Capabilities required to be an entrepreneur

One of my classmates, Shobhit Chugh, has published an insightful post on the capabilities required to be an entrepreneur, as described by Clayton Christensen. In brief, they are:

• Operated in environments with high degrees of uncertainty.
• Developed plans to unearth seemingly unattainable knowledge
• Experimented and found unanticipated customers for a product or service.
• Placed bets based on theory and intuition, not necessarily detailed data.
• Resourcefully solved problems without spending much money.
• Built a management team from scratch - a team with skills matched to the task.
• Shown experience in fending off certain corporate processes and in harnessing or manipulating others, in order to get the right things done quickly.

Shobhit's post discusses whether consulting is useful preparation for going into startup.

US Administrative Headaches

I'm so caught up in Bureaucracy, I've actually met some of these people.

As I write this, I'm on the Purple line train on Chicago's metro system - the "El". I'm headed back to Evanston from the Internal Revenue Office in downtown Chicago. Getting a bank account set up for my business is proving to be a headache. With the school Winter quarter kicking off next week, I'm feeling a little pressure to get administrative issues resolved before my endless list of things to do gets even longer.

It all started simple enough -- I just want to open a bank account so that I will be able to cash in money from customers. I got a few recommendations for banks. The mainstream consumer facing banks, such as Citibank and Chase, charge monthly fees. For a business with little revenue, I found this a ridiculous proposition. The Levy Center kindly pointed me to a few banks that offered better terms -- TJMcCue First Bank & Trust, Harris, and Charter One. Of these, Harris was the most interesting, in terms of keeping my fees at zero. To open an account, I found I need an Illinois Tax number for the business. So how do I get this number?

The Illinois Tax number need to be applied for from the state revenue department. However, to get this number, I need another number -- the Employer Identification Number (EIN). The EIN is the federal level number that identifies your business for tax, employment and other business purposes. While I pondered why the state needs a different tax number to the federal government, I began looking around for how I might get a EIN number.

Fortunately, the EIN number can be applied for online. Unfortunately, the online form is only available during office hours(!)... you can imagine how crazy this must make a person wanting to apply for such a thing at 11pm at night. So I waited until the morning and started filling out the online form. As I filled in the boxes and moved from one screen to the next, I eventually got to needing a number that seems to be the root of all things US -- the social security number. Because I was not employed over the Summer, and was instead working on the business, I didn't get a social security number. It appears I need a Individual Taxpayer Identification Number (ITIN) in its stead.

The application for the ITIN is via postal forms. Following phone calls to automated voice recordings and angst that it could take weeks to get this numbers, I'm headed to the Inland Revenue Office to see if they can give me a helping hand. I don't have anything to file for a tax return, which is when an ITIN number is typically filed for. To reduce the risk that I didn't have all the document I needed my visit to the Inland Revenue Office, I decided to empty out my desk tray of important documents into my rucksack.

At the Inland Revenue Office I was greeted by a sign that something to the effect of, "Due to weather, traffic and staffing issues, we are only accepting tax payments. Please come back at another time for everything else". A receptionist imparted some advice, "You think you can just walk in here and get an ITIN number? It's a long detailed process that will take 12 weeks. It requires a lot of homework". I almost cried.

Connecting with strangers

Making the connection with strangers can be hard.

So there I was, writing an email to a stranger - to reach out to them. This seems to be an activity that I do often these days. Maybe this is a common entrepreneurial behavior? It's not a pleasant activity, because such emails do not always land a response.

I use GMail for pretty much all my email. My school email forwards to my GMail account as well. I like the idea of having my entire archive of email available even after I've left school. GMail has some neat features too, such as auto-completing the sender address, based on addresses it has in your address book.

I always compose my emails by first writing the body of the text. After some bad experiences accidentally sending half written emails to people, I make sure not to include the sender until the end. Reaching out to this stranger, I craft the message to the right sensitivities.

Ten minutes later, the email is composed and ready for sending. I start writing the email address of the person I want to reach out to, but before I can finish - it auto-completes. I think to myself, "if it auto-completes, this person's email address is already in my address book. If it is already in my address book, it means I already know this person. How do I already know this person?"

A quick search reveals an email conversation from several months earlier. Several thoughts rush through my mind. First, I need to re-write this email so I don't come across as a random, but instead someone familiar. Second, this experience - this story - is not the first time that this has happened. Why is this? Third, the obvious occurs to me - we are now more connected many more people than we have ever been before. Maybe the stranger we're seeking is more closely connected to us than we think.

GEW50

PreScouter competed in the GEW Startup Open and was acknowledged as part of the GEW50.

Global Entrepreneurship Week (GEW), November 15-21, came and went. Did you notice? The startup that I'm working on, PreScouter, was recognized as part of the week's GEW50.

Global Entrepreneurship Week, founded by the Kauffman Foundation and Enterprise UK, facilitates a week of organization of local, national and global activities designed to help young people explore their potential as self-starters and innovators. One of these activities was the Startup Open -- which recognizes startups attaining significant "launch" milestones during Global Entrepreneurship Week.

In the case of PreScouter, by the end of Global Entrepreneurship Week on 21st November, the week before Thanksgiving, we had completed our campaign to interview (and put the product in-front of) as many interested parties as possible. Our placing in the GEW50 is a nice recognition of the strides the business has made.

The power of the team

Teams can be more effective than an individual.

Over the Summer, I spent an inordinate amount of time cold-emailing and calling people -- typically alumni of the McCormick Engineering School at Northwestern and others. I wanted to reach out to potential clients of the service I was developing, to understand their problems and get feedback on some product ideas. It was a bad experience. I was sure this Fall quarter's efforts would be similarly bad. I was wrong.

On one particular day over the Summer, I recall having scheduled 30 calls - each roughly separately into 30 minute slots during the day. It was a long and exhausting day, calling one person after the next. Half the of the time, I would not even get through to the person. At other times they were a little cold and unwelcoming. I had designed this process myself - emailing people and then suggesting when I would call them, and calling them -- irrespective of whether they had responded to the email or not. This method had worked when I was looking for an internship at a VC firm, before I started business school. In this case, it was was a complete disaster. In fact, it was not until the last call -- at 9:15pm of that day -- that I got even a vaguely positive response. The alum was curious about what we were doing and we were able to quickly arrange a meeting. After so bad outcomes in the earlier calls, that last call was a nirvana moment. Nevertheless, the whole process left me discomforted about the sales and outreach effort need to get the service I was developing to market.

As I previously mentioned, this academic quarter I used my MKTG450 Research Methods in Marketing class to effectively do the same thing. This time I had a proof-of-concept in hand, but essentially still needed to reach out to alumni - this time of Kellogg - to gauge their interest in it. The results can not have been any more different to my experience over the Summer.

With five brains working on this project, we designed a different process. This time, it was more of a funnel -- an initial email to invite interest, a second email to arrange a phone call and then the phone call to discuss the proof-of-concept. In hindsight, this was clearly a far more sensible process that what I was doing over the Summer. On the calls themselves, there would be at least two of us on each call. As we interviewed each person, we could each jump in with different thoughts and angles. On some of the calls, we even dared to ask if they would be willing to trial the service, paying a small amount of money to do so.

So it was on the first call, of the 34 that we ultimately completed, that three of us were sat listening to what seemed like overwhelmingly negative feedback. Nevertheless, towards the end of the call, one of my peers pushed to ask if the interviewee would trail the service. It seemed crazy to me, "have you heard what this guy has been saying?" I did so any, and the response came -- "Absolutely, I'll try it". I was astonished. From the experience of struggling to even get people to talk to me, here was someone willing to try it. Ultimately, some 10 of the 34 that we interviewed expressed interest in trying the service.

Working as a team of five did not mean that the amount of work done increased five-fold. Yet, the productivity and effectiveness has been orders of magnitude more than working as an individual.