Entrepreneurial Pitfalls

1. ~ Look Before You Leap ~ Entrepreneurial Pitfalls

2. 1.ENTREPRENEUR TRAPS TO AVOID Entrepreneur as a Technician • Learning Phase • More resource expended than gathered • Typically running cash flow negative • Entrepreneur as a “technician” • Entrepreneur wears many hats • Survival is a day-to-day concern • Start-up Trap • Expenditure = risk • “Dream stealers” prevail • Self-confidence is questioned • Comfort zone is calling loud • Entrepreneur tempted to bail just prior to growth phase Traps & Evolving Management Styles X Start-up Trap Many success stories never see the light of day

3. 1.ENTREPRENEUR TRAPS TO AVOID Entrepreneur as a Technician • Learning Phase • More resource expended than gathered • Typically running cash flow negative • Entrepreneur as a “technician” • Entrepreneur wears many hats • Survival is a day-to-day concern • Start-up Trap • Expenditure = risk • “Dream stealers” prevail • Self-confidence is questioned • Comfort zone is calling loud • Entrepreneur tempted to bail just prior to growth phase X Start-up Trap Many success stories never see the light of day * Brian Tracy

4. 1.ENTREPRENEUR TRAPS TO AVOID Entrepreneur as a Manager • Founders Trap • Needs exceed founder ability to control • If delegate accountability & responsibility = continued growth • If not = growth ceiling • Inability to make decisions is main cause • Success Trap • Meeting or exceeding expectations • Typically 5+ year mark ** • Must reinvent or slowly die • Why? • Ride a good thing too long • When KPI down-trend, may be too late • Must commence new lifecycle while cash flow supports it X Start-up Trap Entrepreneur as an Entrepreneur

5. 2.VISION - YOU ARE BLIND WITHOUT IT • It all starts with future state in mind • BHAG – Big Hairy Audacious Goal • A true BHAG is clear and compelling • Serves as unifying focal point of effort, and acts as a clear catalyst for team spirit • It has a clear finish line, so the organisation can know when it has achieved the goal • High Achievers • Understand perception is reality. • A true vision forefront of mind will eventually become a reality with applied effort

6. 3. GENUINE PAIN RELIEF • Value Proposition • Value is in the eye of the buyer (…not yours!!) • Quantitative statements • about the uniqueness of the business & precisely why a customer should engage. • Describe it as – “a market need in search if a solution” • Your offering must be market driven not technology driven

7. 4. HEARD THESE?.... • Build it & they will come…. • We have no competitors…. • Our mousetrap is better than X’s…. • We have first mover advantage…. • We are funded – now we can relax…

8. 4. WHAT THEY MEAN!.... • Build it & they will come…. • No Plan. We don’t need to market - beat a path to our door • We have no competitors…. • We have not looked or there is no market or S&A • Our mousetrap is better than X’s…. • We hope the market will agree • We have first mover advantage…. • No patent or competitive differentiator • We are funded – now we can relax… • Naïve to investor demands and process

9. 5. ROUTE TO MARKET • Technology risk vs. Commercial risk • Too many business focus on the technical aspects of product/service • Feature/Function set overload • Investors generally assume the technology works • How do you use this thing as a business? • Vs. property, shares, etc • How do you mitigate commercial risk

10. 6. VALUE REALISATION & EXITS • Ongoing vs. Out & gone • they don’t need to be the same • You all need to get something for your hard work • VR/Exit misalignment • Often cause of most board level/ issues • When others can see how/when they realise value, they will be more willing to help.

11. 7. INVESTORS – KNOW THY DEMON • Know the Difference: • FFF, HNW, Angels, VC, Project Finance • Vulture Vs Venture Capital? – time driven model • The “Golden Rule” • Those who have the gold makes the rules • Genuinely know what & who you are getting into bed with. • Walk a mile in their shoes • Present info in the form they want/need to make a decision

12. 8. MANAGING GROWTH • Seems simple…..growth = success? • Generally • Single largest & fastest growth cost is people • Next is buildings/equipment • You have less control over revenue generation but ultimate control over expenditure • Scalability • can the current business model scale for growth? • if not change or don’t & it will self-implode.

13. 9. LEADERSHIP LONELINESS • It is exhilarating but it can also be very lonely….. • CEO, Entrepreneur, leader, chairman are all human….. • Express doubt at times about strategy, products, ideas & self • Innovation calls for outside of box thinking = “crazy” ideas, “the path less travelled”, pathfinder not follower……. • Difficult to express ideas/issues/concerns to: • Board – they generally employ you, judge risk & your rationality • Spouse/Friends – don’t have the full context or day-to-day pressure • Many may get the wrong message & panic: • Staff:(resign), Customers:(drop sales), Market:(share price), Advisors: (Banker) • Some studies indicate it may be the biggest contributor to leadership failure & workplace depression • CEO forums, peer networks, functions like these, mentors

14. CONCLUSION - ENTREPRENEURSHIP • No guarantee for success….But • ….you can maximise chances! • Often outside your comfort zone….But • ….fortune favours the brave! • There is no journey without a destination….But • ….often its more about the journey & the 1st step! • The unknown breeds fear & uncertainty….So • ….study widely & deeply – overcome the “unknown!”

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