Issues Facing Entrepreneurs in the Silicon Valley Today

There are many issues facing entrepreneurs in the Silicon Valley today. I've been living and breathing these issues ever since I founded my new company here in the late spring of 2004. To talk about all of them in one blog posting would be too lofty a goal, so in this posting, I'm just going to focus on what I consider to be the top two issues based on my experiences. I'll ruminate on the rest of them in future postings, as they come to mind or happen to me in real time. That's what's so great about blogging - I can write as little or as much as I want, whenever I want. The freedom to do so is liberating and quite energizing, I must say......

Sorry for going off-tangent, getting back to the issues facing entrepreneurs in the Silicon Valley today, I would have to say that money is hands-down the single most important issue. So Issue One is Money, or really, the lack thereof. All the entrepreneurs I meet don't have enough of it, and all of them are trying to find creative ways to get more of it. I'm not talking about finding investment money, because each entrepreneur has their own "special" approach for getting funding, either from family & friends, angel investors, or from the last resort, vulture capitalists.... I mean venture capitalists. I'm referring to money from deal flow, money for work performed or expected to be performed. I've talked to entrepreneurs at conferences and seminars, at networking events, at private lunches and dinners, at CEO forums, and in business meetings and phone calls, and the one thread that never fails to pop up in the same vein is the paucity, scarcity, and downright absence of money. I've had clients say to me "Zero budget, Jeff. Can we pay you after we've made our money?". This, after I'd worked on their account for six weeks. And I've heard clients offer "Money is tight. We'd like to pay you with a percentage stake in our company." That's great, but you can't put butter on it and stick it in a sandwich to feed your kids, can you? One of the best ones I've heard is "We'll give you a success fee." Okay, I'm game. From my Junior Birdman Decoder Ring that I pulled out of my kid's cereal box one day, I've learned that "success fee" is the 21st century way of saying "commission". Isn't that what vacuum cleaner salesman and used car dealers work from, a commission? I never heard of engineering professionals working solely on commissions, have you? Commissions are great, when added on top of other compensation like salaries, bonuses, or consulting rates, but commissions-only compensation make monthly cash-flow difficult in my business niche environment, where sales lead times are often six-to-twelve months. So money has got to be the number issue facing entrepreneurs in Silicon Valley today. Lack of it, and how to get more. Lesson learned? Always ask if there is a budget before spending any time with a prospective client! Don't invest too much of your valuable time with someone who has no intention of compensating you for it until too far out in the future.....

In my estimation, the second most important issue facing entrepreneurs in Silicon Valley today is gathering momentum for their start-up company. Going from a stand-still to 100mph in nothing flat is quite a feat, and you have to have the panache of a leader and the stomach for it. So Issue Two is Gathering Momentum. One minute, your company doesn't exist, and the next minute, you breathe life into it, and you naturally need to spread the word about it. First of all, how do you get people to take you and your business idea seriously? With hundreds of new companies coming on line, how do you make yours stand out above the crowd? How do you gather enough momentum to make your website attract eyeballs? With money in short supply, how can you get some visibility, ally yourself with strategic partners that won't ask for your first-born, and build deal flow to create a consistently recurring revenue stream? All good questions, I would venture you'd agree with me here. So what are the answers? Well, in my experience, I've found that gathering momentum is a function of the business relationships you build and the quality of the people you surround yourself with. As an entrepreneur and the CEO of my own company, I make the decisions about who I'd like to hire, about whether or not to join boards or associations, and even whether or not to go to certain conferences, seminars, or networking events. Early on, I found out about a business incubator and venture accelerator called TEN - The Enterprise Network of Silicon Valley. After meeting with their CEO, I was convinced he had the integrity and ethics for the kind of business relationships I find successful. I subsequently established business relationships with him and his staff, and even joined TEN. This has proven to be a good decision, resulting in solid business relationships with even more future potential. I also established business relationships with other CEOs and entrepreneurs in Silicon Valley that met my high standards of ethics, integrity, and relevance. I don't suffer fools gladly, and I give short shrift to "flies" masquerading as entrepreneurs just waiting to take advantage of neophytes. Then, too, instead of going out and incurring debt by hiring too many people and leasing plush office space before we had real revenue, I decided to bring on board a leadership team of three people to help me in their areas of expertise. Namely, product marketing & sales, business law, and web marketing technologies. I've known these folks for many years, and I trust them implicitly to do the right things for my company. So I've surrounded myself with three people who's opinions I respect and who aren't afraid to give me bad news when necessary. Lesson learned? Creating a compelling website, talking about your company to everyone you see all the time, and proactively spending 110% of your time doggedly pursuing clients and customers - all these are extremely important and contribute to gathering momentum. But IMHO, the business relationships you establish and the quality of the people you surround yourself with are the key for gathering momentum for your start-up company.