Elana Fine, managing director of the Dingman Center for Entrepreneurship at the University of Maryland’s Robert H. Smith School of Business, fielded questions online last week with guest David Potts, founder and chief executive of Baltimore e-commerce software company SalesWarp. Here are excerpts, edited for grammar and clarity.
Q:I am in the mid-stages of my career. I’ve been climbing the corporate ladder for a while with some success. Lately, I’ve been reading about how corporate entities want to hire those who think entrepreneurially. In fact, where I work, I’ve heard our top management talk about it. To be honest with you, I’m not really sure how to act on it or develop the thinking. Can you recommend some good reads or blogs?
Elana Fine: Eric Ries’ “The Lean Startup” talks about entrepreneurship within existing corporations, such as Intuit, and with start-up ventures that are more typically thought of as “entrepreneurial.” Similar skills apply in both cases — identifying a problem/solution, building a product on limited resources while testing hypotheses, establishing relationships with key partners and channels, etc.
Q: David, where did you find help to start your business?
David Potts: We started out in an incubator space, the Emerging Technology Center in Baltimore, where we found our first contacts in the industry and connected with the local tech scene. I highly recommend networking in an incubator space when you’re getting started to meet the right folks and also evolve your plans.
Our second big boost was the Dingman Center and their experienced angel group, which provided both mentoring and start-up assistance.
Q: I would like to start an online retail business for people hosting a party or entertaining (think products for cooking, decorations, home goods, servingware, etc.). What are the top three things I need to do to get started?
Elana Fine: The first thing I would do is determine the existing players and how your business will be better, faster or cheaper. There are a lot of existing online and bricks-and-mortar retailers in this space. Pinterest has also created a large community for exchanging ideas on entertaining. Second, I’d think about your target market (which goes hand in hand with your differentiation). Is it young people just getting started entertaining or empty nesters who haven’t thrown a party for years? Talk to these potential customers and figure out what they need. Next, think through your monetization (and there will be way more than three things to do), and start figuring out how you will acquire these customers and how much it will cost vs. how much you will spend to get site up and running.
Q: I have an early stage start-up and I’ve had the same mentor from the beginning. We used to see eye-to-eye on most aspects of my business model. Lately, we’ve not been on the same page on an entire range of decisions. I’m ready to move on, but the mentor isn’t. How can I properly break up?
Elana Fine: Well, as the song goes, “breaking up is hard to do.” Mentor relationships are hard because they are a hybrid of personal and professional. Most “professional-only” mentor relationships don’t work. However, in this case, you need to be very honest because you have a lot to lose. Give the positive feedback of how valuable this person has been to your company, acknowledge the milestones you have made together, and then suggest that you change the structure of the relationship before things go sour. That being said, make sure you are not just reacting to “the messenger” — we engage with mentors because they have expertise and sometimes that expertise might be hard to swallow.
Q: David. I’m not an entrepreneur, I haven’t thought of a big idea. However, I want to work at a start-up. I love being around at the beginning of things and the start-up culture resonates with what I’m looking for in my career. What do founders look for when they’re building their team?
David Potts: From my view, we need mini-entrepreneurs at all levels of the team. Every person has to be able to create value through their ideas and execute plans without excessive oversight.
Elana Fine: I’ll add to David’s response because we work with a lot of companies that are starting to grow their teams. Often the founding team of a very early stage company is looking to fill a gap in their skill sets. Many technical founders do not have sales or marketing expertise, so they look for complementary talent. Each hire a start-up makes is risky, so founders are looking for employees that add to their competitive advantage — whether it is industry expertise, connections or just passion and drive.
Q: Hi Elana, I’m sure you hear this often: my husband and his friends want to start a brewpub. He wants to quit his job in order to do this. I want to be supportive of his aspirations; however, we rely on both of our incomes to pay the mortgage, bills, child care, etc. Is it just me, or is this a bad idea? Is there a way I can be supportive of my husband although I feel like such a venture would negatively impact our ability to keep our house, etc.?
Elana Fine: Well, I think Capital Business reported this week about how welcoming D.C. has been to new craft breweries, so at least your husband has wind in his favor. Like any venture, your husband and his friend need to do their market research and understand the dynamics of the industry. You can’t overlook the financial impact — it might just mean you need to bring on a few more partners so you can all share in the risk. I’ve certainly heard worse ideas than a new brewpub — but get more data before making decisions that will impact your family.
David Potts: I know many friends that would love to have brewpub. Might be a guy thing? Elana’s advice is key in these industries, do it with friends to defer the risk. I’d add, preferably wealthy friends who like beer more than profits for three to seven years. It’s not a way to pay the mortgage near term and takes a lot of hustle to sell, even if the product is great. It’s important to figure out how you’ll cover expenses while any business starts out and its stressful for everyone involved. Like all start-ups, the rewards can be immense when he succeeds.
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