12 Nov Sarcasm and rainmaking advice coexist in The Art of the Start
In his new book The Art of the Start: The Time-Tested, Battle-Hardened Guide for Anyone Starting Anything,, Guy Kawasaki, a managing director of Garage Technology Ventures, tells readers that instead of focusing on obtaining venture capital, most entrepreneurs would be better off spending their time generating new customer leads and solidifying customer relationships.
This is a good message, but the delivery is biting and sarcastic. “Bill Reichert, a managing director of Garage, likes to tell entrepreneurs that the odds of raising venture capital are equal to the odds of getting struck by lightning while standing on the bottom of a swimming pool on a sunny day,” Kawasaki writes.
I found it strange to read this because my general impression is that Kawasaki truly is a positive, inspiring fellow who does good things for entrepreneurs. Although he says that it’s almost impossible to raise venture capital financing, the truth is that a large number of entrepreneurs have succeeded. Even more importantly, a large number of entrepreneurs have raised venture capital financing through Garage Technology Ventures.
But Kawasaki seems overwhelmed by the huge number of business plans that he and his colleagues receive. “Think of an investor’s deal flow as a funnel,” Kawasaki writes. “Two thousand business plans enter at the top of the funnel. Two hundred are moderately credible. One hundred are interesting enough to read.”
According to Kawasaki, most business plans are boring because they’re filled with complete lies. “For the sake of investors who are tired of hearing the same old lies and for the sake of entrepreneurs who hurt their case by telling them, here are the top ten lies that entrepreneurs tell investors,” Kawasaki writes. Lie number six involves the notion that companies like Procter & Gamble are too old, big, dumb, and stupid to be a threat to the high-tech startups that want a share of their market. “There’s a reason why people such as Larry Ellison can keep the San Jose airport open late for their private jets while you and I are munching peanuts on Southwest Airlines,” Kawasaki writes. “And it’s not because they are old, big, dumb, and slow.”
Another example of Kawasaki’s wit: “There may be fifty ways to leave your lover, but there are even more ways for investors to tell you no.”
The impression one gets from reading the chapter called “The Art of Raising Capital” is that Kawasaki wants to do everything in his power to prevent entrepreneurs from wasting any more of his time by asking him to read boring business plans filled with unoriginal lies. Instead of trying to raise venture capital, entrepreneurs should focus on mastering “the art of bootstrapping” and improving their ability to “make rain.”
Even worse than the prospect of going through thousands of uninteresting business plans is the horror of having to listen to bad pitches.
“I’ve long been an evangelist for better pitching because I suffer from a medical condition called tinnitus,” Kawasaki writes. This condition involves a constant ringing in Kawasaki’s right ear, which various medical specialists have attributed to worrying too much, not getting enough sleep, or eating too much salt, chocolate, wine, or cheese. “I have another explanation for my medical mystery,” Kawasaki writes. “The ringing is caused by listening to thousands of lousy pitches.”
After considering the neurological damage that Kawasaki has suffered as a result of listening to lousy pitches, and contemplating the amount of time it would take to sort through thousands of bad business plans, one has to wonder why Kawasaki would have chosen to increase his visibility in the venture capital community by writing this book. The book does not appear to have been written out of a sense of love for one’s fellow man, unless this love is shown by trying to destroy an entrepreneur’s hopes of ever being able to raise financing.
The first chapter of The Art of the Start should be preceded by a disclaimer that Kawasaki does not really hate entrepreneurs, he just wishes that they would focus more on generating new business. This would encourage entrepreneurs to keep reading all the way to the end, where the stellar chapter called “The Art of Rainmaking” provides solid information about how to overcome many of the most common problems entrepreneurs encounter.
This inspiring, informative, and entertaining chapter is well worth the price of the entire book. I wish someone had given me a copy of this chapter back when I was starting my first sales-type job in the publishing industry. It would have made me more effective. Kawasaki’s advice about learning from rejection and setting specific goals for specific accounts puts a positive spin on painful experience and allows psychologically wounded would-be rainmakers to move on to their next meeting with greater confidence. But it’s difficult to find this chapter amid all the negativity of the earlier writing.
Wasting one’s time trying to impress hearing-impaired venture capitalists who are so buried in crummy business plans that they can never hope to dig their way out is not the way to build a successful business. Instead, entrepreneurs should spend their time conducting small-scale seminars, giving speeches, getting published, networking in a proactive way, and participating in industry organizations in an effort to generate new customer leads.
Once these leads have been obtained, entrepreneurs should figure out which secretaries, assistants, and technical administrators carry the most weight inside the organization.
Without a doubt, the most valuable information in The Art of the Start is Kawasaki’s step-by-step guide for sitting down with a customer and getting him to sign on the bottom line. But before a potential rainmaker can close a sale, he needs to figure out how to gain access to the people who spend money.
Secretary-level “key influencers” often spend much of their day shielding a company’s executives from outsiders. For this reason, winning their approval is essential to the success of any sale.
Once a meeting begins, the prospective rainmaker must figure out how to make his prospects talk. The best way to do this is to “create a comfortable environment by asking permission to ask questions.” Once a comfortable environment has been achieved, a potential rainmaker must ask a variety of specific questions about the customer’s organization. The potential rainmaker must pay close attention to the answers he receives, and take notes. When he has learned everything he can, the potential rainmaker will have earned the right to explain how his product or service fills the customer’s needs — but only if it does.
To fully execute Kawasaki’s commands, potential rainmakers must perform a great deal of research on the companies that they are pitching. This requires a sizable commitment of time and energy. But if a would-be rainmaker is willing to expend this energy, he will differentiate himself from his competition and increase his chances of actually closing a deal.
“Rainmakers are expensive, but if they can deliver, they’re worth it,” Kawasaki writes. True “rainmaker” sales types may request generous compensation packages, but they should only receive these packages if they actually succeed at generating vast quantities of new business.
This is important, and valuable, information. Reading this information has made me a more effective, more empowered person. Although certain sections of the book are difficult to get through, The Art of the Start does an excellent job at explaining how to turn a new idea into a successful company, and providing entrepreneurs with the tools they need to go out in the world and start selling.
Teresa Esser is a contributing columnist for the Wisconsin Technology Network and author of the book, The Venture Café. She can be reached at firstname.lastname@example.org.
The opinions expressed herein or statements made in the above column are solely those of the author, & do not necessarily reflect the views of Wisconsin Technology Network, LLC. (WTN). WTN, LLC accepts no legal liability or responsibility for any claims made or opinions expressed herein.