I think there are a lot of people who think like Marc. Jason Fried of 37signals for example dedicated a whole chapter in his book Getting Real on this. In his case, he writes, a lot of people supposedly have accused him of not wanting to take his successful company to the next level by taking in investments. Among other reasons, he wanted to remain small and independent. To this date, this strategy has not harmed his company and 37signal runs a successful global service for thousands of companies.

It will often be difficult for a start-up, though, to remain completely independent from investors. ‘Your own thing’ would need to run very lean, maybe make money from the beginning or at least hit break-even quite early. Most importantly, it must remain small or scale with reinvesting its profits. This is a very difficult task, especially when you get a lot of traction. Let’s assume you’re doing something at the right time, which nobody has thought of before and which nobody can offer in short-term. The whole world will turn to you. Your servers will heat up. In that very moment, it will take a lot of guts not to take VC money to scale ‘your own thing’ up to a global level while maintain to ensure high quality. In case you manage to cope with demand in that situation, you’ll join Mark, Sergei and Bill for lunch I suppose!

There are these beautiful unique global successes, which were not acquired by a Fortune 500 company. Facebook, Groupon and Twitter turned down large sums from Google and others. But even the one-and-only Facebook took in Microsoft’s money back in 2007, because they were burning too much cash. If your start-up rockets through the roof (and I hope it will), you will find yourself listening to a VC while Agent Smith mumbles back in your head: “You hear that Mr. Anderson?… That is the sound of inevitability…” You will partially give away independence. At the same time, this is a huge opportunity for ‘your own thing’.

Is it wrong to sell?

Marc’s point mainly addresses the fact that some entrepreneurs sell their start-ups to large corporations knowing that their services or products will suffer from these acquisitions. New processes and new decision-makers change it to the worse, Marc thinks. And he has a point. There are many cases that confirm this. Does this mean that it is irresponsible when an entrepreneur sells his company? Is it all about money?

I totally understand anyone who shares Marc’s view. It is definitely true that a lot of founders of start-ups dream about becoming as successful as Google, Skype, or Facebook. But that does not mean they do it just for the money. Surely everybody works towards a better standard of living. And becoming a billionaire is alluring, but also very, very unlikely. And they know that.

If it is not about money, then why is everybody in the start-up world talking about exits? Founders are drilled to know their exit strategy, because every angel investor, VC, and even other entrepreneurs will ask them about it. ‘Your exit’ is an incremental part of the company’s strategy and you have to think it through. One could not call himself a businessman if he did not consider probable business paths – for the well-being of the company, of course. Most likely your path will lead to an investment, maybe it will lead to an acquisition, and sometimes it is best to just continue to excel on your own. In a very competitive environment, the right partnership can help you to execute your strategy, too. But even that creates some dependency. Last but not least, it can happen that the company changes to the extent that the founder does not fit in anymore. What happens then? Acting responsibly does not necessarily mean to stick with your firm. If selling is the best thing for your company, I say do it.

Always chasing the next big thing

Once you sold your company, what happens next? Even if you have to stay with the large corporation for some time, you eventually will move on at some point. Is that a bad thing? Does that mean you have abandoned your baby? I cannot let go of the thought that most entrepreneurs walk through this world with open eyes, constantly thinking of new ways to solve their own or other people’s problems. Guy Kawasaki clearly advises entrepreneurs to undo something wrong. While brilliant people who haven’t tasted the world of entrepreneurship still think about ‘at what point do you start your own company?’ an entrepreneur would just go for it. Most likely a venture will not become the next Facebook. And many people know that. This might be a reason why a lot of people do not take the leap into the world of entrepreneurship. As far as a significant part of entrepreneurs is concerned (count me in here as well), many have understood that a company does not gain its one-billion-dollar valuation from the idea or its early-stage technology break-through. It derives from a smart execution over several years and with the help of internal and external resources, including customers, partners, and investors. These entrepreneurs are not in for fun, they will dedicate their all to assure that the start-up becomes a success.

When your baby is able to walk on its own, can you turn away from it and pursue your next endeavor? Is it curiosity for the next big thing that chases you?

Evan Williams, co-founder of Blogger (sold to Google) and co-founder of Twitter, published a blogpost last week, in which he announced that it is time for his next thing. He stayed with both companies for more than five years and I think he can proudly say that he shaped both start-ups long enough to move on. Contrary to Williams, Bill Gates remained with Microsoft all his life. Larry Ellison did not sell Oracle and has not turned to a new endeavor. But many others did. Some companies were not harmed (like Skype), some were (and we forgot about their names).

Only an insider can answer, if selling is good or at least not bad for a company. I can understand everybody who moves on, because he or she cannot stop trying to undo something wrong in this world. I doubt it is the money that propels these people. Salaries in the start-up world are just too low. Now, if you should read this and you have not only been working on your own thing for many years, but have also turned it into a profitable business, you have my full respect. Keep the good work up! Live up to your own dreams. Nevertheless, do not forget possible exit strategies and do not shut your eyes to the fact that investment and acquisition can, at some point, become a logical decision for you and your company.

Congratulations, Wuala, on 100 million files and on a new office!

We also moved offices this week. Luckily, we only moved one floor downstairs (this is our incubator). Still, it is always a disruptive moment for the team – packing, throwing things away and seeing the place you’ve spent so many hours totally empty; at the same time it is exciting to move in at the new place, with more or less a clean desk. Besides this and the view from your window not much changes for a web start-up. Your computer is still the same. Everything should be running the same way. Moving offices is a good moment to move on and to implement new processes, new structures and new habits. This is just psychology, this is how we act.

Wuala is doing really good, as far as I can assess. It was a nice coffee break this morning. Thanks for having me and I hope you enjoyed the Grittibänz. Have fun working in this spacious, great office. We’re staying tuned what interesting products you’ve got in your pipeline!

Pictures by Wuala, click here for more

Clear and simple

One of the most difficult tasks is to formulate YOUR MESSAGE. It must be clear. It must be simple. I’m not the founder of hyzloo. Still, it took me also a lot of time to find the right words for our business too. I experienced the above-mentioned situation many times. No matter what you do, no matter how simple your business is, you need to re-think your message again and again.

Business angels and investors are bright people. So are other entrepreneurs and potential clients you meet. This is not about intelligence, this is about memory and attention. You have more or less 5 seconds to convince others. That’s it. Our brain efficiently selects and stores information that seems to be necessary to survive. How many business ideas would you remember after 20 presentations? Right, the one you understood right away.

What about your brand? Become a Master.

If your message is clear and simple, it is easy for every one’s memory to link your message with your company name. It might be better NOT to name your company hyzloo (except you’re a web 5.0 rocket-science algorith venture, whose product no one would understand anyway). No seriously, the best case is, if people know what you do by reading your company name. At least, it should be easy for each one’s memory to link your message with the name of the company.

Do a self check. What belt have you mastered with your message?

White Belt: People are interested in what you say.

Yellow Belt: People want to know more about it.

Orange Belt: Your message is short and easy to understand.

Green Belt: Your company name tells people exactly what you do.

Blue Belt: Two months later, people still remember.

Red Belt: People love your product and come back again.

Brown Belt: People recommend it to others – and it’s easy to explain.

Black Belt: Everytime they could need your product, they have you top of mind.

Most probably you don’t know the following brands. In my opinion, they are masters:

Supertext - we write, edit, and revise your text

Eat – order food online

Routerank – the fastes and cheapest way from A to B

What about famous brands?

The masters:

Facebook, iPhone, Salesforce

Facebook, Apple and Salesforce have mastered the art of transposition. Their brand / product name IS the message. For example the iPhone. No explanation needed. “Wow, a Phone by Apple. I want this.”

Brand names that need some explanation:

Wikipedia, Twitter, Digg, Flickr

Some brands like Wikipedia, Twitter and Digg have a catchy name.  They describe their business model and that makes it easy to remember – be it fast encyclopedical information, be it tweats from the roofs, or be it digged out articles from the web-swamp.

A: “Flickr? What do you do again?”

B : “We store those photos online that you would like to share with others.”

A: “Ah, thanks.”

Brand names that really needed explanation:

Craigslist, Hulu

It’s easy to critize branding, I know. I wanted to show that there are many other reasons beside branding that influence your success. All famous brands above have done well in telling their message. Flickr is easy to understand and has a useful interface. Craigslist is simple at its best and has be spread by the word-of-mouth. Hulu offers famous series for free … and on-demand … and its legal. How nice! An easy message.

Lesson learned from the brands above? Your brand name is not crucial. Talking to investors, customers, and media, be sure your telling a clear and simple message. The easier it is for somebody else to understand your message, the more likely they will tell other people – especially the media .

If you’re asking these questions as a father-to-be, I suppose it’s too late to pull back. As an entrepreneur-to-be your live is still a bit more maneuverable. Last Friday, I had the pleasure to speak in front of a group of exchange students about entrepreneurship and our company Cassiber. Nextech Venture, a venture fund in early-stage healthcare, and Télésonique, a Swiss telecommunication operator, presented as well. During the Q&A sessions and the subsequent panel discussion, the students’ questions remembered me of the time when we started.

I’ve put together a list of useful links and advices you might find interesting.

Let me know, if you want to read more about a specific point:

When is the right time to start?

Sometimes it’s just time to decide: “yes, we’ll do it.” However, you should be very sure of what you do before you quit your job or invest any money. My advice is: try to find a way to have a second income at the beginning. This way, you’ll have the possibility to think over your idea again and again. Talk to potential customers. Program a mock-up and organize some product testing. Work this way as long as possible. This way you’ll be asking yourself dozens of questions all day and work all night. Eventually you’ll know two things: am I made for entrepreneurship? Will they like my product (and pay for it)?

Do I really need to write a business plan?

Hell yeah! This way you’ll have to bring your thoughts down to paper. Don’t write more than 20 pages. The less pages you need to describe your business in details, the better. In addition to that, a business plan helps you to realign your short-term actions wiith your long-term strategy.

How can I find funding?

Firstly, I would talk to your friends and tell them about your idea. I guess, they will challenge it again (which is not bad). Afterwards you should ask them if they know an investor. This way, I am sure, you’ll get introduced with some businessmen who will listen to your elevator pitch. You won’t be successful the first time. But the more you pitch the better you get. Start reasearching  professional investors and contact them. You’ll most probably have to hand in a powerpoint presentation with a few slides. If you get invited, they’re interested in what you’re planning to do. So be passionate, know your figures, know your estimations and assumptions. Good luck!

How much money will I need to run my business?

There are several ways without spending too much on marketing your product. Try to spend your money wisely until you get the first revenues in. Think about it: the less money you spend and bring your product to market, the less money you will need in total (and the less shares you need to give away at a first instance). You don’t need to go global within the first months . As soon as you proof that your product is a bestseller, you’ll find enough money to expand your business for sure. Until then, keep it simple and cost-effective.

You’re ready? Hesitating?

It’s like becoming a parent: there are a lot of books you can read. You’ll talk alot to your (business) partner about it. Everybody around you gets excited. You’ll love to buy the (un)necessary stuff to start off. You can try to be as well-prepared as possible, but eventually you’ll have to give it a try.

Now, why don’t you start with this great speech of Guy Kawasaki. He’s talking about the core thoughts you should go through yourseld before starting a venture:

Some good articles:

- When is the right time to start a business?

- Quitting your job for a start-up?

And two must-reads by Guy Kawasaki:

success = product x marketing

There are three forces, that influence a business idea:

Market: who will eventually buy your product and generate revenue? Why should they? What is their additional benefit, if they use your product (and not the competitors’)? Ask yourself: what are their needs?

Technology: this is the way you’re solving a problem or how you’re creating a value. How much does this solution fulfill their needs?  The amount is their benefit. Now, is your idea really adding a benefit to your customers?

Strategy: how will you get into the market? Is your solution simple enough that customers will buy/use it immediately after they’ve seen it? Maybe you’re stimulating a need that the customer doesn’t know yet. You would need to give it away for free to have a focus group, who will spread the word to others. Or you might need to evangelize and tell everyone about your great new prototype and convince them of its benefits. There are dozens of ways to get into the market.

Failing to handle one of these forces will cause you to fail. Strategy is important for your business to survive. The other two are crucial for your succes: “success = product x marketing”. This means, you’ll be better off, if you have a good product and if you talk about it! Microsoft talks a lot about Vista, but the product is not that convincing (my view). Roger Federer is a great player, but seldom talks about it. Both Microsoft and Federer are only successful, because they are so briliant with the one multiplier that they bail-out the other. Are you as brilliant as Roger?

If you really create something meaningful, people will like it. They will talk about it. They’ll even do the marketing for you. But you must talk about it too! If you put your energy into marketing as well, you’ll accelerate the process. So tell me, what do you do?

“Create meaning”

Guy Kawasaki puts it right in his speech about “The Art of the Start”:

Now as a venture capitalist I can tell you, that we meet many times the entrepreneurs and they come in an think they are saying, what we want to hear, which is we want to make money. We believe, that with our P2P optimized Google adwords brand new model collecting millions of eyeballs, we can quickly flip this company and sell it to Google or Yahoo or Apple or Microsoft. If not, if they don’t take us off the market in 18 months, we will go public.

When we hear that, it’s so depressing, because I figured out that companies that are successful, they start out to make meaning, not to make money. [...]

If you make meaning, you will make money.

Getting back to my question at the beginning of this post, I want to ask you again. Which reaction to an idea is more promising:

• I think if we do it this way, it might add additional benefit to our potential customers.
• Heureka! Halleluia! Wow, why has nobody else thought of this before?

The first is looking for money. The second creates meaning (at least for you and that’s the start). If your customers also show the same reaction. Go for it and enjoy!

Two examples:

In my opinion, one of the best examples for this is Doodle:

It’s simple and easy scheduling: Doodle makes it easy to find a date and time for a group event. The Swiss start-up was created to solve the founder’s own need to schedule events with his friends. He set up such a neat and user-friendly solution that even my dad uses day by day.

Another start-up that creates meaning is smartfish. Smartfish is a new concept of airplane design to make flying safer and less fuel-consuming. The venture hasn’t taken off yet. Maybe the industry prevents this start-up from getting into the market. I don’t know. However, in times of global warming, I think it’s meaningful to look for more ecological ways to fly: