Bill Grossman undertook a pretty impressive challenge at LeWeb '11, to share 20 years of entrepreneurial experience in 20 minutes. He condensed this into 12 lessons which provide expert advice for any entrepreneur, but particularly those in the tech space. Bill is currently CEO (and founder) of Idealab,
1. Market Power rules
Find a rapidly growing market. Bill explained the importance of making life easier for yourself by focusing on where the market is going. You can build execution power, but market power is when a market takes off without you even doing anything about it. "It's like running a race with a draft at your back."
2. Master The Demo
Learn how to sell and how to pitch. Don't just leave it as an afterthought, and make sure you know your product inside out so you can sell it expertly. Bill paid particular attention to this throughout all of his products and services as it was up to him to essentially sell them. This is sometimes an afterthought for entrepreneurs, where you know your product inside out, but can easily forget how to convince others of the benefits of your product.
3.Pursue your passion
Bill eventually started computerizing his business ventures. He made CPA plus, a PC software that would allow you to become an accountant. It retailed $695 (actually a modest price at that time) and heard firsthand the effect it was having on its customers, some of whom found the product difficult to use. So he developed HAL - human access language to make their product more accessible.
Lotus then acquired the company for $10 million, where he then created the DOS based desktop search package Lotus Magellan. There were many ups and downs in the journey to the Lotus acquisition, which is why you need to work in something you are passionate about. This is the only way that you will overcome the huge challenges you will face. You have to love what you're doing to make it through.
4.Focus, focus, focus
Bill then left Lotus and then went onto his next venture. Driven by a worry that his young son wouldn't fall in love learning, he started Knowledge Adventure in 1991. The intent was to make kids love learning, and off the back of this, he developed a range of products to succeed in the marketplace. When they found they weren't hitting their numbers, they developed a new product - Weekend Warriors. The whole team demoed the product all weekend long in the stores, bribing their way in with a box of donuts. The result of this is that they made their Christmas numbers.
There was no freemium model back then and they found a problem with Weekend Warriors, in that it was focused on too large an age range. People couldn't decide whether this product was right for their children. So they diversified and offered Jump Start Kindergarten, offering a product that was just focused on one year (five year olds, or children who were in kindergarten). This developed into an entire series and it became an easier choice for parents. It demonstrated the importance of doing a few things well, focusing on doing something better.
5.Recognise your Strengths
Knowledge Lab was sold by Bill in 1996 for $90million. He then started Idealab - shared resources for company creation & experimentation. This environment made it possible to experiment with different products and companies. The result is that Idealab has launched over 100 companies, including 35 successful IPO's, and also 40 failures. This was through recognizing his own strengths - where he liked working on different things - and developing a structure in Idealab that could support this, essentially allowing him to be unfocused!
6. Don't Overbuild
One of the failures of Idealab was eToys. They weren't sure if toys would sell online, but developed a website to buy a range of toys and reached $50 million revenue by the company's third Christmas. It grew rapidly, building warehouses and enabling one day shipping and tripled to $160 million by their fourth Christmas. Then the dot com crash happened and they went out of business due to over capacity. It was an important lesson for Bill in not overbuilding, as there will always be uncertainties and developments in the market that you can't predict or account for.
7. Survive until the market is ready
z.com was another failure of Idealab. They developed an entertainment hub when there was only 10 per cent broadband penetration, in the country. They wanted to build out celebrity content. The company continued to cut staff because the market wasn't ready, mainly due to the lack of broadband penetration, which slowed down further with the dot com crash. The problem with the product is that they launched before the market was ready, rather than an innate problem with the product or site itself.
8. Test, Test, Test
CarsDirect was created in 1999. Bill wanted to buy a car online without ever having to go to a dealer. So he ran a 90 day test and invested a minimal amount of money to see if the idea was viable. After 80 days, the site went live and they sold four cars. They had to hurry and turn the site off, as they had to ensure they could deliver the product, proving the thesis. They built and scaled the company and it went public in 2007 and was later acquired. By thorough testing and minimal investment, Bill could help ensure the company was going to be a success.
9. Stick With It
Bill launched Goto.com in 1998. He asked his companies to track their ad spending to a cost per click basis. They then developed a search engine where they developed a cost per click model. This developed into Overture and by 2001 it was 80 per cent of Yahoo's revenue and they then acquired the business in 2003. There was intense resistance to the model at the start, including by Yahoo, but by sticking with it, they saw its way to success.
10. Find An Essential Partner
eSolar was another of Bill's companies that scaled quickly. With 100km by 100km in Africa, you could power all of Europe. The company however had huge capital expense and they had to ensure they would find the right partners for it to work.
11. Harness Your User's Passion
Bill started UberMedia as a result of frustration over losing track of a link of his within Twitter, due to irrelevant search results. They acquired a number of Twitter clients, with the aim of democratizing results. They then developed chime.in, which relied on the community and user's word of mouth to see its way to success.
12. All Truth Passes Through Three Stages
You have to be ready to face ridicule and follow this mantra with anything that you undertake. In everything he does, Bill follows the thesis that the truth passes through three essential stages: first it is ridiculed, second it is violently opposed and third, it is accepted as being self-evident.