A Good Hard Kick in the Ass: Basic Training for Entrepreneurs - Hardcover

Adams, Rob

Hardcover

ISBN 10: 0609609505 ISBN 13: 9780609609507

Publisher: Crown Business, 2002

Synopsis

Every day, Rob Adams helps entrepreneurs find true markets for their products, design solid business models, and hire great teams—because that’s what it takes to build a successful company. While this sounds self-evident, far too many entrepreneurs have forgotten these fundamentals. They’ve been influenced by what Adams calls “business porn,” myths lingering like a bad hangover from the easy success days of the late ’90s. These entrepreneurs believe a unique idea is the key to igniting a great business. They think their industry experience already makes them experts on customer needs. They have simplistic, self-defeating illusions about sales, marketing, financing, and more.

They say things like “I have a million-dollar business idea for a new product.” Wake up, says Adams: Good ideas are not scarce—they’re a dime a dozen. Businesses are successful not because of a unique idea but because of extraordinary execution. They offer a better, faster, or cheaper product or service, or they change the way the world solves a problem.

In short, these entrepreneurs need just what Adams doses out in the pages of this book: a good hard kick in the ass. Adams debunks the myths and smashes the illusions—and he knows what he’s talking about, because he stands at the hub of many new startups. His firm, AV Labs, provides entrepreneurs with early financing as well as the management expertise they need to get off the ground.

A Good Hard Kick in the Ass offers detailed, hard-hitting guidance for smart, sophisticated entrepreneurs and established businesspeople alike—along with vivid, in-depth examples of companies that are walking the walk right now. Adams’s straightforward, no-nonsense approach is just what’s needed in the post-bubble economy.

About this title

About the Author

Rob Adams is the founder and managing director of AV Labs, an early-stage venture fund providing financing, executive talent, and an acceleration process for technology startups. Prior to his venture career, he was a high-tech executive for eighteen years. He joined Lotus shortly after its IPO and was instrumental in launching Notes and 1-2-3 for Macintosh. He subsequently founded and was CEO of Business Matters, a venture-backed developer of financial forecasting and modeling products, and was an executive with Pervasive Software, a company he helped take public in 1997. For more information, visit www.avlabs.com.

From the Back Cover

“Adams strips the facade off the star-struck ’90s. This tell-it-like-it-is guidebook contrasts business fundamentals with the get-rich-quick frenzy that hypnotized so many would-be entrepreneurs. A must read for every potential entrepreneur!”
—Mike Turner, founder and CEO, Waveset Technologies, Inc.

“This book encapsulates everything I wish I’d known the first time I ventured into entrepreneurial territory. It really nails the issues you need to focus on as you build a company from the garage to a prominent position in the global marketplace.”
—Jimmy Treybig, founder and former president and CEO, Tandem Corporation

“The fundamentals Adams covers in this book are the tenets all companies should be built on—startups and Fortune-class companies alike. Now that we’re out of the days where companies were valued as a multiple of expenses and anything that used the Internet was funded, A Good Hard Kick in the Ass should be memorized by everyone in business.”
—Shelby H. Carter, Jr., venture capitalist, cofounder of SynOptics and Vital-Signs, and former vice president of Xerox Corp.

“Like a great coach, Adams focuses on the basic skills that winners execute with passion and losers ignore at their own peril.”
—Bruce Roberson, director, McKinsey & Company

“Entrepreneurial eagerness, energy, and effort do not always lead to success. Rob Adams’s book imparts a great deal of wisdom that can help aspiring entrepreneurs avoid the myriad woes that plague some of the most recent ventures. I recommend the book for anyone willing to take a hard look at what it really takes to be successful in the world of startups.”
—William A. Sahlman, cochair, Entrepreneurship and Service Management Unit, Harvard Business School

“A Good Hard Kick in the Ass belongs on everybody’s business bookshelf. Whether yours is a tech company, a big-company spinout, or a small local endeavor, you need Rob’s straight-shooting, practical advice about what really matters—and why your entrepreneurial instincts probably need adjusting.”
—Gerald Taylor, former president and CEO, MCI

“After being a high-tech entrepreneur for the past few years, I thought I knew it all. Rob’s book taught me that you never stop learning—you can always pick up something new from others’ experience. Not only is this book fun to read, it also imparts some real gems of knowledge.”
—Glyn Meek, founder and CEO, Triactive

From the Inside Flap

ob Adams helps entrepreneurs find true markets for their products, design solid business models, and hire great teams because that s what it takes to build a successful company. While this sounds self-evident, far too many entrepreneurs have forgotten these fundamentals. They ve been influenced by what Adams calls business porn, myths lingering like a bad hangover from the easy success days of the late 90s. These entrepreneurs believe a unique idea is the key to igniting a great business. They think their industry experience already makes them experts on customer needs. They have simplistic, self-defeating illusions about sales, marketing, financing, and more.

They say things like I have a million-dollar business idea for a new product. Wake up, says Adams: Good ideas are not scarce they re a dime a dozen. Businesses are successful not because of a unique idea but because of extraordinary execution. They offer a better, fas

Reviews

In brisk, straightforward prose, venture capitalist Adams systematically destroys most of the misconceptions potential entrepreneurs have about starting a company, and tells them how to cover the basics, from knowing the customer to hiring good employees. Adams explains why a good idea is not necessary for success (good ideas are plentiful commodities; he contends; execution is really what matters); business plans are overrated (since most of the investors who give a company funding spend most of their time evaluating its employees); and most people don't know as much about their customers as they think they do (which is why customer research is vital). Adams's no-nonsense, fast-paced, slightly sarcastic style (think drill sergeant meets MTV veejay) makes this an engaging read, especially for Gen-X and Gen-Y capitalists (e.g., "I have nothing against team-building outings they're necessary. But come on: Cozumel? Get real!"). The focus on tech companies (Adams finances startups and began his own career as a technology executive at Lotus) feels dated, but the underlying advice is sound for all kinds of enterprises. He tends to stress the negative, spending more time on what not to do than offering proactive advice. Still, his book offers an excellent checklist of new-business pitfalls, making it worthwhile for anyone thinking of starting a company. B&w illus. Agent, Daniel Greenberg. (Feb. 5)Forecast: The book's "in your face" title and jacket will attract attention, and its straight-up advice will please readers.

Copyright 2001 Cahners Business Information, Inc.

Adams, managing director of AV Labs and a former marine who runs a boot camp for entrepreneurs, has written a book that offers entrepreneurs valuable advice and perspectives on establishing and running a company. Adams debunks some myths and illusions of entrepreneurship, e.g., that good ideas are scarce and that the idea has to be unique. According to the author, "What's rare is the team that can execute." He describes critical milestones that must be faced by entrepreneurs, including validating the market, designing a profitable business model, hiring a great team, lining up strong investors, and making sure that building the product is technologically feasible. Sidebars feature case studies of Dell, Amazon.com, Cisco Systems, and Microsoft, illustrating their use of successful strategies for marketing and reaching out to customers. Adams's book offers practical advice and new ways of thinking to entrepreneurs or to those contemplating starting a business. With perhaps the catchiest title of recent business books, it is well worth reading by both practitioners and students. Recommended to academic and public library business collections. Lucy Heckman, St. John's Univ. Lib., Jamaica, NY
Copyright 2002 Reed Business Information, Inc.

Adams runs AV Labs, a boot camp for entrepreneurs that helps get companies up and running. He's all too familiar with the New Economy hype: get a great idea, throw lots of money at it, get a hot Web site, go public, and retire before you're 30. It's people who think like this that he wants to give "a good hard kick in the ass." Adams goes to great length to debunk these and other myths that have polluted the entrepreneurial path and caused the dot-com implosion. Although hundreds of start-ups have gone belly up lately, this does not mean the end of the line for starting new businesses. But it's time to snap out of the hype and get back to basics. With a powerful team, realistic business model, and a willingness to change strategies if necessary, survival is still possible. Companies must get to know their customers and competition, validate the market, and produce a product that actually serves a need. Adam's motto is "Back to the fundamentals--or you're roadkill." David Siegfried
Copyright © American Library Association. All rights reserved

Excerpt. © Reprinted by permission. All rights reserved.

First Kick

Good Ideas Are a Dime a Dozen

Nothing beats an ice-cold beer on a blazing hot day in Austin, Texas. And nothing leads entrepreneurs down more ratholes than the myth that good ideas are scarce. Both these facts were driven home to me one late summer evening, as I shared a round of draughts with Mike Turner and Mark McClain in the air-conditioned bar of Louie's 106, a local deal-making hot spot around the corner from our offices.

This was shortly after AV Labs got underway. Mike and Mark had started with us to pioneer the role of Venture Fellow, a position allowing experienced executives to mentor infant businesses while exploring their own startup ideas. Both ex-VPs at Tivoli Systems, they'd been hard at work trying to pinpoint an idea they could make fly in the marketplace. Together with Kevin Cunningham and Bill Kennedy, ex-Tivoli directors who'd agreed to be part of a new company, they'd been talking to people, researching the Internet, and reviewing industry analyst reports. So far, they hadn't found the right concept--but judging from the positive attitudes that flowed along with the cold beer that afternoon in Louie's, they were having a great time.

"We've coined a new term, Rob," said Mark, his gray eyes thoughtful behind wire-rimmed glasses. "Web-roaching."

"What's that?" I asked.

"We've been using the Internet to research different concepts. We've found out that the minute you hit on an idea you think is unique, four or five roaches scurry out from underneath a rock."

At that point Mike jumped in. "We thought we were really out there when we hit upon application firewalls. We figured, hey, what if you could fire up a Web-based application and partition it, then let different outsiders access only certain parts? We thought this was a really unique notion--until Kevin and I found five companies that were already doing it."

Now pretty fired up themselves, they told me they'd decided to pursue their one and only idea that seemed to be one-of-a-kind: the next great sensory input to the Internet. I must have looked confused (perhaps because I was). "Smell, Rob, smell," Mark explained. "Face it--we have sight, and we have sound. Now, the Internet needs smell. Our company will make it possible to point to something on the Internet and get an odor."

"Cool, huh?" said Mike, grinning as he watched the reaction on my face. Then they both started laughing. I was relieved to know these guys weren't serious about pursuing such an outlandish idea. Unique, undoubtedly, but totally off-the-wall. Of course nobody was doing this--and no wonder!

I knew Mike and Mark would soon find a way to put their talents to the entrepreneurial test. In the meantime, as we finished our beers, I promised to pass on any ideas that crossed my mind, and to watch for any interesting trends suggested by the press or analysts. You can imagine how we all laughed when, not long after, I plopped a Money magazine on the conference table at a meeting. In that issue, Money ran a story about a startup on the West Coast. That company's mission--you guessed it--was to provide olfactory input and output over the Internet.

Think your idea has to be unique? You're deluded.

If Mike and Mark's experience tells you anything, it should tell you this: There really is nothing new under the sun. You wouldn't believe how many would-be entrepreneurs believe otherwise. They come into our office and swear they've got some new, radically cool, killer idea. They expect us to be impressed. They're surprised, even offended, when we're not.

Even intelligent, aware, knowledgeable people--people like Mark and Mike--believe a good idea is like the Hope Diamond. A good idea, they think, is rare in its brilliance and perfection. It is utterly unique in the universe. To be successful, entrepreneurs are supposed to have an idea like that, aren't they?

No! The idea does not have to be unique. The idea itself is really not that big a deal.

It wasn't long before Mike and Mark perceived this for themselves. At Louie's that day, they'd already gotten a whiff (if you will) of the truth. I knew it was only a matter of time before they figured it out. I was right. "We spent a month," Mark now says, "trying to come up with an idea no one had thought of, something you couldn't find commercially. I have to say that honestly, it's hard to find, if not impossible. Ultimately, what we learned was, there is no new idea."

Mike, Mark, Kevin, and Bill went on to form Waveset Technologies, one of Austin's most promising startups. And--surprise, surprise--the idea they finally zeroed in on was similar to the firewall concept they'd discarded early on, when four or five "Web roaches" scurried out from underneath the rock. Using the Waveset solution, companies can give outside partners and customers Internet access to internal data and applications, while managing this access in a secure manner.

Unique? Not by a long shot. In fact, the Waveset team got wind of several competitors early on. (Those dang roaches, all over the place.) What distinguishes Waveset is not the idea. Something else entirely will propel this company beyond the competition. What's that? The team's execution intelligence. In this chapter, I will explore what I mean by "execution intelligence." You will learn an important lesson:

Good ideas are not scarce; what's rare is a team that can execute.

But before we dive in to that discussion, let's debunk the notion that good ideas are scarce, once and for all.

In love with your idea? Get over it. Ideas are commodities.

If you come see us at AV Labs, we'll be able to tell if you're wrapped around the axle on your idea. First, you'll ask us to sign a nondisclosure agreement. Then you'll claim you're going to be "first to market." Then you'll tell us you have "no competition." We'll probably continue to listen politely. But your credibility will be zero.

Let's talk a little bit about each of these entrepreneurial delusions--all sub-myths of the Big Lie that "a unique idea is the key to my success."

Want me to sign a nondisclosure? Instead, say: "I'm clueless."

If I had a nickel for every entrepreneur who's walked into my office and asked me to sign a nondisclosure agreement, I could chuck it all and move to Tahiti. Every time this happens, I see a huge red flag pop out of the top of their head: Warning! Careful! Don't go there!

Why is "Please sign a nondisclosure" such a turn-off to an investor? Because it screams out, "I'm stuck on my idea." We all have a finite amount of energy for anything. If you want a nondisclosure, that means you've spent way too much of your energy obsessing about the idea. It suggests you probably haven't thought enough about the team, which is what an investor is really interested in. It implies you haven't given much thought to your customers, or to the market. You've got stuck here: Nobody in the whole world has ever had a notion like mine. Which, plain and simple, tells me you probably haven't done your homework.

I'll say something like this: "Listen, if you think this is so unique, consider my 1:8:20 rule: For every entrepreneur with an idea in Austin, there are eight in Boston with the same idea, and twenty in the garages of Palo Alto (let alone the rest of Silicon Valley)."

My point is, ideas are far from scarce. They're a dime a dozen. They're mere commodities.

Nine times out of ten, even a cursory perusal of the Internet will prove this is so. Think you have a unique idea? C'mon, get off your rear end and do a simple Internet search, and just see what happens. Like the Waveset team during their own "Web-roaching" sessions, you'll probably find several companies that have already taken a given idea to market. Which suggests, by default, that many others are working on it. As Mike Turner himself says, "The Internet itself quickly debunks the myth that ideas are scarce. Ten years ago, you'd be sitting here in Austin with an idea, and there would be ten people thinking the same thought, but without an interconnected network there was no way you'd know it. You'd think you were just off doing your own unique thing.

"Now, with the Internet, all you have to do is a search on a concept--such as 'database firewall,' 'application firewall,' 'sensory input,' or whatever--and poof! Ten companies are doing it. Before, it would take five years to find this out. Today it's almost instantaneous."

Once entrepreneurs are disabused of the "great unique idea" notion, most of them are actually relieved. Here they've spent all this time believing the uniqueness of their idea was the most important prerequisite to success. Now, they're free. Free to go out and pursue an idea they'd be really, really great at. Free to tackle a concept they'd abandoned, believing it was not sufficiently "unique." What's more, once you get it that your idea does not have to be unique, you no longer have to keep it a secret.

Getting to market first? Big deal.

If you imagine you have a one-of-a-kind idea, it only follows that you're convinced you'll get the solution to market before anyone else. I see this all the time. People tout their "first mover" status as a huge competitive advantage. All I can say is, anyone who's gone to business school and makes this claim deserves a tuition refund.

Getting to market first doesn't mean anything. Don't get me wrong--time to market is critical, especially in the fast-paced high-tech markets. But "time to market" is not synonymous with "first to market." If first-to-market is your only real advantage, this book just paid for itself; I've saved you several years of time you might have wasted pursuing an idea that's probably not all that great. First-to-mar...

Edition details

• Publisher: Crown Business
• Publication date: 2002
• Language: English
• ISBN 10: 0609609505
• ISBN 13: 9780609609507
• Binding: Hardcover
• Edition number: 1
• Number of pages: 304