The Wall Street Journal takes an interesting look at serial entrepreneurs in The Secrets of Serial Success. Check it out.

Paul Graham's latest essay is fantastic as usual and covers how to keep your startup from dying. The following section hit home because it describes the exact mistake a friend and I made when we were graduating from college. We told ourselves we were taking jobs with big companies, but we were going to keep working on our startup in the evenings. The fact that I'm not CEO of anything right now should give you a clue how that startup turned out.

Let me mention some things not to do. The number one thing not to do is other things. If you find yourself saying a sentence that ends with "but we're going to keep working on the startup," you are in big trouble. Bob's going to grad school, but we're going to keep working on the startup. We're moving back to Minnesota, but we're going to keep working on the startup. We're taking on some consulting projects, but we're going to keep working on the startup. You may as well just translate these to "we're giving up on the startup, but we're not willing to admit that to ourselves," because that's what it means most of the time. A startup is so hard that working on it can't be preceded by "but."

In particular, don't go to graduate school, and don't start other projects. Distraction is fatal to startups. Going to (or back to) school is a huge predictor of death because in addition to the distraction it gives you something to say you're doing. If you're only doing a startup, then if the startup fails, you fail. If you're in grad school and your startup fails, you can say later "Oh yeah, we had this startup on the side when I was in grad school, but it didn't go anywhere."

You can't use euphemisms like "didn't go anywhere" for something that's your only occupation. People won't let you.

One of the most interesting things we've discovered from working on Y Combinator is that founders are more motivated by the fear of looking bad than by the hope of getting millions of dollars. So if you want to get millions of dollars, put yourself in a position where failure will be public and humiliating.

Marc Andreesson just posted some great research he found about the role of a person's age in their career performance. Here's his summary of the data:

• Generally, productivity -- output -- rises rapidly from the start of a career to a peak and then declines gradually until retirement.
• This peak in productivity varies by field, from the late 20s to the early 50s, for reasons that are field-specific.
• Precocity, longevity, and output rate are linked. "Those who are precocious also tend to display longevity, and both precocity and longevity are positively associated with high output rates per age unit." High producers produce highly, systematically, over time.
• The odds of a hit versus a miss do not increase over time. The periods of one's career with the most hits will also have the most misses. So maximizing quantity -- taking more swings at the bat -- is much higher payoff than trying to improve one's batting average.
• Intelligence, at least as measured by metrics such as IQ, is largely irrelevant.

The second to last point is particularly relevant to entrepreneurs. You have to try if you want to succeed and if you want to succeed more, try more.

Guy Kawasaki recently moderated a panel discussion with several entrepreneurs. The MP3 is about an hour and a half long, but it's packed with great content.

The best part of the discussion is from Markus Frind who started PlentyOfFish (a free dating site). I think he said he gets something like a billion page views a month yet he only has a single web server and no employees. What hip web technology did he use to accomplish this feat? Ruby on Rails? PHP? Nope, good ol' ASP.NET.

A recent question sent to Ask the VC asks about whether VCs will fund three people starting a company that directly competes with their current employer and pays the three co-founders in the 150-170K range (because "they have families to support and mortgages to pay"). Are they crazy? Who wouldn't want to invest in some unethical spendthrifts?

The Engineering Entrepreneurs Program was the highlight of my education at NC State. Fortunately, they also sponsor an excellent Entrepreneur's Lecture Series which I've been able to keep attending after graduation. These events always feature a nice reception with food afterward, too. I actually ended up with a new job after chatting with Scot Wingo at the reception after the lecture last fall.

The event this past Monday featured Bob Young, co-founder and former Chairman of Red Hat. He had nothing prepared, no notes, no tie, and even admitted to forgetting he was supposed to give a speech that day until shortly before the event. Nevertheless, he had some good advice for entrepreneurs and delivered a pretty entertaining talk.

Following my usual speaker summary format, here's a list of what I found interesting:

• When they started Red Hat, many including the DOJ were talking about how Microsoft might need to be broken up to restore competition in the marketplace. After a few years, Linux was a viable, commercial competitor and the talk changed to the very real threat Microsoft faced.
• At first, customers had no clue why they would want the source code to their operating system.
• "Entrepreneurs want to change reality to the benefit of their company and their customers."
• On how capitalism can do more good, faster for society than government: "The thing that did the most to alleviate rural poverty since WW2 was Wal-mart." Good point about how it lowered the cost of living in the country and gave rural people comparable purchasing power as urban people with access to big discount stores.
• "Do something for some set of customers that they can't get anywhere else."
• Entrepreneurship is as simple as "looking for holes in the marketplace."
• You need to be tuned in to what customers really need, not what they say they want. "Your customers want ice cream cones, but need spinach.
• "Do things you love doing, because then it ain't work."
• Self-described world's worst student.
• Don't listen to your advisors. You're the one dealing with your customers, they're not.
• Responding to a question about marketing: "I only understand sales. It's about grabbing the guy by the collar and shaking him until the money comes out. Marketing requires real intelligence." :)

Comments are welcome. I'd like to know if anyone else finds my random notes from such talks at all interesting or if these posts are just for my own benefit.

Mark Fletcher's second post about successful outsourcing has some good advice for anyone worried about people copying their web startup ideas:

I believe that, in general, most technology behind an Internet service can be copied. It's the execution of a business that matters, how fast you get out there, how quickly you iterate, how well you build and communicate with your users, etc. That stuff can't be copied.

In his case, outsourcing various small projects on Elance has enabled him to more efficiently execute on his business objectives. It's obviously worked, too, since the companies he founded were acquired by Yahoo and Ask.com.

I was reading Dick Costolo's blog (founder of FeedBurner) when I saw the following great quote about starting a company.

The key is to just get on the bike, and the key to getting on the bike is not the confidence in knowing you will be successful if you do x,y,z. The key to getting on the bike is to stop thinking about "there are a bunch of reasons i might fall off" and just hop on and peddle the damned thing. You can pick up a map, a tire pump, and better footwear along the way.

The idea/advice that the best way to start a company is to just jump in and figure everything out along the way is common from nearly every successful entrepreneur. Maybe they're on to something.

I attended another fantastic CED Entrepreneurs Only Workshop today. The speaker this time was Michael Doernberg, CEO of eMinor, creator of ReverbNation. He gave an informative and entertaining presentation about what he's learned starting four companies and successfully exiting two of his previous ones. I really enjoyed hearing all his tips and stories.

Here are my notes:

• Success as an entrepreneur is luck. "All you can do is improve your chances."
• His co-founder's grandfather used to say, "Entrepreneur... well, that's just French for unemployed." :)
• "You can't part-time it." - You have to be fully committed, especially in the early stages of a startup
• Understand the market, the buyer of what you're selling, and what drives them. What do they really need. Example was all the effort wasted adding dictation capability to MP3 players - no one uses that feature.
• You must validate your ideas with potential investors and customers, not your co-founders and people just like yourself.
• Pay attention to the details of your business strategy. CP/M created by Gary Kildall (deceased) vs. MS-DOS by Bill Gates. The decision to bundle MS-DOS with PCs made the difference between being the richest man in the world and being dead. -- I'm still a bit puzzled by the correlation between these events, but it made for a funny, if odd, statement during the presentation.
• VCs have a pack mentality. You need to be in an area they want to invest in right now.
• You can't bank on investors generically adding value to your business like they claim. Have a clear idea of exactly what you want from them.
• Look at a VC deal in total, not just the valuation. Every year they come up with new terms and tricks.
• Presenting to VCs
  • Focus on opportunity and your abilities
  • Don't sell subtleties about why your product is slightly better than others
  • Acknowledge and address uncertainties
  • Tell them what you know and be honest about what you don't
  • Explain what you plan to do with their money, how is it going to rapidly grow the business
  • Go big or go home - VCs want rapid growth now, not a lifestyle business
• There's usually an opportunity to exit early and if you don't take it be prepared for the long haul. A company is worth the most when it's a new technology and when it's a market leader, not when it's struggling to grow its initial customer base.
• Greed is a powerful negative influence. "If it's the right time to sell, sell." Don't keep holding out for a little more.
• Updated: I forgot one of the best tips... If you want to bake pies, don't start a pie company, go to work for one. Likewise, if what you really want to do is write code, don't start a software company, work for Microsoft. Building a business is pretty much the same in any industry, so start one only if that's what you really want to spend your time doing.

Here's a good article from Business 2.0 about how failures enable internet startups to learn, adjust, and eventually succeed. They profiled Dogster, Like.com (formerly Riya), and Google Answers.

I attended a good Entrepreneur's Only Workshop lunch at the CED this week. The speaker was Tim Gupton, an accountant and partner at HPG who has been involved with and co-founded quite a few biotech startups. He gave a well-prepared talk about company valuations. The word must be out that he's a good speaker because the room was just about packed.

Here are a few notes I took during his talk that I thought were interesting:

• Investors expect three rounds of funding and then an exit (acquisition or IPO)
• Typical venture fund is for ten years. Best to get in right after the fund closes so the VCs aren't pressuring you for an exit too early.
• "It costs a couple million dollars a year to be public" (for compliance)
• Seed financing - they expect over 80% return
• Startup financing - they expect 50-70% return, already have prototype product, not profitable
• First stage financing - they expect 40-60% return, on-going business, real product, customers, not necessarily profitable yet
• Two types of expert valuations (for a private startup):
  • Restricted Letter Report - internal, costs 4-5K
  • Unrestricted Report - public, 15-25K
• QBV (Qualified Business Venture) Tax Credit is important for angel investors - 25% tax credit for NC state taxes

Mark Cuban has a great series of posts about how his path to success got started. For anyone who doesn't know, Mark Cuban is a billionaire who owns the Mavericks NBA team and made his fortune in the computer industry. The key advice in his posts is the idea that you must constantly ensure you're smarter and more knowledgeable than all your competitors. The story of a future billionaire spending his time reading computer manuals cover to cover really drives this point home. The whole series of posts is very interesting to read.

Marshall Brain, the man (I almost said brain, but the pun was so bad it hurt) behind HowStuffWorks, recently posted a nice, short presentation about how to make a million dollars. Basically, save $5 a day or start a business and become an entrepreneur.

I saw Marshall Brain speak once about his entrepreneurial endeavors and thought he was an interesting guy. During a lull in the speech when he was talking about HowStuffWorks, he asked the audience to ask him how something works. Someone asked about a hair dryer and Marshall really lit up describing all the details of such a common appliance. To this day, hair dryers and toasters still remind of his description of the nickel-chromium alloy called nichrome that's used in their heating coils.

Paul Graham's latest essay, The Word "Hacker", is perhaps one of the best essays he's written -- and that's saying a lot. I dream of someday being able to write as well as he does.