Ever notice how much time you can spend emailing back and forth when trying to setup a meeting?...
Gil Scott-Heron—“Paint It Black” [Spoken Word]
Small Talk at 125th and Lenox (Flying Dutchman 1970).
Funkadelic - I Got A Thing, You Got a Thing, Everybody’s Got a Thing
So good, the intense desperation of the song always got it.
Never underestimate the power of the pen, or as is the case in our digital world, the keyboard…
Yesterday I wrote about domain experience. While having domain experience is not the be all end all for launching a successful startup, it can give you an “unfair advantage” as Mark Suster put it over those without such experience. What I failed to mention though is that just because you have expertise does not mean you have expertise in operating a business.
There are plenty of people that develop deep expertise in the course of their career. If you spend a any amount of time in an industry putting in at least a modicum of effort, chances are you will acquire competency. By competency, I mean displaying confidence in utilizing a variety of skills built upon a base of knowledge honed by daily application. Thus for the work you were and are engaged in, you can do the work at a consistent level to produce a quality work product. In short, you know your shit.
The skills one learns in the course of gaining domain expertise however are not the same skills needed to start and build a company. In fact, these skill sets are rarely present in the same person. It is no different than the dilemma faced by highly skilled coders who can write a program to do just about anything, yet would get lost in reading through contracts or flub a sales pitch or hire the wrong people. They know the language of machines, but not the language of business. And just so it is clear that I am not picking on techies, there are plenty of newly minted MBA’s that are equally clueless when it comes to launching a business. They can put together a mean Powerpoint presentation or write a nice looking fifty page business plan though.
The people that start businesses are what I call operators and some might call hustlers. They do not necessarily have ideas, they do not come with a deep well-spring of knowledge, and they may not overwhelm you with their intellectual firepower. What they do possess however is an insanely stubborn focus on execution and a no holds barred desire to win. They find a way to get the deal signed, to hire the most sought after talent, to pull a partnership together, to get around the obstacles, and to keep the whole ship together. They lead the strategy but they roll up the sleeves to get down to the details. In a nutshell, the operator is relentless execution machine.
If you are the domain expert, do you have what it takes to be the operator as well? When the two are in the same person, you have a formidable entrepreneur that has the idea, the knowledge, the relationships. and a strong bias towards getting stuff done. As I mentioned though, it is an extremely rare combination of skills. If you do not have that operations orientation, that is not a cause for concern as it is not an uncommon situation in early startups that are more led by vision. At some point however, once the startup gains a bit of traction, you would be well served to find someone that can be your operator. That does not mean replacing yourself as CEO, but to find a second in command, chief operating officer, that can run the ship in your steed while you focus on product and strategy. Over time you can gain more experience and confidence in the operational details, which I highly recommend getting a handle on especially given the investor predilection for replacing founders (which almost never works out well).
The point is, domain expertise is an important advantage that entrepreneurs can bring to the table. However it is not the only thing or even that important a factor in successfully launching a startup. You need vision and passion and relentless execution more than deep knowledge or experience. As you contemplate your own entrepreneurial journey, do you and your team have the right combination of skill and motivation to march forward?
Have to disagree here. Not with the fact that those foreign graduate students are going back to their home countries. That is indeed a trend that has been in the works for the past decade. They are going back to economies that have improved significantly in that time, providing an incentive for those talented students to return home.
What I disagree with is that there is still a significant gap between an opportunity in the US and an opportunity in other countries. I have spoken with many entrepreneurs, some of whom are close friends, and they have expressed deep frustrations with the cultural and regulatory roadblocks to entrepreneurship in their home countries. So yes, there are opportunities, but the barrier to entry is still much steeper there than in the US. If we get immigration reform passed now, we have a chance to convince these talented individuals to return to the US.
Enterprise software is competitive, so the need to have smart, savvy sales reps delivering insights face-to-face to potential buyers has not gone away. There’s no click-to-buy. You need real live, breathing, resource consuming human beings. As a result, 35% of the total employees at these companies, on average, were in sales and marketing at the time of the S1 filing, with a median of 37.6%.
Given the salaries commanded by talented sales reps, this translated into major expenses. As a percentage of revenue, sales and marketing expense was 45% on average, versus 20% for R&D and 15% for G&A respectively.
“It’s damn hard to build an enterprise company” via PandoDaily
The biggest challenge, and thus the greatest opportunity, for the enterprise tech sector is in the more efficient scaling of sales. This is why the SMB tech sector provides the most intriguing opportunities for innovation in how we sell. SMB tech companies require distribution on a consumer tech scale but with a more demanding customer base and more complex product.