Tips for Entrepreneurs – Make sure that the dog wants to eat the dog food.


Tips for Entrepreneurs – Make sure that the dog wants to eat the dog food.

So you are an entrepreneur and looking for a VC to fund your business plan? Well, before you go ahead and approach a VC, know their expectation. Understand the world from their perspective.
You should really know what VCs expect in your product/business plan.
Eugene Kleiner,one of the founders of KPCB (Kleiner Perkins caufiled & Byers, supposedly the #1 VCs of Silicon Valley) shares his mantra for startups:

  • Make sure the dog wants to eat the dog food. No matter how ground-breaking a new technology, how large a potential market, make certain customers actually want it.
  • Build one business at a time. Most business plans are overly ambitious. Concentrate on being successful in one endeavor first.
  • The time to take the tarts is when they’re being passed. If an environment is right for funding, go for it. Eugene, more than anyone, knew that venture capital goes in cycles.
  • The problem with most companies is they don’t know what business they’re in.
  • Even turkeys can fly in a high wind. In times of strong economies, even bad companies can look good.
  • It’s easier to get a piece of an existing market than to create a new one.
  • It’s difficult to see the picture when you’re inside the frame.
  • After learning some of the tricks of the trade, some people think they know the trade. This reflected some of Eugene’s own humility; he recognized that many venture capitalists thought they were experts when they had just a bit of knowledge.
  • Venture capitalists will stop at nothing to copy success.
  • Invest in people, not just products. Eugene always respected founding entrepreneurs. He wanted to build companies with them not just with their ideas.

Honestly, what sounds like a generic set of statements is actually very practical – Look at what happened to Kiko (story): They were busy with too many ideas and ultimately failed. Same with most of the web 2.0 companies – they don’t understand what business they are in. And VCs? Well they just follow each other (heard of penguin effect?).

Read: Kleiner’s profile /\ B-school for Entrepreneurs

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