JAMES CORMAN’s message to AU i2v participants, October 14, 2011

Topic: “How to Start a Business”

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Four steps to starting a business

THINK BIG
- If you start your own company, you will need someone else's money
- Therefore make it an attractive investment....if it works, every investor is going to make a lot of money…this is the secret of attracting investors to your business
- Studies show that the likelihood of success is the same for big markets and small markets so GO FOR THE BIG MARKETS
- There needs to be a hook to attract funding for the investment opportunity you want to create
- Think big not only for yourself and investors, but also for the management team and allies you expect to recruit
- If you want to do something small, then recognize that you will likely be working alone most of the time without investment from others…it will be a job for you
- You can create a company or just create a job for yourself...if you are creating a company, you must think BIG!
WHAT IS BIG?
- Could this company be worth 10 million dollars in 5 years? 5 million is okay, but marginal...
- You will need a Big competitive advantage: you will have to BEAT the others in your industry
- Why would anyone buy your product versus your competitors’ products? Without a compelling answer to this question you will not be competitive and attract potential investors.
START SMALL
- Reduce risk --- no matter how good a business plan is, think that it could become obsolete before it comes out of the printer
- Mistakes are inevitable and starting small helps make the impact of the losses from mistakes small and manageable
- Small also means your team...keep the team small --- In the early days, everyone must multi-task
- First hire someone who will generate revenue...then hire your accountant.
- You must play the role of the first Chief Financial Officer; therefore learn and understand finances.
GROW FAST
- Once you see demand growth, get lots of investment money to keep up with the growth because the window of opportunity for growth is short (time wise)
- Whatever your business is doing today is going to work differently in five years...technology is moving too rapidly as well as consumer behavior.
- Whatever your business is doing today is going to work differently in five years...technology is moving too rapidly as well as consumer behavior.
- Do not just grow gradually and organically at a slow pace... when you get something that works, growth is evident, you go after it; grow as fast as you can.
MAKE AND IMPLEMENT DECISIONS QUICKLY
- Go after things while others are taking their time making decisions
- Failure resulting from a bad decision...it is just one step closer to the right answer
- If you do this and make wrong decisions, you will FAIL QUICKLY and learn from it quickly
- “NO DECISION” is a decision also. “No decision” may be the worst decision option – a bad decision that fails quickly, early in the life of the business is desirable...if you fail quickly...see the mistake, acknowledge it and learn from it. The right decision or approach will reveal itself after failing quickly.
CONCLUDING REMARKS
SKILL SET THAT PEOPLE SHOULD HAVE TO ACCELERATE entrepreneurial SUCCESS
1. Tolerance for taking risks: an entrepreneur tries to minimize risks, but also embraces risks—there needs to be a balance
2. Take initiative and be confident…believe in it—if you don't believe in yourself, who will? If you don’t believe in yourself, why would investors believe in you?
3. Maintain balance between work and home life; a new business could be very demanding on your time
4. Be an effective communicator
5. Be a leader
6. Be tenacious - DON'T GIVE UP
  - Tenacity in your business - don't give up, try something else
  - Tenacity in your attitude - recycling of passion even through failures
  - My first and second companies failed, but I continued.
  - “Never, never, never, never, never, never, NEVER GIVE UP!" Prime Minister, Winston Churchill, 1941 – in a speech during WWII when Hitler was rolling and invading everywhere – while England was independent and facing Hitler’s assault.

Draft outline of lecture prepared by Leslie Grill, October 14, 2011

Last Updated: Oct 27, 2011