Published in UT San Diego, June 3, 2013
Lights. Camera. Action.
I started my entrepreneurial adventures by deciding that I would be a movie director. In the early 1970s, the only thing better than being a rock star (think Mick Jagger) was to be Steven Spielberg or Francis Ford Coppola. And so I ended up at film school in New York and ultimately at the American Film Institute in Beverly Hills.
Movie making and startups have at least one thing in common. You need to raise some money. Barbara and I are asked often about how to raise money for the dream you are pursuing. And often the answer is to build a prototype — to somehow show the investor that you are resourceful and that with only modest funds, you can give the investor (and the world) a baseline sketch of what could be.
Back in the 1970s, I wanted to make a short film. It was called “Oven 350,” and it was about a young man who falls in love, cooks a meal for his hoped-to-become girlfriend, and along the way gives her food poisoning. And, like all romantic comedies, everything eventually turns out copacetic in the end, and their romance rises like a chocolate soufflé.
I needed $12,000 to shoot this movie, so I made a prototype. I found an investor, showed him the script and then to convince him, I cooked him a dazzling five-course meal in my very small (310-square-foot) studio apartment with a two-burner stove, no oven, and an under-the-sink refrigerator that could barely hold a quart of milk. And he was impressed enough with my resourcefulness that he invested. As a footnote, the film opened in New York as the short subject in front of Woody Allen’s “Bananas.”
The entrepreneurial thought here is to find a way to use your own skills in some way to impress the investor and show that you are passionately involved in the project — not just as an intellectual exercise or as a would-be CEO pitching an idea, but up to your neck in the venture. You need to find a way to demonstrate in a concrete way that you will not only take good care of the money, but that you can make magic with limited resources.
It is always impressive when the entrepreneur surprises the investor with a “prototype” cobbled together from scraps. The goal is to create that “wow” moment, where the investor cannot resist your creative solution — even if it is made from box tops and chewing gum. And needless to say, this effort is way more than a PowerPoint deck.
In most cases, the investor is betting on the jockey — not the horse — the person doing the magic show. You are looking to create the “how did he do that” moment with nothing more than a ball of string and a glue gun.
It is hard to do, and most investors will recognize it when they see it.
Allow me to add one last thought this week on the role of the CEO. In addition to doing everything from walking on water to turning coal into gold, there is one absolute must-have if you are to be the leader of the team.
That is the requirement to be the cheerleader. In addition to being brilliant, charismatic, and strategic, you must get the pom-poms out, and you need to celebrate, and you need to cheer. Sis, boom, bah! It sounds corny but it is essential to recognize your players by cheering and complimenting people and giving out goofy awards and pins.
Football coaches put little logos on the players’ helmets after a good game, and there are a hundred other examples. Put on the red wig, the clown nose and cheer. It works.
Rule No. 234
Incubators on two local college campuses are booming thanks to generous gifts from entrepreneur Irwin Zahn and his family’s Moxie Foundation that provided the funding to start the Zahn Center for Technological Innovation at San Diego State and more recently the Moxie Center for UC San Diego undergraduates.
The first Moxie Center Zahn Prize Competition was won by Solar Umbrella, which is developing a patio umbrella with solar panels and built-in outlets so that you can recharge your devices while sitting in the sun.