Startups and angels: Along the way to success

People are the whole game

Remarks to the Visionary Companies Conference, Billings, MT May 27, 2010

It’s a fact that all net job creation since the 1980s has come   with under 100 employees.  You are all the future of job growth, wealth creation and better communities.

In brief, my own story involves a software company called RTMS in Milwaukee.

It was bootstrapped.  We had a customer and a value proposition.  It was simple  - Reduce costs and improve consumer experience for the large retailers.  We were fortunate enough to have customers like Boston Store, Carson’s, Penney’s, Sears, GNC – and they loved our exceptional customer service and ability to deliver a better value to their customers – and more sales and customer satisfaction to them.  We had a hardworking team of great people to pull it off. 

The company grew to 250 employees in two states.  We paid millions in wages in two communities and saw hundreds of employees achieve their dreams of college for kids, second homes – whatever their dream was.  It was sold in 2000 and today is the customer service arm of Fidelity Financial in Florida. 

I’ve been fortunate enough to be teaching aspiring entrepreneurs at Marquette University ever since.  Today, we have an angel investor network, the Golden Angels, as well as an entrepreneurship center to spread the entrepreneurial word across campus.

I’d like to think that our programs are helping students live lives of meaning through the benefits of entrepreneurship.  To me that includes being independent in the sense of having the confidence, through experience, to stand on your own and make decisions to achieve your goals; to control resources beyond what you own; and to achieve at very high levels.

For me, right now, the challenge is what’s next? 

I enjoy golf, but not enough to aspire to the “He had a single digit handicap” epitaph.  I’d rather see how many people I can help to grow businesses that create challenging and worthwhile livelihoods – achieving their dreams.  In short my challenge is “how many jobs can I create?

So as we think about entrepreneurship, it probably helps to think about our goals.  When I was a kid, children wanted to be firemen or policeman or airplane pilots. 

When asked today a lot say “I want to be rich.”

That’s a sad comment.  Last time I checked, I didn’t think that greed was a virtue.

Living a life of meaning is. And to me that means competing – and winning – in business – with an eye toward the purpose that we strive for. 

The question before us today: What’s a visionary company? Here’s a list to consider.

Most of these, to an entrepreneur, seems ordinary.  But to large bureaucracies, it seems pretty extraordinary.

1.  Visionary companies solve real problems for people.

2.  They create wealth for themselves, their employees and their communities

3.  They bring hope to their workforce

4.  All of their employees see a dashboard of financial results every month – and understand them

5.  Everyone understands the companies’ belief system – and signs on to it.

6.  There are clear statements of “thou shalt not”  -- boundary systems that give everyone the freedom and responsibility to apply their full knowledge and ability to daily problems.

7.  They are outstanding executors of strategies for growth

8.  They have excellent interactive systems for coaching, mentoring, providing feedback, for everyone in the company

9.  They have a growth metric – one measurement of success – that focuses the attention of the entire enterprise. Ours was increasing business from current customers.

10. The entrepreneur knows that if clarity of purpose, accountability, and responsibility begin to fade in his organization, then politically gifted bureaucrats begin to rise to positions of power and spread like noxious weeds.  The best always have a weed whacker handy.

Let me ask another question --

Why does the world look to America for Entrepreneurship? 

What makes us unique enough that other countries come to us to figure out how to encourage the growth of new ventures, owned by the people who started them?

It’s capitalism, of course.  But not the capitalism of the big bailout or the failed bureaucracy.  It’s the people willing to take risks, on the basis of ideas that solve a real problem, to innovate – to do something better and faster.  It’s growing businesses that in turn create real jobs.

Why the US?  Because we uniquely seem to know how to start and grow companies.  Our entrepreneurs have an independence of mind and a stubborn unwillingness to accept things as they are.

This is the bigger issue and a lot of us take it for granted.  I have been lucky enough to have been involved in a small company in Europe – and let me tell you, it’s not the same.

We know how to not only grow our own opportunities but also how to get the best from the people that join us – to help others grow, and succeed, and achieve.  And this powerful combination creates significant wealth.

It’s interesting how often the people who join us are not the most experienced, sought after folks – because we can’t afford them, or they won’t join us.  Yet we outperform the companies that hire those same folks.

We inspire others.  After all, what is the American experience except the desire to make a real difference – to control our own destinies – what might really be called the entrepreneurial spirit?

People have come here for generations – wave after wave – because they often had no economic opportunity and they wanted a chance in America. 

 They came here for the promise of freedom – for the ability to catch the entrepreneurial wave - to have permission to fail as much as to succeed. 

Today, the best and the brightest still come here to start new enterprises.  And, as the world struggles with one economic crisis after another, the call for entrepreneurship – once faint and seldom heard elsewhere in the world – is beginning to emerge as a louder call.

The American experience and environment are difficult to replicate.  The rest of the world has a long way to go. 

In the EU, for instance, it’s virtually impossible to dismiss anyone – for non-performance or anything short of outright theft – caught on video tape by a government certified camera operator.

In Italy, if you bankrupt your business, you lose your driving privileges until you get a job and pay off all of the creditors.

In Greece, 10% of the populace works for the government at higher than average wages.   Risk taking is discouraged.

The big money model of business development is utterly predominant.  The large companies grow and provide stable, well-paid, secure lifetime employment.  The entrepreneurial venture is frowned upon as risky. So the big guy gets bigger, protected by a system of imposing costs and inefficiencies that makes true entrepreneurship pretty difficult.

It’s an environment that virtually legislates against individuals taking risks – for their own good.

Most real entrepreneurs don’t much like being told what’s for their own good.

It’s ironic that just as the rest of the world is coming to America looking for entrepreneurial knowhow, we are in danger of becoming a European style bureaucracy.

In the United States, average civilian federal wages per full-time employee were $79,197 in 2008, compared to private sector wages per full-time employee of $50,028, according to Bureau of Economic Analysis data.

 

Including benefits, total compensation per employee was $119,932 in the public sector compared with $59,909 in the private sector.

 

The premium for federal employees over private sector employees has increased since 1998 in wages from 36 percent to 58 percent and in total compensation from 70 percent to 100 percent.

We should all be concerned about where this is all going.

Entrepreneurs are independent of mind and stubbornly unwilling to subjugate themselves to an established order. 

Remember Victor Kiam, best known for his “I like it so much I bought the company” line?  In discussing his views of entrepreneurship, he said

“Entrepreneurs are risk-takers, willing to roll the dice with their money or their reputation on the line in support of an idea or enterprise.  They willingly assume responsibility for the success or failure of a venture and are answerable for all of its facets.”

Here in America, 95+% of all entrepreneurs never have had any external investment financing.  They’ve relied on their ability to generate sales from improved and innovative products and services and have bootstrapped their businesses to success.

None of this is new or recent.  Benjamin Franklin was an entrepreneur; so was Henry Ford.  Ford worked – for Thomas Edison’s Edison Illuminating Company – until he began Ford in 1903. 

“Make the best quality possible at the lowest price possible, and pay the highest wage possible,” he advised.

And

“A business absolutely devoted to customer service will only have one profit problem – it will be embarrassingly large.”

Real entrepreneurs focus on customers – they know how to sell. They know that customers are the only real game in town and with them comes success.  And customers will tell you what they need and want – if you listen.  

Would you go to the doctor and tell your symptoms to an intermediary who would go and talk to the doctor and come back and tell you what the solution is?  Why do this with customers? 

“I find out what the world needs, “ said Edison, “then I proceed to invent.”

Look at Greg Gianforte right here in Bozeman.  He founded RightNow Technologies in a spare bedroom in his home in 14 years ago - by bootstrapping.  He called lots of people in customer service functions in lots of companies to ask what they needed – he proposed it, and when he got it right, he invented it – wrote the code himself.

Today, Right Now is the largest commercial employer in Bozeman, where they’ve been responsible for $500MM in local economy wages.  Today they have over 400 employees in Bozeman.

This continues to have a huge impact on the local

In these economic times, and since 1980, all new job creation has come from startups, just like this one.  And just like all of ours.

It’s always all about the people. 

Every time I look at a business opportunity – several hundred a year – the people in the business are key to success. 

–     Not the idea;

–     Not the technology;

–     The people.

–     Because the successful entrepreneur provides leadership and the ability to attract other great people. 

–     And to lead them in a way that gives them the opportunity to contribute fully and completely and to realize their own dreams.

So why don’t entrepreneurs work for big companies?  What makes people want to do their own thing?

1.   The quality of leadership in any company is absolutely critical for the company to get maximum benefit from the contribution of every employee.  How much has been written about this?  Jim Collins, Good To Great is just one example.  It seems sad that entrepreneurial leadership in large corporations is so exceptional that a book has to be written about how leaders who lead achieve great results.

2.   Poor leaders use information as power, manipulate the very people who have offered them their most precious resource – their time and attention – and do it all to avoid the very qualities that make corporations worth working for – accountability and achievement in a higher purpose.

3.   It’s not an accident that every country singer on the planet is required to write a song called “Take this job and shove it” or some variation thereof before they’re allowed to buy their first Stetson.

4.   Some entrepreneurs left where they were because they felt underutilized, underappreciated, under-everything, and in the face of a great idea, decided that was their opportunity.  Many of you did.

And a lot of people admired you when you pulled it off. 

What is the point of all of this?

One of our biggest challenges in entrepreneurial ventures is growth.  Growing means

–     turning one-off activities and disparate tasks into a series of routines

–     that run well and lower the costs and increase the quality of outcomes

–     and begin the process of sustainable growth

And, if we have learned from the non-entrepreneurial climates we’ve been exposed to, we can work that experience to our advantage when we set out to do this.

Why? 

Because we can best achieve this with a group of motivated, dedicated people who believe in the company and its vision.

So to achieve sustainable growth, we ask ourselves:

·      Do we engage our teams to create processes that both bring out the best in people and build efficiency?

·      Does every employee see the company P&L every month?  Do we discuss the big challenges with them? 

·      Do we have a belief system that everyone supports?

·      Do we have a real dedication to training and education?

·      Do we give people responsibility?

There’s a great Harvard case called Altex Aviation.  In it to aspiring entrepreneurs bought an aviation operator at a small airport.  The company was command and control oriented, had what appeared to be weak employees, and was failing.  They paid $100,000 for it.

The new owners immediately – within weeks – made each little unit – gas sales, flight school, maintenance and so forth – an independent business.  They helped people learn how to manage their new responsibilities.  They really lost no one.  They became profitable, grew sales from $2MM to $30MM in eight years, and sold the business for $3MM. That’s a thirty times return in eight years.

Their employees, and the employees of great entrepreneurial companies say:

The best leader I ever had was a person who…

·      Listened to me

·      Helped me make a valuable and lasting contribution

·      Cared about my success

·      Let me do my job the way I thought it needed to be done

·      Let me make mistakes

·      Coached me and saw potential in me

·      Challenged me

·      Taught me

·      Gave me the confidence to hire people better than me.

So: Who’s the future of your business?

 How do you account for the talent you’ve been given the opportunity to work with?

 

Congratulations to Prodesse and Tom Shannon!

The October 7th announcement  of the sale of Wisconsin-based Prodesse for $60 Million is great news on many fronts.

For the Medical College of Wisconsin, who had a 1% stake, there's an immediate payoff.  And, assuming that the original science included a royalty, there may be an ongoing royalty stream as well.  (Could be 3-4% of sales per year.  At $15MM, that's $600,000 annually.) 

For those of us who cheer for entrepreneurs, it's great to see Tom Shannon succeed.  I love Kevin Conroy's comment that "Tom is the best CEO in molecular diagnostics, not because he knew the industry inside and out, but because he's a doer.  He put his head down and said 'I'm going to confront all these problems' without any capital."

It's always the people who lead ventures that make the difference.  There was an inflection point in Prodesse where it would've been possible to walk away and admit failure. Lots of people have done it, and Tom didn't. 

He developed a Plan B and made fundamental changes.  He persevered and realized that the journey is a marathon  and not a sprint.  He managed his capital intelligently.  And he came from outside the industry, brought leadership skills, and applied them.  It's the people like Tom who make the big difference.

It's interesting to note that Prodesse created a lot of wealth in Wisconsin and stands to create more - not only through employment.  If Tom helps more new ventures succeed, and Prodesse investors continue to spot great opportunities, the story repeats itself.

Congratulations to Tom, his investors, and his team.

Now Is The Time for Entrepreneurs

It’s inarguable that economic change coupled with technological innovation creates opportunity.  In the 10 years between 1902 and 1912, the country was in recession three times for a total of 60 months. 

During that same time, the Silicon Valley of the early 1900s was Detroit.  There were more than 1,800 automobile manufacturers in the U.S. between 1896 and 1930. 

Not many survived, but they all contributed to the collective learning that made the winners.  Today, as the lifecycle of that product is ending, new disruptive vehicles will emerge to take advantage of large markets that are dissatisfied and want something better.

This cycle – economic hardship that creates a period of innovation that results in opportunities for entrepreneurs – repeats itself again and again.

Most people predominantly see the chaos; some see the power in dissatisfaction and disruptive technology and begin to see new ways to take advantage of it. 

Those who will venture out to try and capture new opportunities will be distinguished by 7 behaviors.

1.    They will focus on opportunities that, if successful, will be big.  The size of the opportunity will give the venture a fighting chance to change the world.  I am looking at a game-changing treatment for osteoarthritis that, if successful, will make a positive difference to millions of older, active people.

2.    They will create disruptive solutions to real problems.  New products will be better and less expensive than their replacements.  Zipcar, founded in Boston, took years to get going.  But it has been a game changer in the way urban dwellers both save money and solve their transportation problems.

3.    They will have risk-transferring business models that reward both the customer and the venture.  I believe that focusing on hard questions is sometimes the solution to building real innovation.  For instance, how do I sell alternative energy products at no risk to the buyer? I’ve recently seen an idea for alternative energy systems that the venture installs at the customer location– and sells not the equipment but the electricity, at a lower cost than the utility.  The customer has no responsibility for maintenance or performance, but only for the cost of the electricity they use.

4.    They have a team with expertise and deep knowledge in the area in which they are focused.  The vast majority of the Inc. 500 are ventures founded by people who developed the idea from their own deep experience.  Entrepreneurs learn from every experience and getter better exponentially.   And build great teams. 

5.    They have proprietary intellectual property to make their venture go.  Or, they have no obvious gorilla who can sit on them.  I looked at a business three years ago to rent a wireless device to sports fans going to a game.  It allowed the fan to look at live stats and commentary during the game.  Just like you can do on the iPhone today.  The gorilla, of course, was Apple and its app distribution system.

6.    They are great salespeople.  Entrepreneurs have to be able to sell to customers themselves.  The closer you are to the customer, the more likely it is that the venture has deep, proprietary knowledge about where the pain really is, and how best to solve it.  Retail Target Marketing Systems, Inc. was founded by a couple of us who spent all of our first year with our customers.  It was the foundation that set the orientation of the company for fifteen years.

7.    They understand bootstrapping, risk and finance.   Sales revenue is a strong source of investment capital.  Understanding how to make do with less than you think you need – while accomplishing the right goals – makes good ideas stronger faster.   Greg Gianforte started RightNow Technologies (NASDAQ:RNOW) with a spec sheet, a telephone and the determination to make a difference.  Those early sales launched his company.

This market disruption is one of the best opportunities we’ve seen in our lifetime. 

I’m going to go look for a new venture idea!

Two Rules: No Ask, No Get .. and ... If Not Now, When?

I'm reminded this morning about these two simple "rules" and how important they can be to entrepreneurs.

Rule 1: No Ask, No Get.

We are all too reticent in this world of email and texting, to actually ask someone - for advice, time, help.  The worst is "no" (well, the real worst is "I'll get back to you") and sometimes the upside is enormous. 

I continue to be humbled by how many people are willing to help when asked.  Sometimes, the people we are asking are people we know and have a relationship with.  Even in those cases, the quantity and quality of help we get is usually great.

But the bigger surprise is that people we don't know are also often willing to help.  This seems especially to be true if we are making a serious commitment to taking action on the help we solicit and they offer.

One big example of this is boards of advisers, a real important concept for almost every entrepreneurial business.  I am constantly impressed by the high quality of members of advisory boards on opportunities I get to see.  The best advisers bring expertise that the entrepreneur can't get any other way.

I've been privileged to ask a lot of people to come to campus and talk to students, and it's a rare case when I get a "no."

In some ways this is analogous to bootstrapping, where the first principle really is "go ask the potential customer if they like what you want to do."  People will tell you.

Rule 2: If Not Now, When?

I am disappointed at how often I talk about doing something - and then promptly spend 3 minutes writing it on a list - instead of doing it now.   There are a lot of things that take longer than I have "now" but there are a lot that I can do pretty quickly.

This year, I am revisiting this idea every time I write something down.  It keeps a lot of things moving and creates fewer bottlenecks and delays. 

Think about doing the same.

Paying attention to the business model: Who's in charge here?

This, unfortunately, is not a new story.   Boomertowne.com has gone out of business according to this news item.  The founder, apparently, was just "the idea guy" and he hired an advertising agency to tell him what the marketing data forecast would/could be (!)

Of course, his plan for 118 million visitors that turned into less than a million isn't really surprising.  If he - or you - set out to build a business based on forecasts, you have to find ways to test before you roll the dice on the whole plan.  Those tests ought to reveal the likelihood of reaching the goal you planned.

On another topic, an idea guy who doesn't know the business is taking on a lot of risk.  No one can be responsible for delivering results that the entrepreneur doesn't understand. 

On the subject of the business model, a friendly critic with some real experience points out (in the article) that she was skeptical - in April - of the goal being realistic. 

This is a common problem.  If you back into a business model, and achieving the results you need requires hitting a herculean goal, it's probably a bad idea.  I'm constantly surprised how seldom some people who are otherwise great planners back into business models.  In other words, they construct their expense structure and then figure out how many customers/visitors they need to make it work.  And that's what they forecast.

It's a bit like 1)forecasting a winning lottery ticket, and 2) putting a downpayment on an airplane as a result.

This was also a model based on achieving traffic that would allow the company to pay visitors $3 a day, presumably based on ad revenue.  A major caveat with that is now that advertising on the web is so trackable, advertisers prune their non-performing ads/sites/adwords pretty quickly.  So all those visitors had better be buying and not just looking.

This is a hard way to learn to test before fully committing.  But that trick, of committing in stages and gradually reducing risk, is at the core of entrepreneurial ventures.  

When You're Right...

"You are neither right nor wrong because other people agree with you.  You're right because your facts are right and your reasoning is right.  That's the only thing that makes you right."

-- Benjamin Graham, Columbia University, "the father of security analysts," 1894-1976

I note that there's another new quiz show on CBS television - "The Power of Ten" with Drew Carey, espousing the "principle" that the majority can determine some fact by voting on it.  (If asked to vote on whether a bunny is a boy bunny or a girl bunny, will a vote of 100 to 0 make it so?)  Do you think that Sumner Redstone, CEO of CBS owner Viacom uses opinion polling among his executives to make factual decisions?  (Is cash flow good or bad?  85% of our managers say good, etc.)

I understand there's a writer's strike and that this is "merely" mindless entertainment, but there is a pernicious assumption being taught - that the opinion of others causes facts to be determined. 

Contrast that with Ben Graham's pithy comment.  Getting the facts right is the only way to be sure you are right.  But don't mistake Graham's statement for an endorsement of stubbornness or single-mindedness.  Those may be great entrepreneurial qualities, but only if we know what the facts really are when we apply these qualities on our ventures.

Especially when you - the entrepreneur - think about business modeling, you must have your facts right. 

Have you asked yourself if you know what you don't know?  (Do you have industry expertise, firsthand business management experience, access to experts?) 

Have you formed hypotheses about what will work, rather than assumptions?  Have you found ways to test those hypotheses for as little as possible s fast as possible?

Have you assembled comparables about your venture to give you the confidence of knowing that what you are proposing can be done?  (I have seen countless plans with substantial break-evens that suggest the highest rate of sales, response, etc. can and will be achieved before financing runs out!)

Do you know where the death traps are?  Have you done a rudimentary five forces analysis on the back of a napkin with someone who can be a critic?

Do you know what you can outsource and for how much and what impact that will have on your model in the survivability period?

Are you right about your facts?  Or are you comforted by having assumptions validated by opinions of others?

Marquette University's new program

The new initiative for cross campus entrepreneurship is underway at Marquette University in Milwaukee.  The idea is to bring the entrepreneurial experience to any student - regardless of discipline - that wants to explore venture ideas.  It's a concept spreading across American Universities.  The group here looked at a variety of US programs, including Syracuse and Washington University in St. Louis.  Both are exceptional.

Here's a link to the news story in the November 7 Milwaukee Journal Sentinel.

We all know that entrepreneurship is for everyone.  This cross disciplinary approach will help the process.  It's a big part of the idea to spread these principles of starting and growing ventures to sustainable social enterprises and to our local communities.

We Only Need 1% of The Total Market!

Do I hate to hear those words. 

Nothing gives an investor the heebie-jeebies faster than that phrase. 

It means that the entrepreneur hasn't done the hard work of figuring out a business model at a detailed level, nor allocated the total investment required to achieve their goals.

They have looked at a total market and backed into a financial projection that looks great at a small market share.  In almost every context, to an investor it sounds like an excuse for a lack of detailed planning, based on the fact that the proposed venture is a "can't miss" sure thing, so why bother to really work the plan?

Yet, they have a very difficult time finding an example of a company that has 1% of the market in a stable, successful business. 

Why is that?  Markets are inherently unstable.  If the proposed business does start to grow rapidly, it won't stop at 1%.  And, if it achieves 1% and does stop, it won't stay at 1%.  It will decline.  If the end goal is to sell the company, who will buy it at 1% and declining?

If they achieve some early success, often at high profit margins, they will draw bigger competitors.  If they have protectable IP, their growth should accelerate.  Yet their plan is for a fast growth to a modest market share - almost surely not a combination that will work. 

Their planning process has not done the hard work of validating their assumptions - because just a modest market share" achieves spectacular results, they think.

What should the entrepreneur do?

Start with an exhaustive list of assumptions.  (Often people work these backwards.  They start with, say, a needed conversion to sales rate from a click stream and work back to the quantities and conversions at each step to achieve profitable results.) 

Once you have those, ask how each one can be validated.  Check the experience of others for detailed data.  If you don't already know about it, check out the ECHO awards of the Direct Marketing Association.  Award portfolios can often be a source of comparable data on these kinds of results.  Here's the DMA bookstore link to the most recently published portfolio.

Then, devise small tests to begin to get at how close you come to your assumptions.  If it's click rates, or purchases per hour, or acquisition costs, give it a try.  Zipcar, the Boston-based local car sharing service, began in exactly that way. 

Invest just enough capital at each step to validate an assumption. 

Then build a projection based on actual testing. 

Include growth rates as part of this process.  The faster you can see repeatability from customers on the scale you estimated, the better.  You may find that while your initial cost/per is higher than planned, it is OK if your repetitiveness is more frequent than you had thought. 

This should allow you to construct a plan for growth that includes reinvestment rates over time and time to breakeven cashflow.   So, you wind up with a working business model and a projection based on tests that validates both the model and the growth rate. 

And, if the venture meets an untimely end, you haven't over-invested.  (If the assumptions prove to be best in the world by a factor of two based on your research of comparables, perhaps you've only invested time.)

Is Business Model Analysis Important To You?

Investors love entrepreneurs who understand their business model, and can describe it accurately.  And when they meet entrepreneurs that can't, it is often a sign that the management team needs strengthening - at a minimum.

In my mind, a "business model" reveals the structure of the profit engine that underlies the venture.  Most ventures, almost by definition, project high growth rates and substantial profits over some time frame.  In reality, the ability to estimate growth based on revenue for a new venture is low.  There are many, many variables that go into a new venture that make such predictions tenuous at best.

However, it should be relatively straightforward to build a business model that reveals how the business plans to make money.

How much will the product sell for?  (Is that price competitive in the marketplace using comparable data?  If it is a new service, what will it be displacing and therefore what should the price be, etc.) 

How much will the product cost to produce?  What other structural costs are inherent in the business?  Are they verifiable with sales, fixed, or some combination?

How much cash is needed to launch the venture and to achieve cash flow break-even?  When does the venture need the money?  (Can we invest in tranches and therefore reduce some risk as we gain knowledge?)

What are the critical elements in achieving success?  Can we test to find out if these estimates are achievable?  (Are we planning for the lowest customer acquisition cost the industry has ever seen?  And if so, what happens if we are wrong?  Are there ways to figure this out before we commit all of the resources?)

A well thought out business model can then be used to scale projections, again based on comparable experience.  However, total value of projections is vastly less important than a well planned model. 

Listen to Who?

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.