Brazlian Jiu Jitsu for Bootstrappers

There's an admirable purity about a person that will step inside a ring and put it all on the line. I'm a big fan of mma athletes, or ultimate fighters as they are sometimes called. If you watch the UFC, you know that in today's modern world of competitive fighting, you either know Brazilian Jiu Jitsu (BJJ) or you lose. And in BJJ, there's a common saying that is repeated over and over: always face your opponent. I've heard it in boxing as well, but in BJJ, always facing your opponent is law.

BJJ was invented by the Gracie family in Rio De Janeiro, and is similar to wrestling. However, rather than trying to pin your opponent, you try to "submit him" with a submission hold. In wrestling it is common to turn away from your opponent while on the ground. Submitting an opponent in BJJ is typically done by applying a choke or joint hyperextension until the opponent "taps out." If you apply a submission hold and your opponent doesn't tap out you either end up with an unconscious opponent or one with a severely torn joint. In Brazilian Jiu Jitsu, the easiest way to get tapped out is to turn away from your opponent.

I see a lot of similarities between BJJ and starting a business. The easiest way to get tapped out as a business is to turn away from your issues or challenges. As a bootstrapper, you don't have the luxury that investment capital affords. If you don't address your issues, you go out of business and the margin of error is razor thin. The faster you face your challenges, the faster you can address them and move on. If you think your business doesn't have issues, you're probably not looking hard enough

I started a return-on-investment consulting business, Wilson & Company, as a nights-and-weekends side job back in 2001. It was just me (not much of an "& Company") and I created ROI models in Excel and Visual Basic to help sales groups of technology companies sell their products. When your company is just you, it's easy to keep tabs on issues. You are the only tab. In 2005, I started Small World Labs, a social networking platform company that currently employs 27 people and has over 100 customers. When you combine the words "product" along with "employees" and "customers," things get more complex. And when things are more complex, there are more challenges to address.

Over Small World Labs' history we've faced the gamut of challenges as a company - from founder issues to quality control. Anytime I've seen an issue and not faced it, it has come back to bite us in the rear more severely. You only have 24 hours in the day so prioritization is a challenge in itself. However, deprioritizing an issue does not make it go away. Most times, it gets worse and you start to feel submission hold. That's when you absolutely have to face it or tap out.

Sometimes I've found I don't know how to solve an issue at first, but know it exists. Having a good network helps in these situations, from fellow entrepreneurs to business advisors. When you start to share your issues with trusted advisors, you often get a good, honest perspective on how to move forward. However, if you're the CEO, one way or another, it's incumbent on you to make sure your company is facing its opponents and not tapping out. Your employees, customers, partners, and investors depend on it.

Right Action, Right Time for Funding

At the Bootstrap Growth Subgroup meeting in April, two knowledgeable local executives presented their experience and tips on Funding....

Henrik Johansson, co-founder and COO of Boundless Network
Michael Wilson, founder and CEO of Small World Labs

Our speakers' experiences spanned the gamut in why, how, and the lessons learned in getting investors to pony-up for the growth of their venture. Three wise principles stand out:

• Proceed with the end in mind
• Go for the money before you need it
• Choose your investors wisely
  

Before you go for the money, know where you eventually want to be with respect to the venture. What becomes of the founder in the future? Of course, whatever you want is ok. It's your business – for now. Remember that once you bring in investors you will be accountable to them, and depending on the terms of your funding and how much you raise, you may eventually lose control of your company, and if you don't perform you may lose your job!

It takes a very long time to get investment money. The tasks involve: getting the connections; establishing relationships; negotiating the terms; and, working full focused to move things through. Not only do these steps occur over time, during this time you still have your duties in your business and could be looking at some very long days. Start this process way before you're ready for the money. The day you wake up and decide you need funding, you will be thankful that you started conversations in the right circles - long before.

Your investors become your left-hand, your shadow, and your conscience. You want to know well about their motives, their expectations, and their interests in your company because when you take their money, you become accountable to them.

When considering investment funding for your business, keep in mind right action right time. The implications of this funding will vary markedly, depending on the stage of your business. For example, if your venture is in Ideation, your investors are likely to become your bosses and you become an employee who can then be fired. When your venture is beyond the VoD and in Growth, you are likely to have more influence in creating the terms of that funding and control in the business afterward.

Nancy Schill, founder, Executive Intelligent Coaching and co-lead, Growth Subgroup

Business Owners can Avoid Much Online Pain

Last month's Bootstrap Web presentation entitled "Conversion: The Most Important Word for Online Businesses" is available (with slides) on the Boot Rap Podcast. You can find it at the newly redesigned HearThis.com.

I prepared this presentation so that business owners will look differently at their Web site. There are a few unfortunate thoughts lurk in the depths of our minds when we imagine a Web site to support our business. Here are some of them:

"Building a Web site is more like printing a brochure than developing a software application."

"My Web site is independent of the advertising I'm doing."

"Web developers know how to build Web sites that will help me land more business."

"The look and feel is the most important aspect of my Web site."

"People want to know about my company."

"People want to drill down until they find the information they are looking for."

"Everyone who comes to my site is relaxed and has lots of time to spend."

My presentation offers six ways of looking at your Web site that will make you better at commissioning your Web site's construction.

I hope it will save you the months of lost sales and thousands of mis-spent dollars.

Best regards,

Brian Massey

Moving Safely through Collaborations

A couple weeks ago Bootstrap Austin had two opportunities to enlighten the attendees of SXSW Interactive on the hallmarks of what it means to be a Bootstrapper and how to be a Bootstrapper. In the second panel discussion, Bootstrapping through Entrepreneur Collaboration Networks, the panelists Kevin Koym, Allen Beuershausen, Bijoy Goswami, Bruce Krysiak, and myself illustrated how the "collaboration networks" that we use to grow our businesses, are actually a community. Once we view the ever-available resources of the bootstrappers as a "community", then we can move into a collaboration dance with other entrepreneurs. In contrast to the other models of building businesses, bootstrap businesses don't impose arbitrary structures on themselves. Instead, they extract structure from chaos with tools like the wiki and see the potential of opportunities everywhere, finding that the best ones are often those that are unexpected!

It is the collaboration dance that I find so fascinating! This is not simply because I am a Relater (Bijoy's MRE model of energy), an Extrovert (Myers-Briggs personality preferences), or that the college degrees I've collected include the word, "psychology." These one-to-one collaboration dances are how I have grown my business and created new service offerings! Nevertheless, being driven, energized, and overly-trained regarding people, I also tend to enjoy collaborating with others and realize that for many entrepreneurs, they do not have this same comfort. During our panel discussion at SXSWi, a good number of questions from the audience were about concerns dealing with the people in their collaborations/partnerships. One person asked, "You put yourself out there and make yourself vulnerable, working to build a collaboration with someone. What if they aren't being honest with you and don't have the same level of integrity?" Hence, the need to move safely through collaborations.

To begin with, we need to find the "right" people for our collaborations. Think about the effort we put into hiring people...okay, think about the effort that business people who hire GREAT employees put into hiring; it's a process where they spend time. They spend considerable time and energy, ask good questions, contact references, look for fit of the individual in their company, look closely at the needs of the company, and assess the individuals ability or likelihood of meeting those needs. In developing collaborations to build your business, keep in mind that the "right" people are a complement to you! They are not your clone. Of course, the "right" people are different depending on who YOU are, what your business is, the time it is in your life, local/global economics and where you are in your business (the stage of your venture). In trying to figure out if someone is the "right" person for you to develop a collaboration with, here are a list of features that you will want to know about the person:

• strengths and natural talents
• personality preferences
• values and passions
• skills and expertise

For more information about collaborations, you can also reference EIN's August newsletter, Boutiques for Sole Proprietorships. Finally, remember that mutual respect is a critical component in the successful collaboration dance.

So what else is important for safely building collaborations?

We also need a lot of clarity and awareness about ourselves. The quote, "One must know himself before they can know another' applies directly. What are our own strengths and weaknesses? Our personality preferences, values, and passions? So it is, that in the collaboration dance, it is vital to really know who we are. After all, we are looking for our "business complement". Furthermore, it is important to know what we need in our business. This could be any number of things. Do we need a collaboration to: take our business to the next level; expand our reach; handle operations; manage people; create new products/services; or simply meet the demands of a new, large-client project?

As we're collecting all this information about ourselves, our business, and potential people to collaborate with, we want to be mindful of possible hitch points that can come up along the way. And sometimes, it is simply a matter of timing, and not the right time or a good time for this collaboration. Hitch points, however, are signs or warnings that it may not be safe to proceed with the collaboration. They can show up as:

• conflict in ethics or values
• skewed power or lack of balance in power
• lack of reciprocation

Essentially, whenever we sense any of these dynamics, it is our wise, intuitive self trying to warn us that there is a high risk that this collaboration will be a costly and negative experience. This is also discussed in Business Relationships: Develop the Essential Components and Dodge the Hitch Points.

Finally, after we've found the "right" person, uncovered the specifics of ourselves and the needs of our business, and there haven't been any hitch points, focus on setting this collaboration up for success! As we develop the collaboration, spend time discussing what each of us need and outline and agree to the parameters of what we're actually doing together, who is specifically doing what, and when things will happen. These steps will help to ensure that we not only safely venture into collaborations, but that our collaborations will also be successful!

Building business in Austin despite a possible recession

How can we buffet the effects of a possible economic recession with regards to business growth in Austin? Recently there has been a bunch of press about the growing threat of recession coming to the US. The New York Times tells a story that all of us as entrepreneurs need to start preparing for called "As Lenders Tighten Flow of Credit, Growth at Risk"
From the article there are two important paragraphs to note:

Credit flowing to American companies is drying up at a pace not seen in decades, threatening the creation of jobs and the expansion of businesses, while intensifying worries that the economy may be headed for recession.

The article goes on to focus on small business, and how small business is getting hit the worst. So why is this important? Small business is where all of our growth and job creation is coming from. From the NY Times article:

In recent months, smaller companies have been adding jobs even as larger firms have been shedding workers, according to the ADP National Employment Report, which tracks changes at companies with payrolls overseen by ADP. From May to October, 276,000 of the 378,000 jobs added were at companies with fewer than 50 employees, the report found.

It is the entrepreneurs that are building startup and small businesses that are contributing to the greatest growth of the US economy. Programs that are being structured by the government should take this in account- and support small business- versus focusing on solutions for large, slow moving corporations that typically are the benefactors of the pork coming out of Washington DC.

So what can entrepreneurs do in lieu of dealing with a drying up of financial capital other than make sure that they voice their vote strongly in the coming election? I and a number of international collaborators have been examining what can be done through how we organize our businesses together for the purpose of building our business... And given the continuing news of financial crisis, it is time to take action as business people and not wait on government programs. Even though financial capital might not be as available, social capital can be utilized to continue to build businesses. Social capital, called "human capital" in Paul Hawkin's book called Natural Capitalism can be a somewhat replacement in lieu of financial capital. Creating social capital is what we have been doing in Bootstrap Austin and other entrepreneurial social networks that we have been building. In fact, it has always been true in the US that social capital carried the day during financial crisis. A historical example of this can be found in our region's history of farming. In order to sustain their farms, farmers helped each other raise barns together... these farmers were creating social capital with each other ("I help you, you help me"). There are many examples in the past, including from my family, where farmers had no access to government support, nor other access to financial capital... but they could help each other, and survive the worst of economic downturns. It appears that the US is entering into a time that once again that entrepreneurs building social capital together will be the way that we will continue to build our businesses, as financial capital runs and hides during the storm.

Thankfully, Austin's wired technology community has been organizing into what I call "Enterprise Tribes" helping entrepreneurs build their businesses, recession or not. Research has shown that business that organize themselves as ecosystems (or as I say "enterprise tribes") positively grow each other much faster than businesses that try to stand alone. This social networking behavior with groups like Bootstrap Austin, Refresh Austin, Door64.com, Jelly in Austin (among others) are making a difference, supporting entrepreneurs to innovate at a level never before seen in Austin. Yet as much of our "tech elite" figure out these new ways of doing business and new ways of lowering the cost of work, we must as the community of Austin create broader integration between our businesses, cultivating a richer business ecosystem. Through this we shall build an even more vibrant Austin into the years to come.

As you build your business, please do join our Bootstrap Austin network to collaboratively build businesses together and join the discussion around my forthcoming book and my Exponential Entrepreneurship blog.