March 2014

You’ve Got the WHO. Now WHAT?

Last Thursday, I said your success as a startup founder depends a lot on you being crystal clear on WHOM you (your product and service) serve. Let’s allocate 40% weight to this.

So you say, “Allan, I’ve got the WHO down pat. I can picture her. I know her pains. I can feel her frustrations with this problem. I’ve seen and heard her curse aloud as she struggles with this problem. She’s starving for a solution that works – or one that sucks less than is currently available. Now what?”

Good question. I thought you’d never ask.

The next big piece (another 40 percent-er) you need to figure out is the WHAT you offer to your WHO.

As an entrepreneur, you’re wired to start and focus almost exclusively on the WHAT – your product, service, website, widget, whatever. We see this every day:

My product will revolutionize the industry.”

It’s the best thing since the iPhone

It’s a Facebook killer.

Big mistake. Don’t do that.

Start with WHO. Then follow with WHAT. Don’t believe me? See what Seth Godin says here about first starting with a tribe.?Got that? Great.

So WHAT do you offer your WHO? Is your product and service a dream-come-true solution to your WHO? Does your WHAT make a meaningful difference to your WHO? Will the dog,?as we say in the industry, eat the dog food?

The classic mistake to avoid here as you build your WHAT is keeping it under wraps – in beta or stealth mode – forever while you tinker away and burn your investors’ cash.

Once you have a version 0.1 of your product and service that works decently, launch AND charge for it. Free lunch is for losers.

Then keep your ears to the ground and observe your WHO as they interact with your WHAT. Take in every feedback as data and move on to version 1.0 of your WHAT.



Calling All Female Founders

It?s simple. We need more female entrepreneurs.

I?m not speaking in terms of just NewGate Capital Partners or even Florida for that matter. The WORLD needs more women business leaders and one great way of getting there is by starting at the point of origin – ?start-ups.

My team and I hear dozens of pitches per month and I would surmise that 1 out of every 12 or so has at least one female co-founder. This is mostly anecdotal evidence due to our current lack of analytics on deals we pass on?something we plan to improve in the future.

Our portfolio has a little better ratio with 5 out of about 30 companies having a female co-founder. These numbers seem a little more consistent with what I hear and read about in the industry.

BUT? (there?s always a ?but?, right?)

Women represent roughly 50% of our population, give or take a few points depending on where you?re currently sitting. By law of averages, that would suggest that we should be seeing a similar ratio when it comes to start-up founders. So why is this not the case?

Much has been written about the perceived bias against women in the venture capital community. ?Look, there are always going to be biases. They are a fundamental construct of human nature. Some are innate and some are gained through past experiences.

Whether this bias exists or not–and the depth of its roots–I am not certain. I do think that any VC willing to pass on a deal based on the gender of its founder won’t be in business much longer. I, myself, tend to have a slight bias towards women founders–which is really not the goal either.

I have found that women tend to show more resourcefulness (on average) than their male counterparts. Thus, they are usually exceptional boot-strappers, a key quality when running a lean start-up.

Are they this way out of necessity or are they genetically wired differently? I don?t know.

I believe the latter to be more the case. And if, ultimately, our goal in all of this is to find clever solutions to tough problems, couldn?t we use a fresh perspective?

There have been immense strides recently with the establishment of women-centric tech conferences and funding for STEM programs for women. Not to mention the in-roads made by the likes of Marissa Mayer, Sarah Blakely, Susan Lyne and others.

All I know, is if we are going to continue to grow and solve the world’s most challenging problems, it is going to take the sweat and brains of all of us.

I look forward to seeing what the great women in our community have in store.

Ready for Entrepreneurial Independence?

You are ready for Entrepreneurial independence if you:

1. Take chances on your dreams and quit working for Corporate America.

Simply say to yourself, “No more renting myself for a paycheck, it is time to make things happen!”

2. Eat, sleep, and dream your startups or potential startup.

You begin to neglect your daily corporate duties because you are constantly thinking about ways to bring your idea to life.

3.Have some kind of support.

Your friends and family have knowledge of your commitment and are ready to advise, support, and guide you when needed.

4. Are different.

Unlike many, you have the ability to spot opportunities and issues that may arise.

5. Are ready to live cheap.

Entrepreneurs need A LOT of patience and will to take a financial hit for quite some time.

6. Are here!

If you are reading this then you know it is time for you to jump the ship.



Are you strong enough to ride the Entrepreneur Rollercoaster?

Entrepreneurship is not for everyone and certainly not for the weak hearted. If you do not want to rent yourself to the corporate world but create something from scratch, then entrepreneurship is for you.

Being an entrepreneur means patience, sacrifices, and the willingness to work for as little as nothing until success is reached.? The Entrepreneur Rollercoaster provided by David Hauser from ?is a quick illustration of the amazing and challenging journey every entrepreneur faces. Can you handle it?



Click here for more information on our Entrepreneurs.

The ONE Question your Startup Must Answer

Josh has had it. He wasn’t going to take it anymore. His people had driven his predecessor nuts and were getting warmed up for an encore with him.

Finally, he did what great leaders do. He set a definite future course, drew a line in the sand, and asked of Israelites: “Choose you this day whom ye will serve.”

And there you have it: the pivotal decision every effective marketer and business builder makes.

If your startup is going to have a chance in the marketplace, you have to ask the ONE question at the core of this decision:

Who do you serve? Who IS your customer?

Here at NewGate, we spend about 80% of our time listening to pitches from?entrepreneurs and investors – the one for capital, the other for the next big idea to fund. At some point during an entrepreneur’s pitch, one of us will usually pose the question: so, who is your customer? Who are you building this product or service for?

Then we all shut up and wait for the response. In the ensuing pause, I would usually send a silent prayer upstairs: Pls Lord, don’t let her say “everybody.” Here’s why: if you answer “everybody” to that question and act on it, it’s game over. You might as well pack it up, return your investors’ cash, buy yourself a Slurpee and go get a job.

No business serves everybody. Scratch that. No great and effective business serves everybody. Not Google. Not Walmart. None.

It doesn’t matter if you’re selling air itself. Some people will prefer organic air; some, air made in China; and some would demand strawberry-scented air.

Before your ideal customer chooses you, you have to first choose her. (Note: not THEM. HER). One living, breathing customer with a need or want and the ability to pay for your product or service. Find her, fall in love with her and her frustrations with the problem you solve, and become her dream-come-true solution provider.

So, I ask you today: who IS your product and service designed to serve?