Starting a business? Get on a plane first!
October 27, 2007
Guy Kawasaki is blogging about his visit to Mumbai, India in a post titled, Mumbai Guy. Reading about his experience reminded me of my own visit to Bangalore, India this summer and it got me thinking about the people I meet here in Texas who want to start their own business.
Lots of people contact me to invest in their idea or for a referral to someone who might. I usually always spend a little time chatting with them, despite the fact that we are not actively investing in startups (besides our own). More often than not people are looking for money for all of the wrong reasons.
One great example is someone who contacted me about a consumer facing product made out of plastic. It is basically a licensing deal, but they need some samples to get across the goal line. If they only had $50,000 they could get their 3D CAD injected molded samples made and close the deal. I really liked the idea and decided to do a little digging. I got on the phone with a friend in the plastics business and he agreed to have a small run of 10 units produced as samples for free! He wanted the right/option to match the best price I could find when we were ready for mass production in exchange for the samples. Sounded fair.
I then called up the entreprenuer and explained that I had someone who would do the samples for free and suddenly the story changed. I won’t get into details, but what he really needed was a job to pay his rent and his electric bill. He was hoping that his investor would float his lifestyle AND fund his idea. Question to entrepreneurs: if you can’t manage your personal finances why in the world would I trust you with my money?
My advice? Go to India and witness how entrepreneurs with 10% of the resources available to Americans can create viable businesses. These guys have to deal with daily electrical outages, old computers, faulty wiring, substandard building codes, no air conditioning; these guys don’t have 90% of what we have, but somehow they are able to start businesses. Climb back into your business class seat, drive to your comfortable home in the suburbs and tell me you need more money for a laptop or a phone system. I bet you will realize that you don’t need as much as you thought. The ironic truth is that with less, your result will undoubtedly be better. Or maybe I am wrong…
