Very Short Interview, Part 2

After reviewing my first interview with Ellery Chan, co-founder of Precision Lightworks (linked here), my impressions were that perseverance and adaptability are two key traits to have. When they were first starting their business they had a good product, but the misjudged who would want it and what they'd pay for it. Lightworks had to rework their entire model to better suit potential customers and has been successful since. It's very important to keep going, even when you hit a wall, because otherwise you'll never reach your goals. 

Interview

1. Have you every felt discouraged with your venture? And how did you deal with it?

Sure, there were many times when I felt discouraged.  The first was soon after we had started, we were writing our software, but had no income for quite a while, and then only had a little income until our sales got going.  I also sometimes feel discouraged that we are not using our talents optimally:  since we do not have a large staff, I end up with many mundane responsibilities that are not what I would consider my most valuable skill set, which would be innovation and new technology development.

I mostly deal with it by persevering.  The long term goal is to grow out of this phase, be able to hire more staff, and delegate some of the responsibilities that keep me from being more effective.

2. What resources did you use to start the business? 

The two original founders (me and my partner, Mark) self-funded the business.  We are probably unusual in this regard when compared with most other startups.  We took a very conservative approach.  We did not want to seek outside funding for a few reasons:  1) we did not want to make the effort to put together a pitch and then make the rounds presenting to venture capitalists; 2) we did not want to give up control of the company; 3) we did not want to have any debt.  We did not follow the explosive growth/fail fast strategy that seems to be popular.  As a result, we are not a billion dollar phenomenon, but we are still in business and profitable, with no debt.

3. What are some difficulties you would recommend entrepreneurs watch out for?

Go into business with people you trust, and who are ethical.  You don't want to put your livelihood into the hands of someone who might put it at risk.  There is already enough risk that is out of your control.  You don't need more.

Know your customers, what they want, and what they are willing to pay for it.  It is difficult to really understand your market well without a big sales force.  Market studies can be performed, but they can be expensive, and you will have to use your own judgement to decide whether the statistics that they provide are a) correct and accurate, and b) applicable to your business.  If what you are developing is a paradigm-shifting product or technology, the market studies could easily be misleading since they would probably miss the shift.

Get good legal advice.  Lawyers are expensive though, so you should learn how to read contracts so that you can at least recognize things that are risky or disadvantageous to your company.  And remember that you don't have to take a contract verbatim.  If there are clauses in it that make you uncomfortable, ask for them to be removed or modified.

Reflection

I felt better talking about entrepreneurship this time around for two reasons. The first is that, because of this class I know a lot about what questions I would need to ask myself before/and while pursing an entrepreneurial venture. More impact-fully though, I started a club this semester, and am going through a lot of the emotional struggle that would happen with starting a business, though to a much lesser degree. 

I don't think that Mr. Chan conveyed a sense that he thought I had progressed in my entrepreneurial journey. Without working with him more closely I don't think he could accurately make a judgment on that.