April 2014

Why That Ex-IBM Exec Could Be One Giant, Cash-Guzzling Liability to Your Startup

Picture this.

Young, starry-eyed startup founder comes in to pitch investors for funding.

He clicks crisply through his deck. He describes his product (patent-pending, of course), its features, benefits, and how 1% market share is enough to place everyone in the company on the Forbes list of richest people in the world.

Then the team slide comes up on the screen and the entrepreneur puffs up his chest, clears his throat, and announces that (just so you know) the CTO (or some other C-Suite position) of the company is an ex-IBM executive (or an ex-HP executive, or any other big, public company).

He pauses and looks around the room proudly. Almost as if he was expecting a standing ovation.

Oh, by the way, the company has raised $20 million so far, burned more than 50% of that on overhead (logo design, focus groups, salaries, and such), and hopes to have a minimum viable product in 24 months. Just as soon as this round of funding is completed.

See any problem with this picture?

Several actually. Let?s address just one today.

If you haven?t taken your product and service to market, if you do not yet have product-market fit, hiring an ex-Google COO to impress potential investors will almost certainly spell doom for your startup.

Here?s why.

One, your startup IS NOT a smaller version of a big, public company (HT Steve Blank). Your social media startup and Facebook are two totally different animals. One is a cute, needy kitten; the other is a full-grown lion. Your startup (the kitten) has different needs and needs a different set of competencies than a fully-functioning company.

Second, drawing from one above and quoting Ben Horowitz in his must-read book, ?the job of a big company executive is very different from the job of a small company executive.?

To a big company executive (used to big budgets), that $2 million you plan to raise to take your product to market is just furniture allowance.

Former big company executives come with big company habits that could be deadly to your startup. Habits like sending everything to focus groups, analysis paralysis, bureaucracy, ego mania, and waiting for things to happen instead of making things happen (among others).

Bottom line: buyer beware.

Yes, you might need an Eric Schmidt or Sheryl Sandberg for ?adult supervision? However, hire one with your eyes wide open and only when your startup has taken off and is approaching cruising altitude.

Lumz N’ Blooms Acquisitions Done by IMD Companies

Source: PR Newswire April 10, 2014

iMD Companies, Inc., Closes Acquisitions with Lumz’nBlooms, Ltd., a Manufacturer of Specialized CommercialAgricultural, Indoor Gardening and Hydroponic GrowingEquipment to the Medical Marijuana Mark

TAMPA, FL,?April 10, 2014?/PRNewswire/ -?iMD Companies, Inc. (OTC:?ICBU) Board of Directors are pleased to announce they have closed these acquisitions from Lumz’n Blooms, Ltd. a Manufacturer and distributor of products and services for commercial and private growers.? General terms of the deal include a cash component to be paid by iMD Companies, 10 MM shares of restricted stock and incentive bonuses based on performance.? Founded in 2006, Lumz’n Blooms, LTD. has a grown its business year over year and generated revenues of over?$2 million?in 2013 with positive cash flow.

These acquisitions will enable Lumz to meet its growing demand and expand iMD’s footprint in the emerging “growers” market. Lumz brings expert staffing as well as an established and solid customer base to the iMD. And will provide a “core” operating business.?? The capital infusion and corporate support will allow Lumz to take advantage several lucrative opportunities that have evolved as a result of successful marketing efforts.?? iMD’s and Lumz goals are extremely complimentary and these acquisitions should add significantly to both revenue and earnings going forward.

Lumz’n Blooms, LTD.’s main products allow consumers to “Bring the Sun Indoors”.? Lighting, ballasts, growing materials are considered the “Pickaxe and Shovel” of the “Green Rush”.? Over the past 7 plus years Lumz’n Blooms has developed strong distribution channels and today counts?Central Garden and Pet, HomeDepot.com, Amazon Prime, Bi-Mart, Orchard Supply?as well as hundreds of independent Nursery, Hardware and Hydroponic Retailers among its customers.? These established distribution channels, combined with their extensive product line and industry knowledge, makes Lumz’n Blooms a foundational acquisition for building future growth.

“Our goal is to have Lumz’n Blooms, LTD. products be the most widely distributed brands in the industry and first on the shelf at mainstream retailers. Large retailers have realized the magnitude of this growing market and are contacting Lumz to fill the gap,? iMD provides us the platform required to make this happen”, stated?Brian Tucker President?of Lumz’n Blooms, LTD For more information go to??www.TuckersPride.com?and?www.InHomeGardening.com

Larry Robertson CEO of ICBU stated, “This acquisition will give us the opportunity to expand our product lines directly into the mainstream market for indoor Hydroponic growers, and Indoor Gardens. By owning Lumz’n Blooms, we will exponentially increase our distribution channels for both the Lumz products as well as the EMC-5000 systems, which is the flagship product of R-Quest Hydroponics, our joint venture with Anything Technology Media, Inc. (OTC:EXMT). ?This acquisition will enable Lumz the ability to expand its presence at trade shows, provide co-op advertising for major retailers, support retail trials, promote product through print, social and other media outlets, develop POS displays, as well as new product development. “This will afford Lumz the ability to expand its presence at trade shows, provide co-op advertising for major retailers, support retail trials, promote product through print, social and other media outlets, develop POS displays, as well as new product development.”

About iMD Companies, Inc.
iMD Companies, Inc., (OTC MARKETS: ICBU) is a?Florida?corporation, engaged in the medical diagnostics and health industries.?The company is has recently re-positioned to be a holding company for acquisitions in the medical and marijuana industry.? Recent acquisitions in those areas are R-Quest Hydroponics Inc. and Greenlinks Inc. Currently the primary products and services lie in the health and medical diagnostics markets. The company and the principals of the management team have extensive backgrounds in finance, new technologies, manufacturing, marketing and distribution.?? ICBU’s goal is to create and increase shareholder value by tactically growing our core Hydroponics business while strategically seeking to acquire new businesses and create other business alliances, which generate increased revenues and earnings.

About R-Quest Hydroponics, Inc.
R-Quest Hydroponics, Inc., is a Hardware and Software Manufacturing Company with its headquarters in Placerville, California.? R-Quest Hydroponics, Inc. has developed the new Environmental Master Controller EMC-5000 system, which is able to provide constant management for grow room facilities for indoor gardens. The EMC-5000 was developed so that growers can rest easy with the confidence that their crop is in excellent hands. The EMC-5000 is able to regulate and control all aspects of an indoor grow system, including Light cycles to optimize growth, Fans, Nutrient pumps, and CO2 level controls to help manage grow rooms. To see more information on the EMC-5000 go to?www.r-questhydro.com?.


SOURCE IMD Companies, Inc.


Copyright 2014 PR Newswire

Business Investment Questions Answered

So the other day the founder of one of our portfolio companies did a business investment product demo before some investors.

Impressed with the product, the investor, however, observed that the product might be too clunky for shipping. He wondered if it were possible for a product to fit a certain shipping parameter that he was sure would give the already-impressive product another edge in the market.

As told by Brett, everyone agreed it would be worth the founder’s time to explore possible solutions to address the investor’s suggestions. Then the product demo was continued and wrapped up.

This was at about 4 pm.

By 2 am the following morning, the founder had the answer for the business investment questions.

He has completely re-invented the product?to fit the ideal weight and shipping parameters required to take the product to market.

The founder was following in the footsteps of the best WHY-driven entrepreneurs. His WHY is iron-clad. He has seen his target market’s future and his product is a bridge to that future.

For this founder, with such a strong WHY, the HOW is a matter of time, resourcefulness and focus.

How about you? Have you figured out your WHY yet? Why are you building your product, service, and business? (Hint: I hope it’s not just because you see an opportunity to make fast money).

Here’s why having a strong enough WHY is imperative to your startup’s survival:

Starting a business investment from scratch is hard and risky work. If it were not, every employee in Dilbertville would start one. When all hell breaks loose (it’s payday and your account is in the red, a key client cancels and leaves a gaping hole in your projections, the current iteration of your product fails, your spouse gets jealous of the time you are spending on the business and call the nearest $99-divorce lawyer), your WHY might be all you have left to see you through.

If your WHY is strong enough, no HOW can stop you.