My daughter and son are lobbying me for their annual pilgrimage to HersheyPark next weekend.  If you haven’t been there – think chocolate factory, on a heat sinking Dessert Shield tarmac, meeting countless upside down, inside out and water shooting devices of mass terror and destruction.  My idea of a party…… Just the thought of an upside down roller coaster makes my stomach flipflop.

Meanwhile, I am living the dream of VChood -- working with my portfolio companies, talking with new entrepreneurs, and living first hand the ups and downs of entrepreneurship.  It is absolutely amazing how quickly a start up company’s prospects can change.  Each day is different from the next.  I realize that it really is the grown up equivalent of an upside down super soaker vertical climbing rocket coaster.  So, if I hate roller coasters, why do I like working with start ups?

And, more to the point, why do entrepreneurs subject themselves to this?

A good friend of mine describes being an entrepreneur this way: “Being an entrepreneur is riding home in your car at the end of a day thinking that you can’t possibly be more screwed than you are at that moment, and then finding out in the morning that you were wrong.”  He says this with a smile, having been part of a number of successful start ups.  Another friend describes working with a start up as riding a roller coaster where you know the dips are coming you just don’t know whether the dip is a large one or a small one because the hill is too steep.  And she says this with a smile too.

So, what are these folks?  Masochists?  Certifiable lunatics?  Thrill seekers?  And, what does that make me, since I invest with these people……

Clearly what roller coasters and entrepreneurship have in common are the thrills (or terror) that they can create.  But, I don’t think that means that entrepreneurs are thrill seekers, looking for a quick burst of sensation and the resulting endorphin rush.  Rather, I suspect that it’s something more subtle.  I think it is the longer term sense of accomplishment that comes from quelling a fear, or mastering a situation.  In other words, it’s not the roller coaster that’s exciting it’s the riding that matters.

I’m reminded of the face on my daughter when she rode an upside down coaster for the first time.  Her face at the top of the loop was frozen in what looked to me like primal fear.  Yet, as she bounded off the coaster her first words were “that was fun, I want to do it again.”  There was a palpable air of accomplishment about her.

And, this is where I see the overlap.  Entrepreneurs have in common a number of traits.  One of the most prevalent (if not the most prevalent) is that entrepreneurs are “doers”.  They live to make things happen, to shake up the world around them; in other words, to conquer situations and master them. That’s why when they talk about the ups and downs of being an entrepreneur they don’t complain (mostly), instead they smile, shake their heads and look forward. 

There is another point to make, however.  The best entrepreneurs are able to moderate their desire for accomplishment and mastery.  Sometimes the best path forward is not to change things, but to sit tight. And, sometimes taking a risk just isn’t worth it.  The same way that you would not want to spend the day at an amusement park with someone that wanted to continually ride the roller coaster, you don’t want to invest with someone that is always looking to shake things up.

The intangible balance between facing and mastering change, creating change for its own sake, is probably one of the largest personality criteria VCs apply to evaluating entrepreneurs.  My best advice is that if you are a person that wants to be in constant motion, and always mastering changes, you should have as a business partner someone who values continuity.  And, if you value continuity above all others – well you probably should consider carefully starting a company.  But, if you do, find someone who will balance your desire for the status quo.

For my part, although I will try to convince my daughter that I get sufficient thrills from being a VC, I suspect that some time over the next week I will find myself upside down hanging from a roller coaster seat.  But, only in moderation…..

With the Fall marathon season approaching – and being in month 18 of my latest start-up – I am going to spend a few minutes drawing analogies between running a marathon and being a successful entrepreneur. Most people who know me well know that in addition to recently starting my third business, I am running my fifth Marine Corps Marathon this Fall. So as a part of my training, I decided recently to talk to some of my colleagues and friends who have started and ran successful businesses to discuss what they feel is critical preparation for the “entrepreneurial marathon”. Below, I distill the results of these discussions.

Have your reasons: Everybody has their own reasons for running a marathon. Some people run to lose weight and get into shape while others may run to raise money for a charitable cause. Regardless of the reason, to successfully run a marathon, you had better have a good reason for wanting to run a marathon, because if you don’t, getting up at 6 AM every Saturday to run your weekly long run will be impossible. After a long week, it is perfectly natural to want to sleep in, but to successfully complete a marathon, you have to complete your training program, which requires getting up every morning and putting one foot in front of the other – just rather quickly.

The same goes for being a SUCCESSFUL entrepreneur – you have to have your own reasons. Because much of what you will do, similar to waking on Saturdays at 6 AM throughout the summer, will seem very, very unnatural. And if you don’t have some very good reasons for putting yourself through it, it is unlikely that you will make it. Furthermore, from my observations and talking with fellow entrepreneurs, money can’t be the sole driver. The best reasons that I have heard include:

• Empathy for the clients and passion for the business problem you are trying to solve
• Drive to build the careers and skills of the employees that you and the company has chosen to hire
• Focus on the bottom line goal of driving revenue

Plan, plan, plan: It is an overused cliché, but I’ll say it again— nobody plans to fail, they just fail to plan. In running a marathon, you need a training plan. It usually includes daily short runs and one weekend long run. The long runs get progressively longer, up through a few weeks before the marathon. Training to complete something as unnatural as a 26.2 mile run requires significant planning, training, and preparation. Without this training, it is very unlikely that a runner will complete the marathon at all, let alone with a good time.

The same is obviously true for being a entrepreneur and starting a successful business. Just like marathoning, there are plenty of people who set out to complete the race, but very few that end up creating a successful business. In creating a business plan, all entrepreneurs seem to have their own secret at creating a business plan that aids in leading to success. As I mentioned in an earlier blog, Commercializing Web 2.0 Technology, there are multiple dimensions that are typically present in a thorough business plan. These include:

· Product (or service) development

· Marketing and sales

· Business and infrastructure

· Consolidated financial projections

Personally, I am of the point of view that the first three elements should be tightly coupled to the consolidated financial projections. The advantage of keeping the entire business plan on a consolidated spreadsheet is that as product development or marketing and sales projections change, the business plan morphs into a consolidated operating budget

In a future blog, I’ll go into more detail regarding my preference on specific details of an operating plan spreadsheet.

Choose the right training partner. Having a supportive training partner, with the same training goals is quite possibly the single most important element of training for a marathon. If you partner’s performance goals are different from your own, then the training process will be quite frustrating. One of you will be waiting for the other and the other will be always fighting to catch up.

In addition, you need to be supportive in helping to motivate each other. No one in their right mind wants to wake up early on a Sunday morning and run 10 miles in the August heat. It really helps when you have a training partner that you enjoy spending time with and you know will help motivate you when your energy level gets low.

Similarly in starting a business, you and your business partner need to be compatible in terms of:

• Complimentary Skills: Fortifying each other’s weaknesses – without creating an atmosphere of animosity.
• Motivation: Starting a successful business is a long difficult process full of setbacks. It is imperative that partners be supportive and are able to mutually motivate each other during the inevitable setbacks.
• Respect: The ability to generate and cultivate new ideas is critical and having mutual respect during this process is imperative. One of the best reasons for a business partner is to help push the envelope on good ideas and make them better. And having respect for each other’s abilities makes this process all the more effective.

Run YOUR race. Finally, in running a marathon, you need to run your own race. At the start of most races, the crowd tends to begin the race at a fast pace then slow down as the crowd thins out. If you get caught up in the crowd in starting a race and run at a pace faster than you trained, you will not have the energy to finish the race. Your race is the one you planned for and trained for.

The same is true in starting a business. It is easy to get caught up in the business fad of the moment and dramatically change your business plan into an unrelated tangent. But the fact of the matter is that you, your partner, and investors planned for a specific business model and for good reason thought that was a good plan at the time. Dramatically changing plans midstream should be undertaken with great caution.

On the other hand, this is not to say that a mid-course correction may not be just what your business needs. The most successful entrepreneurs are those that can think quickly on their feet. But caution should be taken in doing so. This includes:

• Evaluate the impact on all dimensions of your business plan
• Be in full agreement with your business partner
• Recommit yourself to the new direction and continue to execute

I hope this analogy is helpful and I encourage comments and suggestions in continuing to play out the analogy between marathoning and entrepreneurship.