Entrepreneur Myths (7 page)

Every startup needs women on their team like counselor Deanna Troi, a half-human, half-Betazoid character in
Star Trek
series. Captain Picard and the rest of the crew consulted Deanna to solve intergalactic problems, based on her intuition and feelings.

Women handle conflicts better

When you start a venture, you will face conflicts sooner or later. On the average, women are better at handling conflicts because they’re willing to discuss the problem versus trying to kick the other person’s ass. I exaggerate a little, but there is often a difference in how men and women handle conflicts.

Woman use swarm management vs. command-and-control

Being more collaborative, women manage differently. They’re less susceptible than men to using the command-and-control style of management. Women are more likely to use the swarm style of decision-making, which is more group-based and bottom up, than the top-down approach that’s been prevalent over the centuries. In the swarm management system, decisions are made non-linearly vs. the linear style of command-and-control. Obviously, there are strengths and weaknesses with either system.  The swarm style of management can scale more quickly and easily for startups.

The problem in entrepreneurland is that, for whatever reason, women receive less investment money than men. It’s not fair, and it’s changing.  But it’s not changing fast enough. I funded one female entrepreneur, Kristen Kennedy in the software business for about $500,000. She had gone to a number of VCs in Silicon Valley but did not receive any VC dollars until I decided to invest. If she ever starts another venture, I’d probably fund her again. She exemplified everything mentioned in this chapter.

Fund startups founded by women. Women make fantastic entrepreneurs.

Brain Candy: questions to consider and ponder

(Q1)
Do women make better entrepreneurs than men?

(Q2)
If you started a venture, do you have women on your team?

(Q3)
Why do you think women aren’t getting as much investment money as men?

Entrepreneur
Myth 10
| Married couples should not entrepreneur together

It’s one thing to have a spouse spat at home — it’s another to have it at work. Some entrepreneurs say starting a business with your spouse dooms you to failure at both the business and personal level. I don’t agree — most of the time. I don’t remember ever having a spouse fight at the office. But you have to be cognizant that, when starting a venture with your spouse or significant other, professional situations can carry over to personal.

Spousepreneuring can work

You can succeed in working with your spouse in a venture and keep your marriage. This also applies to serious relationships without the marriage certificate.

First, like any business partnership, you need to have an understanding of who’s in charge of different functions of the business. Decision making is critical. Are decisions made equally? Who makes the final call? Preferably, you’ll agree on major decisions mutually. But there will be situations where you agree to disagree. In those cases, one partner has to make the final call. However, I know one couple where the wife makes all the major business decisions in a startup without his input, and it doesn’t work for them. I’ve seen him roll his eyes when his position differs on a subject. And we know what happens when spouses roll their eyes in a marriage.

Couples talk about sharing all tasks equally in marriage, but it seldom happens. What really happens is that one spouse is better at mowing the lawn, cleaning bathrooms, cooking, disciplining the children or managing the bills. The same applies to business partners.

Here are some key areas to consider when spousepreneuring:

Agree on who’s in charge of different functions of a venture

There is no such thing as co-CEOs. One person has to make the final decision. Make sure you both understand who that person is in the partnership and the guidelines for making critical decisions. I do believe major decisions that affect the venture and your family’s financial outcome should be discussed and agreed upon together. You have to communicate with each other just like in marriage. I don’t mean to sound like a marriage counselor.

Agree on the company’s vision, goal and exit strategy

If one spouse wants to build a billion dollar empire, and the other is happy to build a lifestyle business (one that just supports your own lifestyle and has no returns for the investors), you will have conflict. You also need provisional scenarios should the two of you have a baby. How is the business handled before, during and after? What if you already have children? How are you going to deal with raising them while you’re building your venture? Starting a venture is like raising a child. There is no fucking difference. I have children. I know. Actually, building your venture is easier than raising a child, so learn to juggle family and business.

Each person needs to specialize in different functions of the business

In startups, one person is more active externally in talking to potential investors, customers, suppliers, etc. The other spouse is more involved in running and operating the business. Make sure that you and your spouse complement each other well. Figure out who runs sales and marketing and who runs finance, operations, development, etc. This is critical. One of you needs to be out on the street making things happen while the other manages the business.

Divide the roles and titles

My advice: make one person chairman and CEO, and the other president and chief operating officer. As you grow the business and add other management positions such as CFO, CMO, CTO, your positioning allows the rest of the management team to understand their roles in relation to both of you. And it helps prevent employees from playing you against each other.

Know when to turn off the work

This is hard to do. The venture can consume your relationship to where all you talk about is the venture and personal conversations are pushed aside. When you get home you need to detox. Leave work behind or at least stop talking about it for a few hours.

Decide on how to manage the company

You do this whether your partner is your spouse or not. It’s critical you agree on the kind of culture and style of management you are building. It’s important your spouse doesn’t manage in one style while you manage in another. 

I suggest you act like business partners at the office

Far too many times, couples act unprofessionally. They kiss, hug and show affection. I don’t know about you, but an entrepreneur grabbing their spouse’s ass during work is not normally conducive to setting up the right culture for the company. However, it’s certainly better than watching them throw chairs at each other.

When I was in a venture with my ex-wife, there were people who didn’t realize for months that we were married. We ran the venture like a business, and that’s the way it should be done.  If you’re planning to run a lifestyle business, you can smooch all fucking day long. If you’re building a high-tech venture with plans to go IPO, you need to develop the right culture from the beginning. I doubt smooching or having sex behind closed doors is part of it.

Decide how to deal with the hiccups of building a venture, or possible failure

This is critical. If the venture fails, make sure neither spouse blames the other. Understand that ventures sometimes fail or do not meet expectations. If you both have quit your jobs to pursue the entrepreneur dream together, then it’s critical to agree and understand what happens if the venture goes down or struggles. Does one of you quit the venture and get a job elsewhere to pay the bills? Do you both throw in the towel?

Don’t mix sex and business

If you’re pissed off because your spouse made a bad business decision, don’t punish them by withholding sex. Settle your differences, then have fun.  If you disagree on how the venture is managed, or one of you made a mistake, talk it through like business partners. Separate business from personal so you can remain “business partners with benefits.” I know this is easier said than done, but it is possible.

I funded a couple who seemed to work well together. After I got to know them I realized one of them was excellent and the other sucked in business. The horrible half of the team created multiple problems because they were insecure in their entrepreneurial ability and covered it up by acting as if they knew everything.

Keep your zipper zipped or you could risk everything

I know one couple who was engaged and raised more than $120 million for their startup. One of them was so excited about their success, they started sleeping around.  They broke off their engagement and the startup collapsed. I doubt the sex was worth $120 million bucks.

Spousepreneuring can work if you treat each other as business partners. You have to recognize each other’s talents just as you would any business partner. Treat each other in a professional manner during business hours — unless you want a mom and pop culture. There’s nothing wrong with building a mom and pop business as long as you don’t plan on going IPO.

Most importantly, give compliments to each other in business like you do and in bed. Please —just don’t be mushy in front of your employees or investors like me.

Brain Candy: questions to consider and ponder

(Q1)
What do you think about working with your spouse? Can you do it? Does it even make sense? If you have children, how do you handle the chores of parenting?

(Q2)
If you are a spousepreneur, how do you handle the key management points I made in this chapter?

(Q3)
How do you change gears from business to personal when you get home?

(Q4)
If you failed in business with your spouse, how did you handle the failure?

(Q5)
If you failed in business with your spouse, do you plan to start another venture together?

Entrepreneur
Myth 11
| Entrepreneurs have a balanced life

Balanced life? That’s a bullshit fantasy. If you’re thinking about being an entrepreneur, especially in a startup situation, there’s no balanced life.

My family and friends tell me I should have a more balanced life. I say, “Are you fucking kidding me?” Unlike people who are addicted to alcohol, drugs or watching TV, I’m an entrepreneurholic. I’m not curable. It is an entrepreneur myth that you can start a venture and leisurely take off after five o’clock every day to go home, cook dinner with your spouse, play soccer with the kids, go out to a movie, or watch “American Idol” while smooching with your loved one.