Tuesday, July 10, 2007

Pacing and Braking

It is Tour de France time. Any lessons from cycling that could be applied to entrepreneurship? While I am not as big a fan of cycling anymore, with its drug scandals, I was thinking about this question on my last solo mountain bike ride and I came up with two as I was climbing up Hewlett's Gulch (there's no time to think on the way down).

Pacing the venture. Entrepreneurship is exciting and fast paced, but unlike a cycling race, there is not usually a distinct finish line. Building a business takes time, usually more time than you plan, and you run the risk of burning out your team if you try to ride an endurance event at sprint pace. Like the Tour, try to think of the stages of your business. Figure out which riders are key in the different stages. Keep an eye on competitors and stay out of the crashes in the center of the pack. Figure out when you will need to refuel, where you can rest a bit, and where you will need to go all out (particularly if you are in a seasonal business).

Staying of the brakes. It is counter-intuitive, but all strong riders have figured out how to use gravity to their advantage and stay off the brakes. In mountain biking, there is a hard wired human impulse to squeeze the brakes as one is descending a steep, rocky slope or is heading into a dusty turn. While it feels "safer" it really isn't. It isn't that it slows you down, but that it takes you off your line. Braking pulls you to the outside of the turn, where the path is rougher and longer. Staying off the brakes increases your awareness and aggressiveness. When you lean into a turn around a bush or boulder, not quite sure what the trail ahead holds, you understand the need for being fully ready, anticipating what you think will be there, but flexible and ready to jump or swerve around a new obstacle. Good entrepreneurs have an ability to take a more aggressive line, and realize that its safer to take the turns at full speed, staying off the brakes. When you start feeling positive things happen in your business, take advantage of the gravity and let it accelerate you.

At Envirofit, we have been through several stages and some have been pretty difficult. Some times we have been lucky, and many times we have worked hard as a team to stay in the race. In particular, Tim and Nathan have worked really hard and spent a lot of time working on implementation issues in the Philippines, building our team, and slowly building our reputation. Now, things are coming together well for us, and new opportunities are coming our way. With our goal of significantly reducing chronic air pollution in the developing world, it is definitely a "race" we care about, and one that is worth winning.

Thursday, July 05, 2007

Madonna and the Angels

Paul Graham has done it again with his "Hacker's Guide to Investors"

For the social entrepreneurs out there, here is a hint on decoding the essay and making it into the "Social Entrepreneurs Guide to New Donors." When you read "angels", think of the new generation of donors you are trying to attract to fund your organization. When you read "VC" think about more traditional foundations. When you read "Investor", think "Donor."

If a picture helps you process, think about what Burton Snowboards and JDK did to Madonna's Sex book (look at page 26). Just print out Mr. Graham's essay, cross out the incorrect term and replace it from the key above. What we call a "heuristic device."

There, in just a few pages, you have learned more about fundraising than you could have imagined. And, if you followed the "Sex" link, more about Madonna and her "snowboard" than you ever wanted to know.

Quiz: who is going to be a better source of funding for your social enterprise? The angel investor who you meet at the local Habitat build or Nature Conservancy meeting, or those new style Social VC funds that are starting to hang out at the Skoll and SVN conferences.

Hint: Madonna is not the correct answer. Pay attention.