Entrepreneurship in the Digital Age

For a long time, becoming an entrepreneur seemed like something only a select few could attain. While it’s true that entrepreneurship requires a certain type of personality, no longer do the vast majority of people have to resign themselves to “working for the man” because the resources to become their own boss are out of reach.

The beauty of technology is that anyone can become an entrepreneur; there are multibillion-dollar technology firms that were started by children barely out of school, in tiny studio apartments.

My own first venture was a self-funded Internet business that I started with a partner in 1997. It was still early years for the Internet and digital media, and we were some of the first adopters with a B2B application for magazine publishers. With a little angel money, we were able to grow the business organically through hard work.

Then, in 2000 when everyone was raising tens of millions of dollars and going public, we decided that raising money would be a more effective way to expedite our growth and eventual exit. This turned out to be what my partner and I later referred to as our $16 million education. We raised $16 million in March 2001—literally on the day that the Nasdaq hit it’s highest point and proceeded to crash.

We had a profitable, $3 million per year business when we raised our funding. Two years later, we had over a hundred employees, we were burning cash and everyone around us was going out of business—the proverbial bubble burst.

My saving grace was that I had started a small division of the company called IndustryBrains. In 2002, when our VC’s were looking to downsize and eliminate waste, they decided that my little division was not part of the long-term strategy. I saw this as an opportunity to spin it out to a more streamlined, angel-funded business.

Within six months, IndustryBrains was a high-growth, profitable business. We were auctioning clicks on premium content sites before Google was even selling clicks. In less than three years, IndustryBrains morphed into a $15 million a year business and we sold it for $30 million in 2005.

Since then, I have launched two other Internet businesses—Madison Logic in 2009, a $40+ million media business, and Bombora, which is a data business started only six months ago that is already generating several million dollars a year.

During my lengthy tenure as an entrepreneur/CEO, I have certainly encountered my fair share of pitfalls, surprises and opportunities, and learned many valuable lessons along the way that I think can be useful for budding entrepreneurs:

1. Any idea you can possibly think of has already been thought of by someone else before you. That shouldn’t discourage you, though, because success is all about execution. Find a new way to make it happen — better, faster, easier, cheaper.
2. Whatever your idea is, get ready to change it, fix it, optimize it and pivot. Even if you think it is perfect, either the market will change or competition will make you change. What makes a good CEO is the ability to identify and embrace change, and to get your employees to move quickly.
3. Surround yourself with people that are specialists, and better and/or more experienced than you, at every major post.
4. Build for scale. You need to build things so they can be repeated with little to no effort. You can’t scale a business if every project is custom to each client.
5. Every part of your business should be able to run if someone is on vacation or leaves the company. Build an infrastructure that can withstand some hits along the way.
6. Listen to your clients, but don’t let that feedback be your only guiding force. Henry Ford once said, “If I had asked my customers what they wanted, they would have said ‘a faster horse.’” The point is — you are the innovator; listen to their needs, but you’re in charge of how the solution is executed.
7. Products need to be actionable; often entrepreneurs build too much, too big and spend too much time or money before testing with clients.
8. Fund raising is where most entrepreneurs fail. How much, from whom and when you raise your money can make all the difference between success and failure. Many entrepreneurs raise too much money, essentially selling the company off at an early stage without even knowing it. Raise only what you need from the most flexible source at the start of the process. Choose your angels strategically.
9. In this market where there are more VCs and more money than we have likely ever seen, it is tempting to take a venture round. However, you need to understand the revenue potential of your business and likely exit strategy. Most businesses will never be large enough to justify a VC investment. If you take this money and don’t grow large enough, it is most likely that you will exit your own business one day and literally receive nothing.

Being an entrepreneur is one of the most rewarding things you will ever do. But it is also one of the most challenging things you could possibly attempt. It isn’t for everyone. You need to be ready to live and breathe your work, your industry, and every aspect of the business from managing people, product vision, marketing and customers. If you feed your passion with a very specific calculated strategy, you’ll find your way to successful entrepreneurship.

Image Credit: CC by Heather Katsoulis