John McArthur’s New Venture Blog

Several times over the last two months, I’ve been approached by people saying something along the lines of, “I’ve got this great idea for a new product that could generate millions of dollars in monthly revenue, but I don’t have the time, money, or expertise to develop it.  What should I do with my idea?”  A similar question was posted on LinkedIn, and I took the time to post an answer.   My answer to the question in turn prompted a small flood of additional requests, and I received, for what it’s worth, the LinkedIn designation, “Best Answers in Business Plans,” by the guy who posted the question.

I encourage you to take a look at some of the other answers that were posted.  For those of you who don’t want to take the time, however, I’ll sum up.  Here are the Top Five responses to what you should do with an idea for which you have no time, money or expertise to develop. (more…)

My partner formed his first company with two other partners more than 15 years ago.   The story goes something like this.  They each put up $25,000 and several years of sweat equity, and over time, built the company to a substantial, profitable business.  They sold the company for somewhere around $42 million, part cash, which is good, and part stock,  which over time became less valuable than compost.  Still, not a bad return for a $75,000 investment.

This past week I attended Storage Networking World in San Diego talking to the best and brightest in the storage industry.  Some of these folks are scary bright.  I have given out about half a box of business cards, collected a similar number, explained what we are now doing, introduced my partner around, and listened carefully to companies regarding what they need to help their businesses grow faster.  One of the most interesting topics, however, was hearing the life-cycle of a company from idea, to investment, to product, to growth, to exit in the form of an IPO, acquisition, or in some cases, closing the doors. (more…)

By the title, you might be wondering how this post could be in keeping with the stated goal of this blog: to be “A business resource for entrepreneurs and inventors. ” But I thought it might be useful to prompt a discussion around the definition of an “analyst.” Perhaps more accurately, I should say “types” of analysts. The reason this is important is that, if you have an idea or an invention, and you decide to seek outside investment to build a company around your idea, at some point in the conversation you will be asked the question, “How big is the market for your solution?” So who do you ask? Sorry: “Whom do you ask?” The only logical answer, in my opinion, is a “market analyst.” By the way, that’s what I was for eleven years, so you need to consider that, when you evaluate the credibility of my statements.

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I can not stress enough the importance for startups of having a good web-hosting service and good web presence.  One mistake that I made in launching Walden Technology Partners, Inc., was in not first hiring a website designer (in our case, my niece), finding a good webhosting provider (in our case, HostMySite) and getting the site up and running from day one, when I changed my LinkedIn profile.

Evolving a blog from one that is a single orator addressing an audience of none into an interactive and supportive community of like-minded entrepreneurs requires some real work.  And I am getting a great deal of advice on the topic.  Here’s a sampling from my expert-in-residence, my brother, Ken.  I received the following advice from him today:

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My brother, Ken, has often said, “If you focus narrowly enough and spend a few months researching intensely, you can become the world’s leading expert on a topic.”  The key here is focusing narrowly enough.  As you can tell, if you clicked on the link, Ken became, if not the, at least a leading expert on affiliate marketing. 

Because Ken focused on affiliate marketing, he created something else which is valuable for many of you who are trying to launch a new venture.   He created a community.  And from that, he also created a virtuous sales and marketing cycle.  Ken started with a service, which he developed, sold and delivered by himself. Later, he built training materials and supported the authoring of several books, which, indirectly helped promote the service.  He’s now developed a conference business that helps promote the training materials, which helps promote the service.  More than that, however,  he has built up a community of similar companies and actively promotes and speaks at the conferences of his competitors.  And I’m reasonably sure that he retains at least a small sliver of the revenue that passes through his affiliate program to a competitor.

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We are fast approaching the 10th anniversary of the publication of  “The Innovator’s Dilemma,” by Harvard Business School professor,  Clayton Christensen.  Like many of you, I’ve read and re-read the book.  But, if you are one of the few who haven’t read this book, which carried an Amazon sales ranking of #1,285 on April 5, 2007, it seems like the 10th anniversary would be a good time to do it. 

I’ve also read “The Innovator’s Solution,” with an Amazon sales ranking of #1,617, which attempts to answer the “So what should I do about it?” question that logically follows from “The Innovator’s Dilemma.”   The respective rankings only reinforce the notion that there are more people willing to point out problems than there are people willing to solve them.  I recommend this book for anyone who wants to stop complaining about how customers are being duped by the manufacturers of low-quality products and figure out how to participate in the next opportunity wave.

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