Forbes: 5 CEOs Talk Innovation And Commercialization: Tales From The Silicon Desert
Many cities aspire to be a Silicon-something. We started with Silicon Valley, and in NYC we now have Silicon Alley; in LA we have Silicon Beach. I live in Arizona where we have a growing eco-system that has been dubbed Silicon Desert.
I was recently asked to moderate a panel at a statewide Phoenix event in August (and if you’ve ever been to Arizona in August, you can appreciate that, as temperatures hover in the triple digits, Silicon Desert is an appropriate name!) where five CEOs, from companies ranging in size from a recent startup to a 20-year-old private company generating a hundred million dollars in annual revenue, shared their journeys. Most of the discussion centered on the ying and yang of innovation versus commercialization, and in addition to entertaining stories, some themes emerged:
- Focus on generating revenue not products
- Hire slow and carefully; fire fast
- Fundraising choices vary by situation
- Execution is the hard part
- Ask for help or money
Each of the panelists shared their best advice or lesson learned for startup and growing companies:
Ibrahim Mesbah, Co-Founder & CEO of RevolutionParts, Inc., provides a platform for auto dealerships to sell parts online.
Whether you’re a small startup or a larger company, it is critical that you identify your core competency and stay focused.
Paul Jackson, CEO and Co-Founder of Worthworm, is an entrepreneur, angel investor, and aerospace engineer.
Having both bootstrapped and raised investor capital, I believe the best place to find your capital is from the customer. A goal of the entrepreneur should be to mitigate risk for the investor. The quicker you can fairly evaluate market risk, the better prepared you will be for a meaningful investor conversation and the more likely you will be successful in the long run. Getting funded too quickly can often do more harm than good. If the name of the game is to mitigate risk, start where you are and sell something.
Justin Gray is CEO, Founder, and Chief Marketing Evangelist for industry leading marketing automation consultancy LeadMD and marketing blog ‘The Marketing Evangelist’.
My favorite lesson learned is to never bring on a partner or venture capital (VC)/private equity (PE) out of habit or feelings of necessity–it’s perfectly fine to hire for talent rather than bring on partners or capital investors to acquire it. The pace you will naturally grow at may be perfectly fine to allow you to better define your offering and hone it for the market. Giving half of something away when it’s worth nothing is never the pain–only when it’s very valuable does that pain become evident. Trust someone who’s been there!
Bob La Loggia, Founder and CEO of his fourth startup, AppointmentPlus.
If you read TechCrunch, you might get the impression that all startups raise money. It’s almost as if it’s a requirement. However, the reality is that the vast majority of startups do not raise money. Sure, they may use their own funds or lean on friends and family to help get their businesses off the ground, but most never raise angel or institutional money. And, that’s okay. It’s perfectly fine to take a longer-term approach, accept a slower growth rate, and build a great long-term business. Thousands, if not millions, of solid companies have been built this way. There’s nothing wrong with raising money. It plays an important role for many businesses, but it’s definitely not a requirement for success.
Craig Hughes, Founder and CEO of Total Transit (the parent company of Discount Cab) and majority owner of 2pointb, an app-driven transportation network.
We were offered a chance to bid on a traditional Dial-A-Ride concept. We weren’t afraid to question the status quo and suggest what we considered a better idea for everyone involved, even if it meant losing the traditional contract. The board came back and let us know that they heard what we were saying with our disruptive model and eventually resubmitted a new request for proposal (RFP) that would accommodate our suggestion. We later went on to win this contract and several others that have benefitted not only our company but all the stakeholders involved.
Whether working with customers or fundraising, these stories have a common theme: do not just follow the status quo; take a calculated risk and do what is best for your situation.
When it comes to fundraising, do not feel like you have to follow the traditional financing path; as discussed in a previous post, there are many alternative funding options. When I met Darren Hardy earlier this year, he cautioned me about fundraising. He warned me that once you have raised that first dollar, you have sold a piece of your company and have to be prepared for that. Our panelists agreed that you have to be very sure before you take that step.
One last tip: If you are out there fundraising or networking, make sure you ask for the money or connections. Never make assumptions, leave every meeting with next steps, and be sure to ask for the investment or introduction.
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