The Top 11 Mistakes of Startup Entrepreneurs | Guy Kawasaki [Video]

guy-kawasaki-hugo-avilesVenture Capitalist Guy Kawasaki bestows his entrepreneurial insights to UC Berkeley students on what he considers are The Top 11 Mistakes of Startup Entrepreneurs.    Guy Kawasaki is the co-founder of Garage Technology Ventures and is known as one the top tech startup pioneers of today’s venture capital era.  I took the time to add a personal touch to his 11 Mistake ethos.. Enjoy…

1. Multiplying big numbers by 1 percent

Many entrepreneurs make the initial mistake of quantifying a large market and multiplying it by one percent and saying, “How hard can that be?”   There are two fundamental flaws with this mentality. The first: Getting one percent out of any market is not as easy as it seems.  The second: no investor wants to hear that you are going to only attack and get one percent of any market.  So stay away from this kind of logic. It just doesn’t work like that.

2. Scaling to soon

The truth is that there are too many internal and external variables to take on in business and entrepreneurship. No one has the power to see the future.  Do not over leverage yourself and do the best that you can to stay within REAL milestones.

3. Partnering

Partnering is bullshit. There is only one thing that counts in a startup, “Sales”.   Partnerships mean nothing. Entrepreneurs should focus on one thing, Sales.

4. Pitching instead of prototyping

In the real world, the key is not the “PITCH”, the key is the “PROTOTYPE”.   When you show up with a prototype, it eliminates risk for the investor because it shows that you can actually produce a product.

5. Using too many slides and too small of font

The optimal amount of slides for a PowerPoint presentation or pitch is 10.  The time that you should be able to deliver those slides is 20 minutes.  The ideal font size should be 30 points or larger. This is known as the 10/20/30 rule.

6. Doing things serially

A big mistake that entrepreneurs make is in doing things one at a time.  The serial world in entrepreneurship does not exist. The truth is that you have to learn to take on and manage a significant amount of tasks. From raising capital, to dealing with the emotional volatility and duress, you need to stay fluid.  The world works in moving multiple things down the parallel path.  So stay fluid and keep on moving.

7. Believing 51% = Control

The fact that you retain 51% of the company may make you feel important and in control of your company, but the truth is that the moment that you take outside money to fund your startup you have lost control of your company. Nothing ever comes down to a vote.  Startups are not run like the United States Senate.  The moment that you take outside money to fund your startup, you have the emotional, financial, and ethical responsibility to your investors. If you cannot handle the stress, do not take outside money!  51% is an illusion of control!

8. Believing patents = defensibility

Patents realistically will not help you.  The most compelling reason to have a patent is that it will make your parents proud.  If you believe that patent something is going to make you defensible, you are diluting yourself.  You will never have enough capital to compete and play the litigation game against the big dogs.  Real investors know that patents mean nothing.

9. Hiring in your own image

You should learn to hire those who have strengths where you have weaknesses. Engineers should hire sales people and sales people should hire engineers.  You need to learn to keep you company balanced and within its organic levels of equilibrium.

OLYMPUS DIGITAL CAMERA10. Befriending your VC’s

VC’s and Investors are not your friends. They are in the business of making money, not making friends.  Do not try to make them your friends, just concentrate on making the forecasts.   The key to managing any VC or investor is just by MEETING YOUR PROJECTIONS.  So set projections that you are 80% confident that you will make.  So under promise and over deliver.

11. Thinking VC’s can add value

Do not think that VC’s can add value.  VC’s are very busy people. They are ADHD and Egocentric. A VC can pick up the phone and make valuable introductions along with capital infusions, but they will not do any heavy lifting..

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