Are You Sure You Want to be an Entrepreneur?

On the orders of Spain’s Queen Isabella to bring back riches, Christopher Columbus set out for uncharted waters in 1492. While discovering vast new lands assured his place in posterity, Columbus’s real triumph was uncovering vast beds of oyster pearls off the coast of Venezuela, a rare natural gem that the queen coveted beyond all else. The “pearl rush” that Columbus started way back when is not unlike the rush to entrepreneurship underway today, a surprising outcome in a challenging time.

And more to the point, the beloved pearl provides a lustrous metaphor for the joys and pressures of entrepreneurship, something I’ve discovered personally and as a result of recent interviews with the founders of four start-ups. Though each of the entrepreneurs I interviewed offered pearls of wisdom worthy of an entire article, this provides a deeper dive into the collective mindset of entrepreneurs, especially the type of founder that is prepared to bootstrap their company from inception to market introduction.

It takes an irritant to get started

OpenInvoWhile the proverbial “grain of sand” is a myth according to Wikipedia, it does take “an irritating microscopic object [to become] trapped within the mollusk’s mantle folds” for a pearl to get started. For entrepreneurs, the irritant can be as simple as personality type. According to Emily Lutzker, the founder of OpenInvo, an innovative resource for idea generators, “I only had one ‘real job’ once and was told I was disruptive in the workplace,” thus necessitating her entrepreneurial journey.

BennuSometimes the irritant hits the founder personally. Ashok Kamal, founder of Bennu, explained that, “like any good business, the idea behind Bennu was born out of a problem–the obscene amount of garbage being dumped into landfills.” Jeff Stier, got the idea for the voice tagging utility called Blurts after a voice message from his daughter was annoyingly and irretrievably deleted. And Jesse Middleton, founder of GetMinders, a service that reminds people when to take their medicines, got the idea when thinking about his grandfather who has Parkinson’s and the toll it was taking on him and his family.

Growth usually requires outside help

It was the rarity of natural pearls that made Columbus’s discovery so important in the 15th Century. Today, more than 99% of the pearls sold are the result of human intervention through a 20th Century process known as cultivation. Not surprisingly, entrepreneurs are almost always dependent on the help of outside resources, both in terms of capital and expertise. What is surprising is how many boot-strappers find those resources close to home from friends and family. Noted a grateful Lutzker, “I didn’t ask for money, [friends and family] volunteered.”

GetMindersOutside help also comes in the form of advisers who can add layers of experience. Offered Bennu’s Kamal “You can avoid a lot of unnecessary mistakes by establishing an advisory board from the outset.” “It’s easy to neglect this task in favor of immediate concerns but once we recruited seasoned and candid advisers, Bennu become much more efficient and productive,” added Kamal. In Jesse Middleton’s case the critical advice was more home grown, as his “wife gave [him] a kick in the ass to really get the ball rolling!”

Success has its own measurement scale

As long-time leaders in the pearl trade and the first to patent a cultivation process, the Japanese also established the unique weight measurement scale for pearls known as momme. For modern day entrepreneurs, measures of success tend toward the benevolent, hoping that their products and services make the world a better place. Explained Lutzker, “I’m a bit of an idealist and I want to live in a world that fosters and rewards things that make us human and celebrates our differences.” Added Middleton, “getting our product in the hands of millions that need to remember to take their medicines would be pretty amazing for us.”

BlurtsMany entrepreneurs share the ability to see beyond the making of their first “pearl,” measuring success in terms of helping others grow their own. Offered Kamal, “I hope the business will outgrow its founders so at that point, personal success would mean being in a position to help aspiring entrepreneurs to achieve their dreams.” Similarly, Middleton noted, “I’d like make it to a point where I can invest in other’s ideas that can make the world a better place.” Added Lutzker, laced with the irony that bedevils boot-strappers, “I’d like to think that success is still a starting point, not only a result.”

You still have to beat the odds

Naturally occurring pearls of a decent size are literally one in million. Columbus and Co had to harvest hundreds upon hundreds of oysters in the West Indies just to find a single pearl worthy of their faire queen. So it is with start-ups, hundreds are conceived while few achieve notable success. Beating these odds takes an indomitable spirit. Explained Stier, “if you’re not passionate and pigheaded about what you believe in even when everyone is a naysayer, you’ll never get it done.”

Kamal took this a step further, suggesting that entrepreneurs needed to be more than thick-shelled, “I’d subject the [would be entrepreneur] to a psychological exam to ensure that they are just crazy enough to start business.” Acknowledging the ups and downs, comes with the territory. Noted a cash-challenged Stier, “the depressing moments have to be outweighed by the moments of joy, like knowing we’ve birthed something from our mind that other people are talking about.” Concluded an undaunted Lutzker, “Yeah, sure I knew it would be hard–when are worthwhile things not hard?”

Final Note: In the interest of full disclosure, I became a bit of a pearl diver myself when I agreed to help Jeff Stier with the launch of Blurts.com. For you angel investors out there, I’ve recorded this Blurts for you Click on the following links for the complete interviews with Lutzker, Kamal, Middleton, and Stier.

Innovative Start-Up Making Products Out of Recycled Materials

This is the transcript from my interview with Ashok Kamal, founder of Bennu, a start-up dedicated to making new products out of the stuff you throw away.  This is the first in a series of interviews I conducted for a FastCompany.com post on entrepreneurship that will go live later this week.  I also have Ashok to thank for the pearl metaphor I’m using for my larger story with his comment, “bu diamonds and pearls are made under pressure, and so are great businesses.”

Where did the idea for your business come from?

Like any good business, the idea behind Bennu was born out of a problem. The difference with Bennu and other social enterprises is that our problem affects society as a whole, not just individuals. We wanted to address the obscene amount of garbage being dumped into landfills. Therefore, we started Bennu to make products out of recycled materials, both solving a practical consumer need and protecting the environment for all of us.

Why are you doing this?  I mean why not just get a job at a fast growing company and stop killing yourself;-)

To me, entrepreneurship is another word for freedom. Freedom to live your values, freedom to work with people you care about, and freedom to innovate. Once you’ve experienced the freedom of running your own business, conventional employment feels like a prison sentence.

What does success look like for you personally and for your company?

When your lifestyle revolves around your business, the line between personal and professional success is blurred. In the short- and medium-term, my success entails creating a stable enterprise that delights both employees and customers. Bennu’s mission is greening the standard for a new lifestyle so our goal is also to influence peoples’ behavior by promoting sustainability. Over the long-term, I hope the business will outgrow its founders and operate as a well-oiled machine.  At that point, personal success would mean being in a position to help aspiring entrepreneurs to achieve their dreams.

How long have you been at it and where do things stand right now?

My partners and I began working on Bennu during our first year of business school in the fall of 2009. We entered and won the Baruch College & Merrill Lynch Invitational business plan competition and officially incorporated in July 2009. We continued to develop Bennu during our second year of business school and committed ourselves full-time to the venture upon graduation in June 2010. Currently, Bennu is a fully operational, revenue-generating company and we are focused on establishing our brand, designing products and creating marketing programs.

Other than money, what are the biggest barriers to your success right now?

Business is about seeing around corners. As a socially responsible company, Bennu caters to the green consumer segment, which is growing rapidly but still represents a fraction of the mainstream market. At present, the volatile demand for green products is a threat to our business, especially since sustainability adds cost. We’re betting on a green tidal wave that changes consumer preferences such that corporate social responsibility is the expectation, not the exception. The risk we assume is that we’re peering too far around the corner, waiting for a paradigm shift that may or may not occur.

Describe some of the highs you’ve experienced thus far:

As student entrepreneurs who made the leap from classroom to market, a definite highlight was being selected to compete in the 2010 Rice Business Plan Competition in Houston, TX. The event is considered the most prestigious student business competition in the world and participating validated our concept and potential. Additionally, making our first sale was a thrill. The idea becomes viable when a customer agrees to pay for it, suddenly making the business real. As a corollary, it was equally fulfilling to successfully deliver our first order. When customers are consistently made happy, it signals not only the start of a business, but also its likelihood to thrive.

And what are the low points?

Running a startup involves constant troubleshooting. From supply chain disruptions, to managing cash flow, to technical glitches — almost every problem could spell the end of the business because there is little room for error. While no single crisis stands out in my mind, the persistent challenge to withstand shocks and survive can be stressful. Entrepreneurship is an emotional roller-coaster and some days the low points compound. But diamonds and pearls are made under pressure, and so are great businesses.

Where has the money come from to get you this far?

Bennu was awarded $40,000 in seed money by winning the 2009 Baruch College & Merrill Lynch Invitational business plan competition. This capital injection allowed us to start up and earn revenue, and also compelled us to put skin in the game and invest in ourselves.

How hard has it been to raise money?

Bennu is a bootstrapped startup by design. Rather than exhaust resources chasing money for an unproven business, we decided to operate lean and focus on proving our concept. Raising external capital to support an unconventional business model in a down economy would have been extremely difficult. Now that we have an emerging brand, company infrastructure and base of customers, we hope that growth capital will be more accessible than if we had fundraised out of the gates.

Looking back, what would you do differently?

Bennu took too long to evolve. We launched by selling customized backpacks made from recycled plastic bottles. While these Greenpacks have been successful, they don’t suggest the growth of a successful company. A singular product focus is risky and nothing is safely protected from imitation. By listening to both our champions and critics, we realized that our core competency was developing marketing programs for recycled products, which could include but were not limited to children’s backpacks. Our business model became an integrated product development and marketing company focused on the recycled market.  We can help larger companies deal with their waste by offering structured corporate social responsibility solutions based on our diverse products and marketing programs.

Looking back, did you think it was going to be this hard?

When you feel fear, you can either run from it or confront it. Obviously, an entrepreneur is someone who faces fear head on. The psychological leap forward is scary and nothing can prepare you ahead of time. Accepting that all responsibility falls on your shoulders and there is no safety net is something you can only digest in real-time. However, the anxiety becomes overshadowed by the excitement of positively impacting the world and achieving your dreams.

How much money do you need to raise now to get you to the next stage?

In order to scale up and accelerate growth, we will be looking to raise at least $800,000 by the summer of 2011.

If your friend was about to start a business, what advice would you give them?

First, I’d subject the person to a psychological examination to ensure that they are just crazy enough to start a business. Assuming they aren’t either too sane or too crazy, I’d advise them to become consumer-facing as quickly as possible. Regardless of the idea on paper, the ultimate success lies in the hands of the buyer. The most important feedback, especially at the outset, is also likely to come from consumers, so it makes sense to prototype and test before investing unnecessary resources in a dud. Lastly, I’d remind my friend that passion should be at the center of the business. It’s the driver that will get the person through setbacks and make the victories more meaningful.

 

 

Do you see yourself as a serial entrepreneur or is this your one big idea?

I see the entrepreneurial lifestyle as a chronic disease, and I consider myself hopelessly afflicted.

Someone said that “any idiot can learn from his/her own mistakes, it takes a genius to learn from the mistakes of others” — what lessons do you wish you’d learned from others?

I think you can avoid a lot of unnecessary mistakes by establishing an advisory board from the outset. It’s easy to neglect this task in favor of immediate concerns, but once we recruited seasoned and candid advisors, Bennu became much more efficient and productive.