Dave Gardner’s “Thank God It’s Monday” 20SEP10

“Thank God It’s Monday” is to help companies thrive!

This week’s focus: entrepreneurship

I attended DEMO Fall 2010 this past week, a show where aspiring entrepreneurs pay nearly $20,000 in registration fees to get a small booth and time on stage to present their innovation to analysts and firms looking for great ideas to invest in.

Chris O’Brien summed up my reaction to DEMO’s entrepreneurs in his San Jose Mercury News article titled, “What startups should focus on:”

“I am constantly impressed by the crazy amount of energy entrepreneurs spend hatching innovative services, so I have never understood why they seem to spend so little time figuring out their business models. Most end up banking on their ability to sell ads to pay the bills and make money.

Everyone convinces themselves that they will be the one startup to break out of the pack and make this work. But, this ignores the fact that no matter how much advertising shifts to the Web, there isn’t enough to support even a tiny fraction of these startups.”

One would have thought the dot com bust a decade ago would have etched Chris’s insight in every entrepreneur’s mind. If you believe that, you’d be wrong. I concur with his assessment. I asked many firms “how do you make money at this” and most responded “we’re still working on the details.”

Companies that thrive are enamored with their customers, not merely their innovation ideas. If it won’t work for customers, it won’t work for investors who provide the fuel ($) required to launch and sustain a company.

Thought for the week:

“If stupidity got us into this mess, then why can’t it get us out?” — Will Rogers

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Dave Gardner, Gardner & Associates Consulting http://www.gardnerandassoc.com

© 2010 Gardner & Associates Consulting  All Rights Reserved

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