this, of course, because I am an entrepreneur.

How does one wrangle an entrepreneur? 

How does one honor the creative process that generates the business ideas and, at the same time, generate a revenue-producing business?  How does one balance the need for ideas to be unbound with the need for business ideas to be herded in the direction of a revenue stream?

For me, consciousness of this process - and of my husband’s sacrifice - helps me lavish my own praise on a particularly iridescent idea that jets from my glorious fountain of ideas.  Just for a moment.  Then I watch the fountain and reach in for the idea, perhaps less shiny but still colorful, that I think is most likely to generate revenue.  That's the one I implement.

I am a wrangled entrepreneur.

At dinner sixteen months after start-up, my husband and I now share three highlights of our days.  For me, the revenue of a relationship is intimacy.  Unbridled overflow washes us away from each other.  From the fountain of all possibilities, I pluck three plump rainbow trout on which we can feast together.

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Illustration credit:  Steven White

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VT KnowledgeWorks is a unique growth enhancement program open to entrepreneurs in the New River Valley of Virginia and beyond.  Acceleration center and incubation facilities are located in the Virginia Tech Corporate Research Center in Blacksburg, Virginia. 

VT KnowledgeWorks sponsors include Attaain, Inc., BB&T, Handshake 2.0, Harris Office Furniture, Hodges, Jones & Mabry, P.C., Latimer, Mayberry & Matthews IP Law, LeClairRyan, Science Applications International Corporation (SAIC) and The Becher Agency (TBA).

The $50,000 Video

I started a VT KnowledgeWorks member company one year ago.  I have spent that year, as all start-ups do, proving the merit of my product in the marketplace.

The products and services of my company - online public relations firm Handshake Media, Incorporated - emanate from the premise that people are more likely to do business with those they know rather than those they don’t, and that social media - blogs, videos on YouTube, communication and connection tools like Facebook and Twitter - provide opportunities for people to know and get known in new ways, if not in person, then virtually.  No matter how advanced technology becomes, that trust-engendering “It’s who you know,” word-of-mouth referral is still the scrip of business deals.

Perfectly logical to me.  Embraced by early adopters (thank you, my first clients!).  Harder to make happen than I, in all my exuberant, entrepreneurial optimism, expected. 

One year of effort produced for my clients lots of good words and goodwill, more prospects in the sales funnel and more website traffic through all those fragmented media channels - and the sense they had gotten a deal through a social media campaign.  But no direct way to trace it.

I got tears in my eyes when I received the call that one of my company’s products, a video on YouTube, had resulted in a deal.  ROI for my client.  Proof that it works.

Prior to starting my company, I worked in the public sector for a salary of not quite $50K. Since starting my one-year-old company, I have not taken a salary. 

That’s why I call this the $50,000 video.

Update 9/18/09:  Agh.  I learned that the phone call Energy Check received did NOT result in a booking for an energy audit after all.  In terms of ROI, my $50,000 video is now a $0 video.  Energy Check was kind enough to share, “Our clients who look at our website enjoy the video.  We are happy with the PR services we received from Handshake Media, Incorporated, and believe they are increasing our visibility and image as experts in our field."

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For more on the story feel free to visit Energy Check Checks Out the Home of Handshake 2.0.

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VT KnowledgeWorks is a unique growth enhancement program open to entrepreneurs in the New River Valley of Virginia and beyond.  Acceleration center and incubation facilities are located in the Virginia Tech Corporate Research Center in Blacksburg, Virginia. 

VT KnowledgeWorks sponsors include Attaain, Inc., BB&T, Handshake 2.0, Harris Office Furniture, Hodges, Jones & Mabry, P.C., Latimer, Mayberry & Matthews IP Law, LeClairRyan, Science Applications International Corporation (SAIC) and The Becher Agency (TBA).

A Lesson on Entrepreneurship from The Transporter

I am a fan of Frank Martin, the character played by Jason Statham in the action film series The Transporter, who, as I do, runs a business services company based on technology and skill.  In his case, he uses a tricked out BMW and ex-special forces skills to take items, or people, from where they are to where the company wants them to be.  In my case, I use a tricked out TypePad blog and ex-dot com skills to take a company from where it is to where it wants to be.

Same thing, right?

What I respect about Frank Martin is his commitment to what he's doing.  In the opening scene of the first Transporter film, when Martin arrives at the appointed time to take items - this time hooded bank robbers to their drop-off destination - four men, not three, get in the car. 

With bank alarms pulsing, even a gun to his temple, Martin refuses to begin driving.  The deal was to transport three men, not four.

“Rule number one,” Martin says.  “Never change the deal.”

In a rebuttal to “The customer is always right,” Martin reiterates the specifics of the deal.  He explains that he won’t be able to provide successfully the service for which he contracted with the customer if the customer doesn’t meet the conditions by which the contract was made.

The major enterprise of my VT KnowledgeWorks member company is the business news and public relations site Handshake 2.0, which celebrated its one-year anniversary on July 28, 2009.

I was asked the other day why I was writing less often about my experiences as an entrepreneur.  The answer is an excellent one:  Instead of being busy writing about being an entrepreneur, I’m busy doing business as an entrepreneur.

I am, however, continuing to reflect on year one in hopes of, well, increasing the profitability of year two.

The plot of The Transporter thickens when Martin breaks one of his other rules, “Never look in the package,” and I have plenty of life experience to corroborate his findings that sometimes rules will be, and must be, broken.

But when I see Frank Martin sitting in his high-end BMW, refusing to depart, and think of my own repeated gnashings of teeth and self-admonitions to be strict about what I'm doing and why,  I realize the lesson I seem to have the most trouble acting upon, i.e. sitting in the driver's seat and refusing to budge, is this one:

I waste the precious time of my life, lose my integrity and morale, and ultimately disappoint the customer when I try to be and do what the customer wants, rather than who I am and what I can do.

"Handshake" rule number one, then, thanks to The Transporter:

"Stick to the vision."

And, yes, we own all three Transporter movies, and, yes, I have watched them many times.

If you’d like to see the scene I've described above, slide the play arrow to minute 2:23.

The Accelerated Entrepreneur - My Top Takeaway from One Year at VT KnowledgeWorks

Head to toe, mind and heart, Achilles was a powerful man.  Only a few inches below his calf, in just the tiniest square inch in contrast to the vast expanse of his body, he had an insurmountable weakness.  At his own heel, Achilles could be felled.

My top takeaway from one year as a company founder at VT KnowledgeWorks?

I have learned my Achilles heel.  Wounded there, I am felled.

My Achilles heel:  Straying from my vision.

If I do not follow  my vision, I lose heart.

When I lose heart, I can’t go on.

I feel courageous and clear when I have my vision in mind and make decisions, easy and hard, that correspond with or further the vision.

When I give others authority to define my vision, or follow the visions that others think would be better for me - or would be better for them - I lose heart.

Although I listed what I miss being a company founder rather than an employee, I don’t lose heart from it.

Without a salary, I make do.  Before fifty, having a self was of paramount importance to me.  Now that I’m fifty, I have a self and having a mission is self-sustaining.  I do work a lot and I am tired a lot, but if my genes hold out, I’ll have plenty of time to rest as does my 99-year-old grandmother dozing at Warm Hearth.  With regard to becoming a hard and hardened woman, really, I’ve looked into Medusa’s eyes enough to be turned to stone.  I expect triple digit growth in my company as The Crying CEO.

As long as I don’t lose heart.

As long as I follow my vision. 

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Photo:  In a triathlon, the age of the participant is marked on the calf - just above the Achilles heel. 

The Accelerated Entrepreneur - What a Company Founder Can Gain

As I reflect upon one year as a VT KnowledgeWorks member company, I have seen as a company founder that I have both lost and gained.

Here are my greatest gains:

A chance to make a difference.  

When I was an employee of a corporation or an institution, I often felt in the presence of a great expanse of possibility, trapped at the edge, slogging through the muck of meetings, forms, and politics. 

As a company founder, without the permission and, albeit, guidance of a committee, I have built a boat and I have nimbly jumped aboard.  No bureaucracy, no paperwork, no personality workarounds.  We’ve set sail.

Synergy. 

When I worked for another company, the company found the clients and chose the employees.  As a company founder, I don't have complete freedom, but I do have more latitude to find a match between my company’s vision and the clients it serves and the people with whom it works. 

Instead of making a meal from what someone else has put in the refrigerator, I feel like I can go to the Farmer’s Market and select what ingredients will mutually flavor each other to create a world-nourishing feast.

The Accelerated Entrepreneur - What a Company Founder Can Lose

As I reflect on my first year as a VT KnowledgeWorks member company, I see that, as a company founder, I have gained and lost.  Having been both a student and practitioner of entrepreneurship, I know I am sharing an almost universal experience.  Nonetheless, here is my version.

What I have lost or am losing:

Salary. 

I had no idea how much safety, security, freedom, and intellectual power a salary gave me.  Hunters and gatherers created writing only after learning to farm gave them time to contemplate the possibility that a symbol could stand for a thing, even an idea.  Scrabbling to collect revenue, I have so little of that essential seed for creativity:  time for quiescence.

Myself. 

Revenue has an imperative urgency that supersedes all other considerations.  No revenue?  No company.  No company?  No fulfillment of the vision. 

Completion. 

While I have tended my whole life to love work, to work hard, and to work often, when I worked for someone else, I was able to finish the task I was assigned, then stop if I were tired or sick.  I could count on the enterprise continuing without me under the leadership of the owner.

Running a start-up is an ever-unfulfilled task.  No matter what I do, no matter what I have done, more to do awaits. 

And when I am tired or sick and in need of the leader of the enterprise?  I can only look in the mirror.

Softness. 

I remember pulling my car into the parking lot one year ago and almost skipping into the VT KnowledgeWorks building to deliver my membership check.  I was going to start a real company that was going to do real good in the world. 

When I think of the bounced check, the bad handshake, the dark angel investor experience, the sick feeling of choosing business over personal values, the fear, the humiliation, the uncertainty...

When the novice came to the monk and said, “I want to begin the path to enlightenment.  What is your advice to me?” The monk said, “Don’t start.”

I am tougher and harder than I was one year ago.  I cried while I wrote this, but I cry less, and let others know less when I do.  I almost didn’t include that sentence in this post.  In five years, I hope I’m still nice.

Jim Flowers, director of VT KnowledgeWorks, asks member company founders often, "Are you creating the life you want?"

No, sir.

Not yet.

The Accelerated Entrepreneur - One Year at VT KnowledgeWorks

I began Inside VT KnowledgeWorks, the VT KnowledgeWorks blog, in November 2007 to write about the member companies of VT KnowledgeWorks.  I showcased the companies’ leaders, products, services, and processes.  As I learned more about VT KnowledgeWorks, I began to write about the programs VT KnowledgeWorks offers start-ups. 

The readership evolved from VTKW member companies themselves to aspiring entrepreneurs, practicing entrepreneurs, the Virginia Tech Corporate Research Center entrepreneurial companies, the Virginia Tech business, technology, and entrepreneurial community, and the technology companies and their service providers in the region.

To provide further value to the blog’s readership, I added posts with links, sources, and quotes from experts on best practices in entrepreneurship.

Because search engines list blog posts in search results, the readership of Inside VT KnowledgeWorks is now global.  Inside VT KnowledgeWorks was included in a top list of 150 blogs for entrepreneurs.

One year ago, in June 2008, I joined VT KnowledgeWorks.

As does attending a performance of A Midsummer Night’s Dream - which makes one a) an audience member b) watching a play c) which includes a play - reading Inside VT KnowledgeWorks offers an inside story on a) VT KnowlegeWorks, b) entrepreneurship, and c) my own VT KnowledgeWorks member company.

In keeping with the expansion of VT KnowledgeWorks from a technology incubator to include a business acceleration center, most of the posts I’ve written about my experience as a VT KnowledgeWorks member company I’ve labeled under the category The Accelerated Entrepreneur.

The process became, at times, so accelerated I didn’t take time to write about it.  I just did it. 

So, to summarize and offer a progress report, I will share my reflections on one year as a VT KnowledgeWorks member company in the next few posts.

Content Businesses

Have I mentioned that, so far, the enterprises of my VT KnowledgeWorks member company, Handshake Media, Incorporated, are content businesses?

From 10 Lessons from a Failed Start-Up by Mark Goldensen writing for the New York Times:

Content businesses s--- (or: do it for love and expect to lose money). Producing quality content every day is a herculean task, especially live. The idea of creating both the content and technology for PlayCafe seemed achievable, but TV networks focus on distribution and studios on production for good reason: both are hard. Dev and I knew we were production novices but we thought live-filming a pretty girl delivering trivia with one camera guy was simple enough. We were wrong; the business was beyond our pay grade.

Watch American Idol, the country’s most popular show, and you’ll see how often they s--- up despite massive resources: sound and video fail, hosts and contestants stammer, camera angles are wrong, stretches get boring, and it happens despite a reality format that is simpler than live sports or news. They also don’t have to deal with DOS attacks, server downtime, scalability, or customer support like we did.

I would advise any entrepreneur or investor considering content to think twice, as Howard Lindzon from Wallstrip warned us. Content is an order of magnitude harder than technology with an order less upside; no YouTube producer will earn within a hundredth of  $1.65 billion. This will only become more true as DVRs and media-sharing reduce revenues and pay-for-performance ads eliminate inefficient ad spend, of which there is a lot. The main and perhaps only reason to do content should be the love of creating it.

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"Content is an order of magnitude harder than technology..."

Not sure if I agree completely, but I sure appreciate the thought.

Have I mentioned that how I feel about content is beyond love?  O, it's passion.

The Accelerated Entrepreneur - What Are We Going To Do?

Having written a business plan in the morning, only to find it obsolete in the afternoon, when I was asked by a prospective intern for Handshake Media, Incorporated, my VT KnowledgeWorks member company, "What are we going to do?", I was speechless.

Do?! We're going to do everything!

Business model tweaking, business strategy execution, business development, networking meetings, client appointments, product creation, product quality assessment, bookkeeping, human resource management...

Pick up a textbook on the principles of business.  All of that.  That's what we'll be doing.

"In what order are we going to be doing all that?"

Uh.

I know that a list of goals, measurable objectives, and activities, delineated by a timeline, must be created for a course of study for an internship.  

We can use one of my obsolete business plans from yesterday to create the goals and objectives.

The activities?

I think I need an interactive interface, perhaps created by interface expert Joshua Eckstein, founder of VT KnowledgeWorks member company Agent Computer. 

I think that's the only medium which could convey the activities of an internship with an entrepreneur.

Do, think, see, hear, check gut instinct, choose - simultaneously.