The Hot Iron

Friday, June 27, 2008

My Take-Aways From The Book The Venture Cafe

As the saying goes, it takes money to make money.  This is something I learned first-hand when I started my own business, Dunkirk Systems, LLC, several years ago.  In my case, I bootstrapped my business – used savings as well as revenues to grow and expand my business.  It has worked for me as it fits the size and scope of my business.  But bootstrapping isn’t for everyone, and not just people who don’t have money to invest in a business.  Some business ideas require a large amount of cash for research and manufacturing, and this is where venture capital can come into play.

Venture capital, or VC, is a large part of the story of the book The Venture Cafe by Teresa Esser.  It is a non-fiction piece about entrepreneurs and those with business or product ideas and how they go about taking those ideas forward.  The notion of a cafe stems from the author’s experience with a pub on the campus of MIT in Cambridge, MA where people with gather to talk thru various business and technology ideas.  The book follows the path from idea to established companies, and throughout are interviews with people at various stages themselves, including the author’s own personal stories.

My greatest takeaway from the book is you cannot do it alone.  Whether you need financial or human capital or merely cheerleaders on the sidelines, to grow and be a true business you need resources that will surely go beyond yourself.  This can be hard for some who are, using a term I commonly use, control-freak entrepreneurs.  It is not letting go, it is empowering others.  And things may not go exactly as you have planned, especially when using other people’s money.

An equally important takeaway is accountability, to everybody including the investors to employees to you.  Investors want to know how and why their money is being spent, and if they will make a profit or not.  This may mean making hard, unpopular decisions, but to pursue the goal and move forward, they have to be made.

A final takeaway is that you may fail.  Where another saying says failure is not an option, it can happen, and if it does, you need to react to it.  One example in the book is about an executive who loses everything, yet in his next opportunity he excels to an extreme.  Recovering from this failure, or bouncing back, shows the true mettle of a person.

I enjoyed The Venture Cafe, especially for someone who was living in the Boston area around the time it was written.  Many of the people and companies were ones I was familiar with.  Though it was published in 2002 and talks much of the dot-com bust of that period, many of the stories and lessons learned from it apply today.  And as much as the book is about VC, it does not profess it is the only way to go, and provides takes of those who chose VC and those who did not for their business.  I recommend this book for anyone who may want to reminisce about the past, and learn from it to empower the future.