Advice from an Entrepreneur, Intrapreneur, Investor and Advisor
We recently hosted a conversation between Fiifi Founder & CEO, Theron McCollough, and Lean Startup Co. Advisor, Chris Guest, focused on Theron’s experiences working in the world of startups and his recent return to the role of an entrepreneur as he launches his new venture.
Given Theron’s background advising and investing in hundreds of startups, what insights has he taken with him as he re-enters the world of entrepreneurship? And now that he is a player again, does he follow the advice he would have given when he was a coach?
Find out in this new episode, and read on below for a few of our favorite takeaways…
Your Customer Knows Best
For more than a decade, Theron McCollough has been working in the world of startups. Fairly early on in his career — when he was working with Pivotal Software — he began to notice how Lean Startup techniques could help a business scale.
The simple act of reaching out to the customer can be incredibly helpful and enlightening. “You would be amazed at what you find out,” Theron says.
It’s one of the things that is easy to understand in theory, but Theron cautions, entrepreneurs have to put it into practice to see how it works. “Until you actually do it, you don’t understand what the struggles are,” he says, adding, “once you get in there, you realize how much information every single customer or potential customer can give you to save you from wasting time and energy.”
As an added bonus, it’s also a great way to develop a customer base. If you adopt their feedback and apply it to your product or business, “they’re going to be a customer for life.” Because they’ll not only feel heard, but you’ll have created something that made their business (or life) better.The simple act of reaching out to the customer can be incredibly helpful and enlightening. “You would be amazed at what you find out.” Click To Tweet
Building Your Personal Ecosystem
Customers aren’t the only people entrepreneurs should think about when starting a business, though. Your network and the people around you as you pursue your business are just as important because, as Theron puts it, you’re building your ecosystem.
When he was at Acceleprise, a B2B SaaS accelerator, they spent a lot of time connecting founders with mentors, followed by businesses and enterprises that could benefit from their services. And when Theron was working at Silicon Valley Bank, they put a lot of work into being more than just a financial institution and made it a big part of their practice to bring the right people together.
They did a lot of networking events that were intended to help entrepreneurs meet other co-founders, potential customers or potential investors. “We felt pretty strongly that a bank is a bank,” Theron says, “anybody can take your money and hold it for you.” But there is a lot of power in community, and connecting with people is extremely important.
Optimist. Realist. Fan of Failing.
Theron was an entrepreneur long before he discovered Lean Startup techniques. One of the things that appealed to him about the process was how it approached failing as part of the process.
“I think I’m an interesting combination of an optimist and a realist,” he says, “If you’re a founder and you’re an optimist, you’re going to be let down. But if you’re a realist, then you’ll roll with the punches a bit better.” So a big thing for him was being able to look at his failures as a learning process rather than taking it as a loss. The latter just leads to frustration. But the ability to figure out what you learned and apply it to the next iteration is a much more positive and sustainable approach.
That’s especially true when you’re managing teams of people. Theron thinks that you’ll get a lot more return and energy out of your team by being able to pinpoint learnings and build off of that. Failure can — and should — be seen as a positive because now you know what to do (or not to do) on your product’s next iteration.
Interestingly, Theron has noticed that failure is perceived very differently in the startup world versus in the corporate world. In larger companies, failure can be looked upon very negatively. But in the startup world, it’s becoming more commonly looked upon as part of the process and having learned something important. The optimist in Theron hopes to see more enterprises embrace the failure-as-a-positive mindset. However, the realist in him thinks this is still a pretty long road for large corporations, but if enough people are open to the idea, it can happen.Failure can — and should — be seen as a positive because now you know what to do (or not to do) on your products next iteration. Click To Tweet
Getting Back to His Entrepreneurial Roots
After years of helping startups get their companies off the ground, Theron is returning the role of entrepreneur himself with his software startup Fiifi, a system of record and deal flow management for early-stage investors. Not surprisingly, the idea came from doing his work helping startups.
“As an entrepreneur, it was hard for me to see this problem over and over and over,” Theron says, speaking of the growing frustration he had with the software available to early-stage investors. He found that he had to use multiple pieces of software to look up or understand information important to each business, and it was, as Theron puts it, “a big time suck.” He started asking friends and people in his network if they had the same problem.
Eventually, it was consuming his evenings and weekends. There was an obvious problem that could use a solution. So Theron decided to build it himself.
It’s still early days for his product, but he has already been practicing what he preaches and has gone to his potential customers to ask them what their pain points are and what they would like to see as a better solution. “By the time you get to the point of asking an investor for money, they should already be on board and ready,” Theron says. It’s just good practice. Especially in his case, since investors are his customers.
Even when he pitched to investors who weren’t ready to cut a check, Theron saw that as part of the fail-fast process and an opportunity to make his product better, and perhaps, ready for the investors the next time he has the opportunity to pitch again.
He is careful, however, not to be too beholden to any one part of the process just yet. He knows that he could be slightly off about the customer or with the product itself, so he emphasizes the importance of continuing to test and iterate against all aspects until you find the right product-market-fit.
Make Lean Startup Work for You
Having worked in the startup world in multiple roles — he’s been an entrepreneur, an intrapreneur, an investor, and an advisor — Theron’s in a unique position to weigh in on how the Lean Startup approach is perceived from multiple points of view.
As an entrepreneur, it really helped him focus on the customer to get to the crux of what changes needed to be made to a product to make it valuable and, ultimately successful. It also helped reformat what it meant to fail and make it a positive part of the process.
However, Theron cautions that the Lean Startup method is something that you need to put into practice — not just have read about — for it to work. You have to be open to new ideas, speak to your customers, and, of course, fail fast. It’s a process that works if you put in the work.
But even if Lean Startup methodologies are paramount to your final product, you shouldn’t be talking about that process with VC’s or investors. Because, when it comes to investors, “they don’t care at all.” Theron says that not to be callous, but to be realistic.
“A VC’s business is money, their return on investment,” Theron says, “and in general, they don’t care how you get that return, but that you do get that return.” Generally, they care about three things: does what you’re doing save them money, does it make them money, or does it save them time. If it doesn’t hit at least one of those three things, then it’s not a solution or a discussion they have time for.
But Theron’s biggest opinion about Lean Startup is broader. “There is no right way to do it,” he says, adding, “there’s a lot of ways to get the goal accomplished.” You just have to be adaptable to your environment, willing to put yourself out there, and able to figure out a new approach when something doesn’t work.
Thanks to Shannon Lorenzen for contributing this piece. If you seek to bring the entrepreneurial spirit to your organization, Lean Startup Co. can help.