The first time I learned that experience was the best confidence builder was my first real assignment for Barry. I had to make 300 cold calls and try to get them interested in having Barry speak at their organization. To say that I was terrified is an understatement. I had no idea what to say (having had zero experience in sales), and I was uncomfortable with the idea phoning strangers. I was afraid of being chewed up and spit out by those with experience who would be able to tell that I was a rookie. There were scenarios in my head eerily reminiscent of the hazing rumors that floated around my college campus, only in a business setting. (I’ve never lacked for imagination or a sense of melodrama.)

I stared at the list for nearly a full day before I built up the courage to pick up the phone. My first call went to voicemail, and I was unbelievably relieved. For some reason it had never occurred to me that I would get someone’s voicemail. With each subsequent call I would pray that it would go to voicemail, making myself progressively more nervous. At one point I was so nervous that I tripped over my words and then burst out laughing on another person’s voicemail before I repeated my message (although I think they might have been one of my callbacks). After that I started loosening up, but I hung up the phone red faced and stammering.

Every day I would increase the number of phone calls I made as I became more comfortable with the prospect of speaking to total strangers and making Barry look good at the same time. Three hundred phone calls later and I could do it in my sleep. Occasionally I still stumble over my words, but it’s no longer the "I have to take 10 minutes and wallow in humiliation" ordeal that it used to be.

The important lesson learned: if you don’t bite the bullet and just do it, you’re going to be uncertain, nervous, or afraid whenever a similar situation arises. There is no substitute for experience.

~Katherine

Based on a comment to my first post, I thought I’d talk a little about the differences and similarities of the worlds of business and chemistry research.

In both business and chemistry, you quickly find out what works and what doesn’t–at least in the marketing work that I do. Then you tweak or completely change your method until you find something that does–or, in chemistry, you do it until you find something that works even better. The problem-solving aspect of chemistry is something that I’ve applied over and over to my work for Barry.

The most fundamental difference between chemistry and business–especially marketing–is the lack or need of people skills. In order to be a research chemist, you need to be able to communicate your ideas and your projects, but most of that is done in papers with the occasional supplemental seminar (and, if you’re a grad student, oral and written defenses of your doctoral project). However, these research papers and seminars are very technical–even as an undergraduate I had a hard time understanding some of the seminars, especially if the material was something that was fairly specialized. Although chemists can talk chemistry to each other, they will have a difficult time communicating their idea to a biologist who has only a rudimentary background in chemistry. Even if both participants in the conversation have a strong chemistry background, they may have specialized in different areas, and they may still have difficulty understanding one another (example: a chemical biologist–a division of organic chemistry–talking to someone in proteomics–a division of analytical [instrumental] chemistry). Chemistry is just one of those subjects that is difficult to water down for someone who isn’t familiar with it. Even when I’ve thought that something was clear, it wasn’t. Occasionally I’d get a phone call while in the research lab.

"I can’t talk right now, I’m collecting fractions."

"You’re WHAT?"

"I’m running a column."

"A what?"

"It’s a purification technique where I have this big glass thing called a column and it’s filled with this stuff called silica gel and I dissolved my product in solvent and now I’m running it through the column and then my product separates and while it’s doing that…do you understand what I’m saying?"

"Um…you’re doing chemistry?"

"Yeah I’m in lab, I’ll call you back later."

In business, if you don’t have people skills–if you can’t  talk to people and communicate your ideas verbally, no matter what they are–then you won’t get very far. You have to be able to quickly condense ideas into an easily understood form that someone can understand and relate to instantly. If they have to ask too many questions, or listen to a too long response, you lose their attention. Eventually my phone conversations went like this:

"Where are you?"

"I’m in lab."

"Oh, I’ll talk to you later." Click.

Although, to be fair, I have met some scientists who have excellent people skills.

~Katherine

My name is Katherine, and I will be posting on Barry’s blog as a guest author while he is out of the country (and away from all communication devices).

I began working for Barry part-time a little over two years ago. I met him through my mother, whose business utilized Barry’s capabilities as a business consultant. He had mentioned that he needed someone to help him with organization, and I was recommended as one of the most organized people my mother knew.

Barry gave me a small assignment–to find contact names and email addresses for some organizations. He told me not to spend more than two hours on it.

"Sounds great," I smiled. Oh my God, I’m never going to be able to finish it and I’m going to be broke all summer, I thought.

I had absolutely no idea what I was doing, but luckily my Google search skills were sharp from years of using search engines for school projects, and I was able to complete the assignment. I assured Barry I could do more of the same–there was no way that I was going to let this job go: I got to work out of my home, I could sleep until 10, and I could work in my pajamas. What more could a college student want?

Well, if said college student is a chemistry major working for a man who specializes in entrepreneurship, a little background in marketing or small business would be nice. I was soon to find out that while knowledge isn’t necessary to be successful–although I wouldn’t recommend attempting to do any sort of chemistry experiment without some paper research–it definitely helps to give a sense of confidence. This is probably one of the most important lessons I’ve learned while working with Barry–along with the fact that there is no substitute for experience.

Being a Cubs fan, I am familiar with adversity and strange happenings. None is stranger than the case of outfielder, Adam Greenberg. ("Adam Greenberg’s grandfather was indeed Hank Greenberg — Abraham Hank Greenberg, no relation to the Hall of Fame slugger.") I have an especially close affinity to Greenberg since he is one of the few Jewish baseball players currently in the system.

He was called up from the Chicago Cubs minor league system and faced his first major league at bat last year on July 9, 2006 against Florida Marlins pitcher Valerio de los Santos. On the first pitch of his major league career at bat, he was hit by de los Santos. He went down immediately and suffered a concussion. He never returned to the Chicago Cubs. In fact, on Friday, he was released from Class AA West Tennessee affiliate. It seems that his baseball career is over.

Strangely enough, his career on base percentage is a perfect 1.000 despite having zero official at bats (since hit by a pitch sends you to a base for those not understanding baseball).

I talk alot about the role that luck and timing play in business and life. How else do you describe this incident as bad luck and timing; Greenberg has been preparing his whole life for a chance to play in the majors and with his first pitch, he gets hit by it. It will be interesting to see where Greenberg goes from here. I would love to interview him for the next book!

ABC’s 20/20 is getting into the act, giving 3 people $1,000 to make money in 20 days.

"How easy is it to make money? If someone handed you $1,000 and gave you 20 days to turn a profit, would you have any idea where to start? "20/20" challenged three would-be entrepreneurs to find out. To give them guidance we brought in famous get-rich guru Robert Kiyosaki to offer them his secrets for money-making success."

Although these types of stunts do raise the awareness of entrepreneurship, they are mostly ridiculous because businesses take 7 to 10 years to build. The true entrepreneur is one that has the resiliency to ride it out.

One of my favorite movies of all time is Jerry Maguire. I quote the movie at every presentation (Show Me the Customers, I say instead of Show Me the Money). Here is the full Jerry Maguire "Mission Statement" over which the character loses his job. Until recently, I never knew it even existed!

From VC Confidential:

1. “Our projections are conservative.” An entrepreneur’s projections are never conservative. If they were, they would be $0. I have never seen an entrepreneur achieve even her most conservative projections. Generally, an entrepreneur has no idea what sales will be, so she guesses: “Too little will make my deal uninteresting; too big, and I’ll look hallucinogenic.” The result is that everyone’s projections are $50 million in year four. As a rule of thumb, when I see a projection, I add one year to delivery time and multiply by .1.
2. “(Big name research firm) says our market will be $50 billion in 2010.” Every entrepreneur has a few slides about how the market potential for his segment is tens of billions. It doesn’t matter if the product is bar mitzah planning software or 802.11 chip sets. Venture capitalists don’t believe this type of forecast because it’s the fifth one of this magnitude that they’ve heard that day. Entrepreneurs would do themselves a favor by simply removing any reference to market size estimates from consulting firms.
3. “(Big name company) is going to sign our purchase order next week.” This is the “I heard I have to show traction at a conference” lie of entrepreneurs. The funny thing is that next week, the purchase order still isn’t signed. Nor the week after. The decision maker gets laid off, the CEO gets fired, there’s a natural disaster, whatever. The only way to play this card if AFTER the purchase order is signed because no investor whose money you’d want will fall for this one.
4. “Key employees are set to join us as soon as we get funded.” More often than not when a venture capitalist calls these key employees who are VPs are Microsoft, Oracle, and Sun, he gets the following response, “Who said that? I recall meeting him at a Churchill Club meeting, but I certainly didn’t say I would leave my cush $250,000/year job at Adobe to join his startup.” If it’s true that key employees are ready to rock and roll, have them call the venture capitalist after the meeting and testify to this effect.
5. “No one is doing what we’re doing.” This is a bummer of a lie because there are only two logical conclusions. First, no one else is doing this because there is no market for it. Second, the entrepreneur is so clueless that he can’t even use Google to figure out he has competition. Suffice it to say that the lack of a market and cluelessness is not conducive to securing an investment. As a rule of thumb, if you have a good idea, five companies are going the same thing. If you have a great idea, fifteen companies are doing the same thing.
6. “No one can do what we’re doing.” If there’s anything worse than the lack of a market and cluelessness, it’s arrogance. No one else can do this until the first company does it, and ten others spring up in the next ninety days. Let’s see, no one else ran a sub four-minute mile after Roger Bannister. (It took only a month before John Landy did). The world is a big place. There are lots of smart people in it. Entrepreneurs are kidding themselves if they think they have any kind of monopoly on knowledge. And, sure as I’m a Macintosh user, on the same day that an entrepreneur tells this lie, the venture capitalist will have met with another company that’s doing the same thing.
7. “Hurry because several other venture capital firms are interested.” The good news: There are maybe one hundred entrepreneurs in the world who can make this claim. The bad news: The fact that you are reading a blog about venture capital means you’re not one of them. As my mother used to say, “Never play Russian roulette with an Uzi.” For the absolute cream of the crop, there is competition for a deal, and an entrepreneur can scare other investors to make a decision. For the rest of us, don’t think one can create a sense of scarcity when it’s not true. Re-read the previous blog about the lies of venture capitalists, to learn how entrepreneurs are hearing “maybe” when venture capitalists are saying “no.”
8. “Oracle is too big/dumb/slow to be a threat.” Larry Ellison has his own jet. He can keep the San Jose Airport open for his late night landings. His boat is so big that it can barely get under the Golden Gate Bridge. Meanwhile, entrepreneurs are flying on Southwest out of Oakland and stealing the free peanuts. There’s a reason why Larry is where he is, and entrepreneurs are where they are, and it’s not that he’s big, dumb, and slow. Competing with Oracle, Microsoft, and other large companies is a very difficult task. Entrepreneurs who utter this lie look at best naive. You think it’s bravado, but venture capitalists think it’s stupidity.
9. “We have a proven management team.” Says who? Because the founder worked at Morgan Stanley for a summer? Or McKinsey for two years? Or he made sure that John Sculley’s Macintosh could power on? Truly “proven” in a venture capitalist’s eyes is founder of a company that returned billions to its investors. But if the entrepreneur were that proven, that he (a) probably wouldn’t have to ask for money; (b) wouldn’t be claiming that he’s proven. (Do you think Wayne Gretzky went around saying, “I am a good hockey player”?) A better strategy is for the entrepreneur to state that (a) she has relevant industry experience; (b) she is going to do whatever it takes to succeed; (c) she is going to surround herself with directors and advisors who are proven; and (d) she’ll step aside whenever it becomes necessary. This is good enough for a venture capitalist that believes in what the entrepreneur is doing.
10. “Patents make our product defensible.” The optimal number of times to use the P word in a presentation is one. Just once, say, “We have filed patents for what we are doing.” Done. The second time you say it, venture capitalists begin to suspect that you are depending too much on patents for defensibility. The third time you say it, you are holding a sign above your head that says, “I am clueless.” Sure, you should patent what you’re doing–if for no other reason than to say it once in your presentation. But at the end of the patents are mostly good for impressing your parents. You won’t have the time or money to sue anyone with a pocket deep enough to be worth suing.
11. “All we have to do is get 1% of the market.” (Here’s a bonus since I still have battery power.) This lie is the flip side of “the market will be $50 billion.” There are two problems with this lie. First, no venture capitalist is interested in a company that is looking to get 1% or so of a market. Frankly, we want our companies to face the wrath of the anti-trust division of the Department of Justice. Second, it’s also not that easy to get 1% of any market, so you look silly pretending that it is. Generally, it’s much better for entrepreneurs to show a realistic appreciation of the difficulty of building a successful company.

In a recent newsletter, I said that this summer I would be able to fulfill a life long dream by saying (since I will be in Australia) - "Put another shrimp on the Barbie".

Fred Phillips writes me:

"Barry, I was in Oz for the 1985 operations research meetings. The conference banquet was an Aussie barbecue. The chef kept spraying the coals with a garden hose so they wouldn’t vaporize the little crustaceans. One of our PhDs in O.R. asked him, "Is that water you’re spraying on the grill?" Chef replied, "No, mate, it’s champagne."

Jonathan writes:

My children and I are big American Idol fans. It is a highlight of our evenings when we can watch these kids sing their hearts out and hear what Simon has to say. So I eagerly awaited Simon Cowell’s new show tonight, American Inventor. This was billed as American Idol for Entrepreneurs. The judges (including a favorite of mine, Doug Hall) see 1000 people, choose 100 then widdle it down to 9. Each then gets $50,000 to improve their idea. The winner (decided by America of course) gets $1M.

I was mixed on the first show. The inventions were interesting to hear, but I felt at times the show tried to hard to mimic American Idol. The passion and emotions seemed abit forced in some areas. It will be interesting to see how the show develops.

What did you think?

PS: Today, St Patty’s Day is my mom’s 70th birthday. I know she always reads my blog because even after 40 some odd years, she still corrects my spelling mistakes She also says its the best way to keep up with what I am doing since she lives 1,000 miles away. Happy Birthday, Mom. You done good with me.

I love this item for the crazy, unpredictable and sometimes dangerous world we love it. Ready Freddy is an all in one emergency kit that has over 100 survival essentials…gloves, duct tape, radio. blankets, air filter masks, food, water…none of the kit requires batteries or electricity. So when things really get hairy, you will be ready!