Innovation is a tough go. There are so many steps between an idea and something that will really work and fill a market need that a lot of rational people would never try it. That's what makes entrepreneurs different, at least in part.
Yet the part after that is even harder. Often the entrepreneur is now in uncharted waters - for them. They know a market and a product - but as they enter the world of growth for their new startup, the cacophony of competing voices is overwhelming.
As one - perhaps small - example, think about corporate form. There are good strategic reasons for an entrepreneur to decide to be an LLC, an S, or a C corporation - or maybe none of the above.
But whose advice you take in making this decision is fraught with future consequences. Your long range view of your plans for the business, for example, substantially affect what the "right" choice might be. Planning on keeping this enterprise forever? Generating a lot of cash flow? Maybe an LLC is wise. Plan to sell to a larger, perhaps public, company? Be breakeven along the way? Maybe a C is wiser.
Why?
Right. Making sure you know the answer to "why" can make all the difference to you later.
Get the answer wrong and you can put yourself in a real box.
This is a real problem. I work with lots of entrepreneurs. Over the past few years I have seen so many of them who have received (and followed) "less than good" advice from service providers - some to their serious detriment...
A good antidote to this is to have a cadre of advisors serving on your Board of Directors, or at teh very least your Business and Scientific Advisory Boards. Ideas and viewpoints can then be vetted against one another making it less likely that one will make a potentially fatal decision.
Posted by: Cheryl Vickroy | January 28, 2007 at 10:19 PM