Challenges and Words of Wisdom
“The biggest hurdle was raising money.” A common statement from entrepreneurs who have spent countless hours in meetings and on the phone, or have mailed dozens of business plans to individuals to solicit funds for their fledgling ventures. Depending on the maturity of the business, locating investors and then asking for money, can be physically and mentally challenging. Ned is no stranger to the “hat-in-the-hand” technique of gathering funds. After speaking with this entrepreneur, I believe the thoroughness of his venture’s evaluation has helped to assuage the doubts of any prospective investor.
The other greatest challenge for Ned was locating and retaining the appropriate engineering firm. “My big mistake was being too casual about selecting the first engineering firm. When we got to the third engineering firm, and they failed at creating the alpha unit, that was almost company ending.” This remark referred to the drain on resources and the lack of progress developing the core technology. As one entrepreneur stated, “it’s like a mating dance…you are evaluating them and they are evaluating you.” Yet another variable that is on the entrepreneur’s plate when trying to bring together all the resources necessary to build a venture.
Ned’s experiences in building a company have run the gamut : from contracting resources and hiring designers to seeking investment and to promoting his company and products at conferences. Suffice to say, these experiences have expanded his business horizons. “It’s good to have and end in mind and a journey towards, but in the end it’s the journey that matters. Stop and take a look at what you actually need and be very pragmatic and practical and logical, and don’t try to bullshit yourself. One of the biggest problems that one of my board members pointed out to me that entrepreneurs face is that they are self delusional.” An entrepreneur must maintain a steady-headed approach with their resources and expenditures to achieve their goals, but they must not be risk-averse. “You can’t be afraid to take chances because you may never get anywhere.”
Critical Success Factors
Ned’s goals are to maintain good investor relations and to give the investors a good return on their investment. He does not aspire to be the next General Electric; only to develop ST to its full potential. “I consider myself more of a start-up guy and one who can pull all the starting resources and energies together and running with it. I also feel that my interests strongly lie in the start-up phase of a company and that I could definitely see myself attempting something like this again in the future.” For now, Ned’s feet are planted firmly in ST.
For the venture to succeed, four goals must be met:
- A large corporate partnership
- A fourth round of funding
- A paging partnership
- A distribution partnership
“The potential partner company wasn’t used to partnering with someone who was not already set up with distribution. But my planning and decisiveness on what I wanted to accomplish helped me convince them that I was for real. This has caused some more late nights and fears that all this work may not pan out after four months of negotiating a deal.” Ned stated his core technology should be ready for demonstration in six to nine months. The need for a corporate partner- to accelerate the technology development- has become an increasing key to the company’s success.
Ned believes that if his company has partial success with its potential markets, the business will be profitable and will provide his investors with a handsome return on their investment; then the company would be a prime acquisition target for a larger company. These events will happen in due time and at the pace the founder deems appropriate. “I’m not looking too far down the road right now. I’m only looking nine to twelve months ahead.”-###