STANFORD UNIVERSITY’s ENTREPRENEURSHIP

STANFORD UNIVERSITY’s ENTREPRENEURSHIP CORNER

What I learnt from Guy Kawasaki 

Making meaning in your company

Guy Kawasaki, founder and Managing Director of Garage Technology Ventures, believes that those companies who set out to make a positive change in the world are the companies that will ultimately be the most successful. The first thing that he told us is that the core and the essence of entrepreneurship is to make meaning. Many people start their company to make money- the quick flip or in his words “the dot com phenomena”. He gave examples of all the companies that he started or funded or associated with are fundamentally founded on the premise to change the world, to make the world a better place and to make meaning. Those companies who have these roots are the companies who will eventually succeed in the long run. He said that his naïve and romantic belief that if we make meaning, we will probably make money. But if we set up to make money, we probably won’t make meaning and we won’t succeed and not make money at all. His first thought is that we should make meaning which should be the core of the company.  He gave examples of the best way to make meaning

• Increase the quality of life
• Right a wrong
• Prevent the end of something good

Don’t write a mission statement, instead write a Mantra

Many entrepreneurs take this as one of the fundamental things to do is to figure out a mission statements. He recommended us not to do a mission statement as a startup because the mission statement usually ends up CRAP! It usually is too long, impossible to remember and it cannot even is the focus of the company what it should do. Kawasaki talked about how mission statements, while touted as necessary for any company, often is not representative of the true meaning of the company. Instead, a mantra is shorter and captures the essence of the organization. He gave example what mantras should be for the following companies:

•          Wendy’s – “Healthy fast food”  (somewhat oxymoronic I guess, still)
•          FedEx- “Peace of mind”
•          Nike- “Authentic athletic performance”
•          Mary Kay- “Enriching women’s life”

Get Up and Get Going

Kawasaki explained that market research, focus groups, and test cases can bog down an entrepreneur as it is never ending task and may prevent an entrepreneur from completing the most necessary task - Action! His advice was to break the cycle through

•         Thinking different,
•          Polarizing people, and
•          Finding a few soul mates.

The New Business Model

Kawasaki said that the business model today is very different than it was before and during the boom. In order to write the best business plan possible, follow the following steps:

•          Specificity,
•          Simplicity, and
•          Ask women J- He believed that woman don't possess the killer gene that is inherent in men, and would be able to give better advice about a business model.

Weave a MAT and outline priorities

Kawasaki suggested creating a system of MAT- Milestones, Assumptions and Tasks to keep your business on the right path and increase the chances for success.

Know Thyself and Niche Thyself

Kawasaki talked about marketing and product design simplified. Kawasaki explained why this theory is all an entrepreneur will need to know about marketing. A simple chart illustrated his point - how to be the creator of a unique product or service and how it is valuable to a customer.

 I pitch, therefore I am

Making pitches is a way of life for an entrepreneur. Kawasaki provided his tips for ensuring each pitch is better than the last. His 10/20/30 rule for PowerPoint slides was quite essential. The optimal number of slides is 10 that needs to be completed in 20 minutes and using 30 point font.

•         Title
•          Problem
•          Solution
•          Business model
•          Underlying magic
•          Marketing and sales
•          Competition
•          Team
•          Projections
•          Status and timelines

Who to hire?

Kawasaki explained that hiring infected people is the most important factor. Often, how a person looks on paper means nothing if they are not enthusiastic and ready to work hard. All of the experience in the world means nothing if they are not bitten and infected by the start-up bug. He also told us

•          To ignore the irrelevant,
•          How to avoid the bozo explosion, which only leads to layoffs, and
•          How to apply the shopping center test to know if we're hiring the right person.

Lower the barrier to Adoption

A successful product is easy for everyone to use, immediately. The idea is to

•          Flatten the learning curve,
•          Never asking someone to do something we would not do ourselves, and
•          Recruiting evangelists to spread the message.

Seed the cloud and watch the sales grow

There are typical ways to approach sales, but Kawasaki had three other ideas. Those include

•          The unintended users,
•          Allowing test drives, and
•          The suck down theory - chances are the CEO is not going to be the one buying the product, but rather the people at lower levels.

Be a Mensch

Kawasaki shared some of the qualities that he believed entrepreneurs, and everyone else, should have. In order to be a mensch, (Yiddish word for a person who is widely respected and trusted)

•          One should help those who cannot be helpful in return,
•          Do the right thing in the right way, and
•          Pay back to society.

Funding Choices

Kawasaki talked about two examples of early-stage funding, bootstrapping and venture capital, and the benefits and drawbacks of both. Ultimately, he believed that too much money is worse than not enough money, and that both methods could be successful if a smart approach is taken with the funds that are received.

How do you find Evangelists?

Kawasaki said if a product or services is worthwhile, then evangelists will come to you. He believed that if we are having a hard time finding someone to spread the message about our product, then we may need to re-evaluate our product or our goals. He said “Build something great, and the evangelists will be there”.

How do you find Soul Mates?

Kawasaki believed that often soul mates are found within our existing social network, but there is danger in that as well. Close relationships outside of a business environment can lead to promising more than can be delivered. Kawasaki explained that it is a tricky process, and can be difficult if a soul mate is not fulfilling their duties.

The Career path to becoming a Venture Capitalist or an Entrepreneur

Kawasaki believed there are some lessons one should learn before becoming a venture capitalist or entrepreneur. One thing to avoid is the "Morgan Stanley disease." Investment banking isn't the best way to learn those important lessons but instead join the sales team of a large company and learn from the bottom up.

Experience is overrated

Kawasaki's viewpoint is not one shared by the majority of venture capitalists. Kawasaki sees the best candidates for a successful start-up are young people with no business experience. Ignorance is not only bliss, it is also empowering.