One of the most famous American startups retired” Bob Dorf not a fan of the genre “bad advice”. He sincerely believes that traditional business plans that entrepreneurs write and scrutinize investors, is just inane fantasies of the business.
T he right to be a subverter of the usual ideas Bob Dorf has earned quite. For his entrepreneurial biography he personally founded seven companies, three of which ended zilch, and consulted more than two dozen projects, of which six went straight in the trash”, as he himself willingly and without hesitation tells everyone because he thinks that mistakes is the best business universities. Success, however, far outweigh, so Dorf is in great demand as a business mentor, consultant and teacher. And recently it is also a popular business author, published the book “Guide to startups”, which was translated into 19 languages. During the recent visit by Bob Dorf in Russia, “the Business journal talked with him about the secrets of a successful startup.
— In your book you have formulated many rules for startups. Which one do you consider the?
— Of course, any successful business starts with great ideas and genuine passion, devotion to her by the founder. But experienced startup teams understand that you want something else — the constant, close interaction with the client at every stage of project development, including at a very early stage of thinking about business ideas. Yes, you need to be sure that the products you intend to sell, will be needed. It is the only participant in the entire process which really can attest to the value of your idea. And the only people who will have to pay for it. The customer is always prompt, where exactly he wants to buy your product, what characteristics it should have, how much and so on. Only if you have the answers to all these questions, the start-up may expect success. Simply put, the model of a successful startup can be described in three words — implementable, scalable, and profitable”. And, of course, be sustained for a long time.
— What are the criteria of selection of ideas for a startup? What is better — to service existing demand in a Mature market or attempt to create a unique product?
— Everything as in hockey: you need to watch where and how flying puck, and not just where she is at the moment. Consider what would happen in the next two, three, four years. Focus your energy, looking for clues in the investment portfolios of the most experienced and wise investors try to understand their logic, paying particular attention to their latest investment. The selection criterion one. At some point, thinking about another idea for a business, you will feel an irresistible desire to bring it to life and realize that if you don’t try to implement this feature, you will never be sorry for this — either you earn yourself a depression for the rest of your life or kill yourself. And this is the best signal that it is time to act. If the idea doesn’t care and doesn’t inspire enthusiasm specifically you, to realize it is unlikely.
— You are known as its a bit provocative call for startups to throw the business plans. This is not something that is taught in business schools… How startup teams can sell his idea to the investor if he does not even have a business plan?
— Show the investor feedback from the prospective client. Show him what the customers use now, what they buy, what they think about your idea. Actually it’s more important for investors than financial fantasies in the form of business plans. I adjure all: “Throw your business plans!” Because, once you have received confirmation that your idea, marketing program and pricing is exactly what you need the client, you will need not just a business plan and a detailed operational plan what and how you will do. And then the investor clearly understands why he needs to give you millions of dollars.
— How best to Fund a startup today? What ways do you recommend to avoid?
— I recommend not to use the services of any professional investors until such time as the start-up will not take its place in the market, you will not receive your customer. In short, while the startup will not turn into a real business opportunity. Until then you should not bind themselves: in the first months of work — only the help of friends and family, loans or other not quite traditional business sources. Because in this period you “open up” his client. And the most important in this case is not about money but about “sweat and blood” of business founders.
— What do you think about the phenomenon of crowd funding and project funding “crowd” interested consumers? It’s only fashion — or is it an effective method to raise money for projects?
— I am impressed by the ideas of meritocracy inherent in Kickstarter, IndieGoGo and other crowdfunding platforms. But — alas! “I am confident that these platforms hold a straight course to the wreck. We see that the failed projects is gradually becoming more and more that people who support other people’s initiatives money, get nothing in return for their investment. My favorite example: one young American was collected with the help of crowd funding about 20 thousand dollars, then realized that his idea is not viable, and used the money to… to move to Oregon. Tea party investors who have invested in this “project” money?
— What technological direction, in your opinion, the most “hot”? Startups in what area are most promising?
— Hard to answer. Can confidently assert that the real boom awaits us in connection with the development of the concept of the Internet of things: more and more everyday objects that surround us in everyday life, will connect to the Internet, and this will give humanity a new quality of life. The “Internet of things” many things will change is how we prepare lunch, how kondizionirutm our homes, even as are standing in traffic jams on the road. I think that the other “big idea” is in the area of sequencing in the sea of data that surrounds us. We need filtering and organizing information mass we are in. For example, to a “smart” algorithm was dismantled by priority letter in my e-mailbox, raised up those that I always read first (e.g. my wife), and various newsletters, on reading which I spend “as much as” six seconds, was placed in the bottom of the list.
— Do you think the current situation we face in the global it market, is the next “bubble”? I mean multi-billion dollar acquisition of Internet companies that own and earn some never learned.
— I think that “bubble” of the U.S. market pouted: can be seen firsthand. “Too many startups, too little luck” is not only my idea, support it and readers of my blog (Dorfonstartups.com), many of which are much more wise than I am. What to market it start-UPS in Russia, something about it I can’t talk confidently: too few know him.
— How do you feel about social networks? This is the main phenomenon of our time?
— Have questions of higher order, the answer to which has not yet found: improving the quality of life in third world countries, world peace, the development of the health system, the stabilization of the situation in the middle East. It is much more important than photos of dogs and children on the Internet. I am sure that social media is an effective way of effective communication and marketing tool. But in its importance for the whole world it’s still not penicillin, no car, no computer and no phone.
— Which of your startups you find most successful and why? And (in order of introspection) any errors in its implementation you not escaped?
— Perhaps my last startup, the seventh, was for me the greatest success. We ran it together with my partner seven years ago, and now the company has 450 employees, a turnover of over 50 million dollars a month. All this time we kind of changed, but we eventually managed to build the necessary relationships with clients through the development of leadership skills of our consultants and managers. We were literally on the front line CRM, significantly growing each year. The largest errors, as often happens, there were people. For example, meeting eventually retired when the project firmly on its feet, I was mistaken with the successor, choosing the person who didn’t really believe in the company.
— What are the main mistakes young entrepreneurs repeat again and again?
— The desire to achieve goals and lack of proper attention to the customer and his needs. This is the most common mistake I notice. Entrepreneurs love to “do” things and rush ahead to the goal. But too often — without searching and processing signals supplied by the client, and proper response. Because their business ideas are not able to meet the needs of our customers and therefore do not have the necessary strength.
— Have you ever been in Russia before. What do you think about local entrepreneurs? How startups are perceived in the US?
— This is my ninth visit to the country — and I love Russian entrepreneurs. The majority of them are bold, passionate, talented, persistent and focused on the fact that their start-UPS to become successful.