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Entrepreneurial Pitfalls

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Presentation on theme: "Entrepreneurial Pitfalls"— Presentation transcript:

1 Entrepreneurial Pitfalls
~ Look Before You Leap ~

2 1.ENTREPRENEUR TRAPS TO AVOID
Entrepreneur as a Technician Learning Phase More resource expended than gathered Typically running cash flow negative Entrepreneur as a “technician” Entrepreneur wears many hats Survival is a day-to-day concern Start-up Trap Expenditure = risk “Dream stealers” prevail Self-confidence is questioned Comfort zone is calling loud Entrepreneur tempted to bail just prior to growth phase Traps & Evolving Management Styles X Start-up Trap Many success stories never see the light of day

3 Many success stories never see the light of day
1.ENTREPRENEUR TRAPS TO AVOID Entrepreneur as a Technician Learning Phase More resource expended than gathered Typically running cash flow negative Entrepreneur as a “technician” Entrepreneur wears many hats Survival is a day-to-day concern Start-up Trap Expenditure = risk “Dream stealers” prevail Self-confidence is questioned Comfort zone is calling loud Entrepreneur tempted to bail just prior to growth phase X Start-up Trap Many success stories never see the light of day * Brian Tracy

4 1.ENTREPRENEUR TRAPS TO AVOID
Entrepreneur as a Manager Founders Trap Needs exceed founder ability to control If delegate accountability & responsibility = continued growth If not = growth ceiling Inability to make decisions is main cause Success Trap Meeting or exceeding expectations Typically 5+ year mark ** Must reinvent or slowly die Why? Ride a good thing too long When KPI down-trend, may be too late Must commence new lifecycle while cash flow supports it X Start-up Trap Entrepreneur as an Entrepreneur

5 2.VISION - YOU ARE BLIND WITHOUT IT
It all starts with future state in mind BHAG – Big Hairy Audacious Goal A true BHAG is clear and compelling Serves as unifying focal point of effort, and acts as a clear catalyst for team spirit It has a clear finish line, so the organisation can know when it has achieved the goal High Achievers Understand perception is reality. A true vision forefront of mind will eventually become a reality with applied effort

6 3. GENUINE PAIN RELIEF Value Proposition Quantitative statements
Value is in the eye of the buyer (…not yours!!) Quantitative statements about the uniqueness of the business & precisely why a customer should engage. Describe it as – “a market need in search if a solution” Your offering must be market driven not technology driven

7 4. HEARD THESE?.... Build it & they will come….
We have no competitors…. Our mousetrap is better than X’s…. We have first mover advantage…. We are funded – now we can relax…

8 4. WHAT THEY MEAN!.... Build it & they will come….
No Plan. We don’t need to market - beat a path to our door We have no competitors…. We have not looked or there is no market or S&A Our mousetrap is better than X’s…. We hope the market will agree We have first mover advantage…. No patent or competitive differentiator We are funded – now we can relax… Naïve to investor demands and process

9 5. ROUTE TO MARKET Technology risk vs. Commercial risk
Too many business focus on the technical aspects of product/service Feature/Function set overload Investors generally assume the technology works How do you use this thing as a business? Vs. property, shares, etc How do you mitigate commercial risk

10 6. VALUE REALISATION & EXITS
Ongoing vs. Out & gone they don’t need to be the same You all need to get something for your hard work VR/Exit misalignment Often cause of most board level/ issues When others can see how/when they realise value, they will be more willing to help.

11 7. INVESTORS – KNOW THY DEMON
Know the Difference: FFF, HNW, Angels, VC, Project Finance Vulture Vs Venture Capital? – time driven model The “Golden Rule” Those who have the gold makes the rules Genuinely know what & who you are getting into bed with. Walk a mile in their shoes Present info in the form they want/need to make a decision

12 8. MANAGING GROWTH Seems simple…..growth = success? Generally
Single largest & fastest growth cost is people Next is buildings/equipment You have less control over revenue generation but ultimate control over expenditure Scalability can the current business model scale for growth? if not change or don’t & it will self-implode.

13 9. LEADERSHIP LONELINESS
It is exhilarating but it can also be very lonely….. CEO, Entrepreneur, leader, chairman are all human….. Express doubt at times about strategy, products, ideas & self Innovation calls for outside of box thinking = “crazy” ideas, “the path less travelled”, pathfinder not follower……. Difficult to express ideas/issues/concerns to: Board – they generally employ you, judge risk & your rationality Spouse/Friends – don’t have the full context or day-to-day pressure Many may get the wrong message & panic: Staff:(resign), Customers:(drop sales), Market:(share price), Advisors: (Banker) Some studies indicate it may be the biggest contributor to leadership failure & workplace depression CEO forums, peer networks, functions like these, mentors

14 CONCLUSION - ENTREPRENEURSHIP
No guarantee for success….But ….you can maximise chances! Often outside your comfort zone….But ….fortune favours the brave! There is no journey without a destination….But ….often its more about the journey & the 1st step! The unknown breeds fear & uncertainty….So ….study widely & deeply – overcome the “unknown!”

15 ~ Look Before You Leap - But Do Leap!! ~ www.ranksec.com
THANK YOU ~ Look Before You Leap - But Do Leap!! ~


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