Hi-Tech Start-Up Tips

CBS Radio News Tech Analyst
Larry Magid has some tips for would-be
hi-tech entrepreneurs.

It’s too soon to be certain, but there are
signs that the tech industry could be on
the verge of a comeback. If or when that
happens, you can be sure of two things:
there will be job openings at existing
companies and there will be plenty of
opportunities for entrepreneurs to start
new businesses.

I don’t know what those businesses will
be. A lot will, no doubt, focus on
products and services for the wireless
industry. There will be plenty of
innovation in the security area, and I
suspect we’ll see a resurgence in
Web-based businesses.

We won’t see a return to the excesses of the dot-com era. The days of
start-ups having $10,000 conference tables are gone, as is the
willingness of venture capitalists to fund a company based on an
interesting idea and youthful enthusiasm. Anyone with the slightest
hope of getting venture capital had better show up with a
well-thought-out business plan, a clear path to profitability and —
hopefully — some proprietary technology.

My advice is to proceed cautiously but, by all means, proceed if you
can truly make a case for the business you have in mind. Run it by
friends and those you trust and, after sleeping on it for a few nights,
start thinking about how you can turn your idea into a real business.

There are, of course, plenty of online resources that can help the
would-be entrepreneur. Inc Magazine’s Web site (www.inc.com), for
example, has all sorts of tips, links and articles on getting started,
including help with writing a business plan. Nolo Press has a Small
Business link on its front page with plenty of legal and business
resources. Click on the Small Business link at American Express’ site
for even more good ideas.

In the United States, don’t forget Uncle Sam. Remember, he’s like your
uncle, not your father, so he’s more likely to offer you advice than a
handout. The Small Business Administration’s Web site (www.sba.gov)
is full of suggestions and opportunities, including advice on how to do
business with what is a fast-growing enterprise — the U.S. government.

The Internal Revenue Service may not be your friend, but it will be your
partner. Check out its "Tax Information for Businesses" section at
http://www.irs.gov. You’ll also find other government resources at the portal
FirstGov.gov.

Starting or even joining a small business can be a daunting experience,
fraught with anxiety and the fear of failure. Trust me, I’ve been there.

Indeed, along with all the benefits and advantages, there are risks
associated with going it alone or setting up shop with a small group of
fellow entrepreneurs. But there are risks associated with any type of
employment, including going to work for a big corporation. Job security
— once nearly guaranteed by big employers, is a thing of the past. Just
about all companies have resorted to layoffs, including IBM and
Hewlett-Packard, both of which usually avoided issuing pink slips in the
past.

While I can’t provide you with a clear road map for success, I have
compiled a set of rules, or should I call them "suggestions" that might
help you get in the right frame of mind. I saved the most important one
for last: Be passionate and have fun.

Larry’s Rules for Entrepreneurs:

Don’t take it personally when things are rough but — just as important
— don’t let it go to your head when they are good. Ego and expectations
that the good times will last forever have been the downfall of many an
entrepreneur.

Be careful how you treat people on the way up. You might meet them
on the way down.

We live in a world where power and authority is fleeting and subject to
change. Don’t fight it — learn to live with it. Today’s boss could be
tomorrow’s sub-contractor. Keep those lines open. Make friends and
keep them. They will work wonders for you.

Network for new contacts, but cherish your old ones. Keep in touch
with buddies from college and even high school.

Seek advice, but make your own decisions. If it doesn’t feel right, don’t
do it, regardless of what "experts" tell you.

Learn to do things on your own. Try not to rely on others for all the
essentials of running your business. Even when you can afford help,
don’t think you’re too important to do your own typing, ship your own
packages, answer your own phone and clean up your own mess.

When you meet new people, make the relationship a two-way street.
Never take without giving something, even if it’s just a handshake and a
sincere "thank you." Figure a way to introduce yourself in 10 seconds.
Follow up with an e-mail.

Be impulsive, but always wait at least a day before acting on an
impulse.

Avoid wasting money on fluff. Expensive office space or furniture may
look nice, but it’s not nearly as impressive as being able to keep your
business afloat.

Live well but modestly, even during times of success. Silicon Valley is
populated with people with car payments and mortgages that they can
no longer afford. One way to keep the repo man away from your BMW
is by buying a Toyota instead.

Be flexible and willing to scale up or down. Keep your costs under
control. It’s amazing how small companies can throw away enormous
resources with little return.

Do your own public relations and marketing, or have it done by
someone whom you trust and who knows what he’s doing. Don’t get
ripped off.

Never here a CEO unless that person is as passionate as you are.
And don’t take his or her word for it. Check out the person carefully to
make sure his or her past isn’t littered with failures.

Take care of yourself. Buy a good chair, wear a telephone headset,
get plenty of exercise, and eat well. Make sure you have solitude to
think creatively. A walk, a swim, a weight-lifting session, yoga
meditation or a bike ride may yield more benefits than the best
consultants in the world.

Stay business-like, but remember to be passionate and playful. Have
fun.

A syndicated technology columnist for nearly two decades, Larry
Magid serves as on air Technology Analyst for CBS Radio News. His
technology reports can be heard several times a week on the CBS
Radio Network. Magid is the author of several books including "The
Little PC Book."

http://www.cbsnews.com/stories/2002/05/21/scitech/pcanswer/main509665.shtml