Texas Evening Entrepreneurs

Thanks to our speakers and attendees who attended our first guest speaker event of 2006-07, “Finding Your First Customer”. We’ve captures a few selective quotes and answers to some insightful questions brought up during the session. Enjoy!

Eric Hills

Until you have a customer, you don’t have a product.
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Don’t think of getting a single customer. Think about your first set of customers. Figure out how to work 3 or 4 of them in parallel so that they reinforce each other. No one wants to be the only customer.
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What does it take for someone to trust in you? You should ask yourself, “Do we have something to bring to the table?”
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How do your customers help build and bring in others? An acquisition we did brought a software application and 8-10 customers to our business unit. The application was not mature, and the customers were more unhappy than happy about the product. However, their existence helped the firm use them in a domino approach, which helped land bigger and bigger customers. Those first customers were absolutely critical.
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Read “Crossing the Chasm” if you haven’t already.

Jeff Connally

When starting a business, always start with the end in mind.
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There are international companies…and there are global companies. There is a difference.
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When you are an entrepreneur with motivations, one drive you might not expect is the fact that your employees’ families are relying on the success of the business.
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Branding as a strategic advantage. When a customer asks, ‘who are they?’ talking about a patent won’t help you. At some point you need to differentiate yourself from the competition. Be an “anti-them.” Separate yourself. And understand the customer culture.
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How do you get your first customer? However you can!
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An entrepreneur’s key attributes should be, know what you don’t know. Be curious. Ask open-ended questions. Let them tell you what they need, and teach you a thing or two.
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The definition of wealth is living on less than what you have.
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The great thing about entrepreneurship is that you can screw it up fast, or you can improve it fast.

If customers ask for financials, and you don’t have any…

[Jeff] Make it a no-risk investment for them. It may increase capital costs, but you should be prepared for it.
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[Eric] Have your CFO go in and explain your business model. They will get more comfortable if they know where your company is headed. Just make sure that person is credible and sophisticated!

On needing a patent prior to market…

[Jeff] Patent lawyers say yes but the reality is that you probably will go into the market without one. It is good to go through the proper channels, plus they are cheap ($5-10K). Parents can also give you a position if the technology is yours; help you raise money; and provide a barrier to entry for competitors.

On having mature products before trying to land that first customer…

[Eric] The sooner you get out and talk to potential customers, the better. Consider contract to build, or build a prototype. The best approach is to run a service business in parallel.

On convincing your funders to take a risk…

[Jeff] (pulls out Mastercard) If you are not willing to do whatever it takes, then don’t.
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When you’re raising money, don’t do it if you can bootstrap. Investors can and do take ownership from you when milestones are missed. If an investor spends $60,000 on a term sheet, run the other way.
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[Eric] When you are an entrepreneur, everything takes longer than you think it will. Angel investors know this, and most will not continue to invest if you keep missing milestones.

On locking in customers in the B-to-C market…

[Jeff] Study your customer! One computer maker did this when they targeted the medical space. The first thing they did was to ask their potential customer what they may need, then watch them in action to find out what they really need. Through observations, they developed a handheld that would fit in a lab coat pocket.

On cutting your losses…

[Eric] As soon as things start to go bad, start to think of other strategies or an exit. Money is like oxygen. Make the most of the oxygen you have.
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[Jeff] It is easy to be in denial as an entrepreneur. The good thing about outside capital is that it keeps you honest. They will ask the tough questions and demand results.

On the type of customer to approach…

[Jeff] Think of your ideal, best customer as an “A”, but try out your product with the “D” customer. Then, work your way up.
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You need a champion out of your first customer.

On staffing…

[Eric] Don’t, for example, hire a VP of Sales unless you have a product and a few customers. That means you, the entrepreneur, have to wear all the hats.
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[Jeff] When the only time you have to talk strategy with your management team is at 3 am, that is probably a good time. But in reality, it all depends on the circumstances.

On partners:

[Eric] It’s good to have a partner. I didn’t the first time I started, and I probably won’t do that again. You need someone who is fundamentally different in perspective and skills.

Please join us for our first event of the season! Entitled “Finding Your First Customer,” our speaker event features two very successful entrepreneurs who have faced a critical challenge when launching a business:

The first customer is absolutely critical for a new business’ survival, especially for goods or services in the B2B market. But how do you sell something that has no track record in the market? Two Austin-area entrepreneurs — Eric Hills and Jeff Connally — share their stories of first customers, as well as their impact on profitability, marketability, and strategic direction of their respective startups.

Date: Wednesday, October 18
Time: 6:00 - 8:30 pm
Place: University of Texas Campus, UTC 4.132 (map)

Our distinguished speakers:

Eric Hills is a VP of Marketing at Zilliant, a startup in Austin that develops and sells pricing software for businesses. He has 16 years of experience in the startup space. In 1999, Eric founded Partnerware, a company that developed a web-based software platform to manage partner relationships.

Eric holds a BS from Clemson and an MBA from McCombs, where he won the international MOOT CORP competition.

http://www.zilliant.com/company_management.html#eric_hills

Jeff Connally is a teacher at the Acton School of Business. He has over twenty years of leadership expertise in sales, marketing, business development and a range of operational functions. He owns and runs a consulting practice, Gener8Biz, and was a founder in Uplink Corporation.

Jeff holds a dual B.A. from St. Michael’s College and an MBA from McCombs, and is a past president of the UT Executive MBA Alumni Association.

http://www.actonmba.org/people_teachers.php?13
http://www.gener8biz.com/Jeff.html

Initial Timeline:

• 6:00 - Networking (Food and Drinks)
• 6:30 - Kickoff by Ruben Miranda. Brief welcome and introduction
• 6:35 - Eric Hills speaks (10-15 minutes)
• 6:50 - Jeff Connally speaks (10-15 minutes)
• 7:05 - General Q&A (45 min – 1 hour)
• 8:00 - Informal discussion

Other details:

1. To help you find the correct room, there will be signage on the main floor of the UTC building, next to the escalators at the north end.
2. Parking. After 6 pm, you can park for free at the state lot, or on the street at any meter. Parking is $8 at the Bob Bullock Museum. A complete map can be found here.
3. Food will be hearty appetizers, drinks will be water and sodas.

Event is open to TEE members and McCombs faculty. We hope you can make it!

Hello all,

We are in the midst of interesting times! Last week saw the completion of the annual Austin Intensive Program, this year held at the Four Seasons Hotel. There we saw our membership ranks swell from 24 to just over 38 members!

For the next few days, this site will be light on actual content…we are in the process of updating the site to allow for more timely updates and notes on current events, not to mention information about the organization. So please stay tuned, even though everyone says that. Thanks!

I have finally secured a date for our next speaker. Hector (member of the Austin Young Execs club) will come talk to us on June 10th. Prior to this, I would appreciate if interested attendees could send me their undergrad, job title and desired job out of school. This doesn’t need to be very precise or detailed, but Hector is looking to get a feel for his crowd and perhaps tweak the orientation of his talk a little.

Also, here is the format he plans on following. This is more of a blueprint of course, and subject to change.

- Introductions
- Hector Torres Presentation

• Background (UT Austin; Computer Science, Northwestern; Kellogg School of Business)
• Working History
• TAMACC (Texas Associaiton of Mexican American Chambers of Commerce), Director of Technical Services
• ISI Consultants, President & CEO
• CSTMBC (http://www.cstmbc.org), Member Board of Directors
• Austin Young Execs; Member Board of Directors
• ISI Consultants now and future expansion

- Questions and Answers

I have found Hector to be a very likeable guy, interesting and full of experience yet low-key and humber. Looking forward to a great meeting….

The next TEE meeting will be on Tuesday, May 23rd at 6PM. The meeting will be held at McCombs, and I’ll let you know the room number asap.

We will have two speakers Bob Grim from Bigfoot Networks and Kirk Coburn from Pure Golf, Inc. - both are TEMBA alumni who have founded their own companies are are currently fighting the good fight. Below is some quick info on the speakers. I’ll bring some pizza and see you all Tuesday night. Please indicate your attendance using the Yahoo poll so that I can get a headcount.

Kuykendall (Kirk) B. Coburn is the founder, President and Chief Operating Officer of Pure Golf, Inc. Pure Golf is an independent programming company specializing in the creation, production, management and sales of original sports and entertainment content for mobile media. Pure Golf launched the first national golf radio channel on XM in 2005, the PGA TOUR Network (Channel 146). Mr. Coburn also brings management experience from the corporate world of Dell, Inc., the entertainment business of Gaylord Entertainment and the start-up consumer space. Mr. Coburn received his BBA in Finance and Accounting from The University of Texas and received an MBA from the University of Texas Evening MBA Program.

From Kirk:

I started Channel 146 on XM Satellite Radio, “The PGA TOUR Network”. We are one of the top rated channels on XM where there are over 12 million listeners and almost 7 million subscribers. I am the president and COO of the company. I hire all personnel including the talent (broadcasters, former and current PGA TOUR players, etc…), I manage the operations, I work with the board and the CEO on long-term vision planning, I raise money, I manage are partnerships with XM and the PGA TOUR and I do what no one else wants to do.

Bob Grim is currently VP of Marketing for Bigfoot Networks. Bigfoot Networks is creating a network interface card aimed at reducing lag for online gamers. They received 4 million in venture capital funding recently and are looking forward to releasing their first product this summer.

Mark your calendars!

Thanks to Ruben Miranda, we have an excellent speaker, Bijoy Goswami, for our March meeting. This meeting will be on Saturday, March 18th at McCombs. The room will be finalized later.

Full bio Bijoy here: http://www.aviri.com/bijoy.htm

Here are some quick facts about him: He is the founder of Bootstrap Austin, author of the book The Human Fabric, and CEO of his own company (http://www.aviri.com/).

This should be a very interesting experience.

Our next meeting will be this Sunday, January 8th at 11:00 am. The speaker will be Jay Manickam from uShip (uship.com).

In case you don’t know, uShip is a company that was founded by 3 FT MBAs 2 years ago. They were semi-finalists in the Global Moot Corp competition, and they won several other business plan competitions as well. uShip matches people that want to ship items cheaply with excess cargo space. For example, if you want to ship a couch to California, you can find someone on the uShip site that is going from Austin to California and has extra space in their truck. uShip takes 7.9% of the fee that the shipper pays.

This is a really interesting company. These 3 MBAs all gave up their fancy cushy jobs to give entrepreneurship a chance. They are living cheaply and trying to build this business. They recently got an undisclosed amount of funding from Benchmark Capital, and I am looking forward to learning about how they plan to use it.

The location of the meeting will be determined asap. Please indicate your attendance with the survey asap.

Thanks, Eric

The October TEE meeting will be either at 9am on either Saturday, October 8th or October 29th depending on the latest poll results. The speaker will be Patrick Johnson, a fellow TEMBA student in the 06 class. Patrick currently works for Chase bank and is well versed in going through the loan process of the Small Business Administration. He will be discussing the details of this process as well as answering questions about how to finance a business using debt rather than VC, which should be very informative.

Please cast your votes so that we can choose a date as soon as possible.

Hello Entrepreneurs.

This is just a quick note about the Texas Evening Entrepreneurs. We had two excellent events at the BIC and we plan to get a lot accomplished this year. The next meeting will be Saturday, Sept 17 at 9AM at McCombs room 3.104. Please be respectful of everyone in the group and arrive on time. The speaker will be John Durrett, a venture capitalist from Austin Ventures - see profile here:
http://www.austinventures.com/team/teammember.asp?id=73

Please mark your calendar for the August meeting. It will be on Saturday, August 6th at 9AM. The speaker will be Kevin Williams, our current instructor for Innovations in Marketing. More details to follow, but for now, here is Kevin’s bio:

Kevin Williams developed and teaches a graduate course at the McCombs School of Business, University of Texas at Austin entitled “The Creation of Value.” He also teaches Marketing Strategy at McCombs, and similar courses at the McCoy College of Business Administration, Texas State University, San Marcos.

Mr. Williams was a Venture Partner with ARCH Venture Partners from 1999 to 2005 where he was involved in seed and early-stage technology investing. Previously, Williams was the COO of Sandefer Capital Partners, a private equity fund. He took an active role in deal evaluation, due diligence, negotiation of terms, and the management of portfolio companies at both funds. Prior to that, Williams was founder and CEO of Zeoponics, Inc., a NASA biotechnology spin-off. Preceding his entrepreneurial and investment activities, Mr. Williams spent 14 years in various marketing and business development positions with Rockwell International and Texas Instruments.

Williams has an M.B.A in Technology Management and Entrepreneurship from the University of Texas at Austin and a B.B.A. in Information Systems and Accounting from the University of North Texas.