Bill Spencer, president of the Hawaii Venture Capital Association, compared entrepreneurship in the 21st century to "an extreme sport without risk of bodily harm."
Speaking to BYU-Hawaiibusiness students in the McKay Auditorium in the March 21, 2006, entrepreneurship lecture series, Spencer explained that "high-powered high-paid venture capitalists generally fund about eight out of every 1,000 proposals they look at, with the expectations that only two will be successful,and only one [of those] will be a home run."
"What I would liketo concentrate on today is risk mitigation — risk avoidance," hesaid, or continuing the sports comparison with the familiar surfing marketing phrase, "no fear."
Spencer — a serial entrepreneur in server farm management, distributed communications, groupware computing and medical treatment management, and a founding manager of the HawaiiEcotourism Association — said starting your own business "is a great challenge, but a tremendous amount of fun."
"What really separates the good idea from a home run is essentially a series of steps you have to take; or in other words, "what not to be afraid of to starta successful business," he added, listing the following steps.
1) "Don't be afraid to talk about your idea. The challenge is getting from idea to execution…andmaking it into a viable business."
"One thing that will plague you is whether you should tell somebody else about it. If you really are an entrepreneur, you won't be afraid to tell someone. Only you can execute it," Spencer said. "Real investors don't sign non-disclosure agreements. You have to think, the more you talk about this idea the better you're going to get at articulating it; and number two, you're going to get feedback. Feedback is good, even if it's negative."
2) "Don't be afraid towrite a business plan," he continued, calling this "an essential tool to articulating your idea."
"The real purpose for writing a business plan is not for raising money or getting investors— although you will be required to do that — but it's a way for you to think about building your business from beginning to end."
3) "Don't be afraid of competition," Spencer said. "Competitors serve a great purpose. Number one, they validate your idea, and at some point, you'll want to find comparable businesses that will help you come up with a value for your business."
4) "Don't be afraid to use professionals. There are a whole host of professionals who help entrepreneurs execute their plans. Acknowledge that at some point you can't do everything yourself."
5) "Don't be afraid to go bankrupt. Has anyone ever told you that before? It is a risk, and it's something that you don't take lightly; but the reality is you have to void that fear of bankruptcy in order to proceed unencumbered with your business idea. You can't let it get in the way of your success."
"The worst case is you get to start over again," he added. "If you truly believe in yourself and your idea, it's worth the risk; but be smart about it."
6) "Don't be afraid to give up control. At some point you realize you can't do this alone. Help means bringing on partners, shareholders, key people who will help you succeed; but that's always against the backdrop of giving up control. Control is a lot more than just owning 51% of your business."
"You need to share the potential with other people who are willing to help you, but that means giving up some of your ownership. Many successful entrepreneurs end up owning less than 10% of their companies."
7) "Don't be afraid to patent or trademark your idea," Spencer said. "Why would an investor invest in a business idea where the key component hasn't been protected? They won't."
8) "Don't be afraid to share the risk," he said. "Investors invest in people. They don't necessarily invest in business ideas, but you've got to choose your partners carefully."
9) "Don't be afraid to network. Don't isolate yourself from the broader community that you're operating in for fear someone will steal your idea." He added going to business meetings is "a good way to meet prospective team members with the skills that you need."
10) "Don't be afraid to ask for the order," Spencer continued, agreeing "it can be pretty scary to take orders because you're not ready. It's much easier to fill orders than it is to get orders. Sales are tough; but your first customers are going to be your best references. Your best source of leads for new business is satisfied customers."
11) "Don't be afraid of rejection. A lot of us don't like rejection, even when you're talking about your business idea. Let that roll off your back and move on to your next prospect. If you do get a rejection, ask why. Turn it into a learning process."
12) "Don't be afraid to shoot for the moon. What I'm really talking about is think big.No one ever got rich thinking small."
13) "Don't be afraid to fail. If you're inclined to take the entrepreneurial plunge, you can't be afraid of failure. It can happen, but each time you become stronger," Spencer said.
"The only thing to be afraid of is doing nothing at all, if you're really an entrepreneur."