The Art of the Start
by Guy Kawasaki
I, Michael Parker, own this book and took these notes to further my own learning. If you enjoy these notes, please purchase the book!
Chapter 1: The Art of Starting
- pg 8: Create a mantra for your employees as a guideline; a tagline is for your customers.
- pg 9: Don’t write up a business plan, craft a pitch, or start financial projections until you have a prototype.
- pg 13: Don’t revise your product to get prospective customers to love it; revise it because customers already love it.
- pg 14: Be sure you can describe your business model in ten words or less, and don’t be afraid to copy one.
- pg 16: Important milestones are prove a concept, complete design specifications, build a prototype, raise capital, ship a testable version, ship a final version, and achieve break-even.
- pg 17: List the assumptions about the business, and link them to the milestones above so that you can test them as you reach milestones.
- pg 24: Never admit you’re scared to other employees – a CEO can never have a bad day.
- pg 24: There is much more to gain by freely discussing your idea than there is to lose.
- pg 24: If three close friends tell you to give up, you should listen.
- pg 25: Make a web site, business cards, and a letterhead immediately for customers, partners, and investors to look at.
Chapter 2: The Art of Positioning
- pg 29: Positioning states why an organization was started, why customers should patronize it, and why good people should work at it.
- pg 31: Ensure that your positioning is long-lasting, and that it does not sound like your competitors’.
- pg 33: Target a small niche – from there you can establish a beachhead and expand your companies into different areas.
- pg 35: When choosing a company name, avoid numbers, try for verb potential, ensure it sounds like nothing else, and it should match what you do.
- pg 38: Make your positioning personal so a potential customer can clearly see how your product fills a need.
- pg 40: Avoid overfamiliar adjectives and find unique language or offer scientific proof points to describe your product.
- pg 41: New hires can provide a rich vein for a positioning statement because it’s from a fresh, outward-facing perspective.
- pg 41: Communicating your positioning is every employee’s job; provide a refresh every six months.
- pg 43: Don’t lie when projecting your image, but don’t go out of your way to look undercapitalized, premature, and weak.
Chapter 3: The Art of Pitching
- pg 45: Explain what your organization does in the first minute; don’t make it an auto-biographical narrative.
- pg 47: Before pitching, learn from your sponsor what the audience would like to learn, and what attracted them to the idea and gave them an opportunity to meet.
- pg 48: Brainstorm to find connections, hooks, and angles to make the pitch more powerful and meaningful to your audience.
- pg 49: The pitch is to simulate interest, not to close a deal, so only have ten slides or so; don’t include a stupid slide about liquidity.
- pg 50: Be able to give your pitch in 20 minutes, to allow time for discussion, or in case the previous meeting ran late.
- pg 56: Get there early to make sure everything works, but bring your own projector, laptop, and printouts of the presentation just in case.
- pg 56: At the beginning of the pitch, ask how much time you have, and if there is anything in particular they would like to know.
- pg 59: If bold, catalyze fantasy, where you provide a line of reasoning that says everyone needs your product, and market size numbers are irrelevant.
- pg 61: Have someone take notes at the pitch, and play it back to make sure you got the correct information. Then follow through, and quickly.
- pg 62: Patch your pitch after each meeting in response to the most recent questions and objections, but throw away your presentation after ten or so pitches.
- pg 63: Use a dark background with sans serif fonts, with your logo on every slide, and with diagrams and graphs. Never nest bullets, and reveal them one at a time.
- pg 65: Don’t send your presentation ahead of time; if you hand it out at the start of the meeting, ask them not to skip ahead.
Chapter 4: The Art of Writing a Business Plan
- pg 68: A business plan won’t win over investors, but it’s a necessity; use it to find holes in your strategy and in your team.
- pg 68: The plan is a detailed vision of a pitch, so only begin working it once you have the pitch right.
- pg 70: The executive summary, which takes the place of the title slide in your pitch, is the most important part of the plan.
- pg 70: Don’t let it exceed 20 pages, include the key metrics, simplify financial projections to two pages, and state the assumptions behind those projections.
- pg 71: Investors require five years of projections to help them understand your scale, the capital required, and consider your inherent assumptions.
- pg 73: Write as if you know exactly what the future holds, but react opportunistically when you encounter reality.
- pg 74: To make your plan stand out, provide a list of customers the reader can call to discuss how much they need or already love your service.
Chapter 5: The Art of Bootstrapping
- pg 80: Managing for cash flow means passing up sales that take a long time to collect, and stretching out payments on expenses.
- pg 83: Don’t worry about testing; if you would let your mother or father use the product or service in its current state, ship it.
- pg 84: When building a team, focus on affordability; young, unproven people don’t know what they don’t know, so they’re willing to try anything.
- pg 87: When choosing service providers, hire the right people with good references, even if that means paying more, but always negotiate.
- pg 90: Using a reseller isolates you from customers, requires volume to compensate for decreased profit margins, and extends time to delivery.
- pg 91: By positioning yourself against a market leader, you can utilize their brand awareness to save marketing, promotion, and advertising dollars.
- pg 93: You need someone grounded with ten years of operating experience; typically a CFO, COO, controller, or accountant who can make hard decisions like firing.
- pg 94: Intentionally understaff to bootstrap; this may slow your ascent, but its’ better than laying people off or running out of money.
- pg 95: A great board of directors can provide guidance and help you get money, but can’t be hard to build without funding in the first place.
- pg 97: Set and communicate goals, designate people responsible for them, measure the execution of them every 30 days, and praise execution.
Chapter 6: The Art of Recruiting
- pg 101: The CEO must hire a management team that is better than he is; the management team must hire employees better than it is.
- pg 102: If you’re not getting a reference that’s superlative, you’re getting a negative one.
- pg 103: A startup needs kamikazes who work long hours, implementers who turn their work into infrastructure, and operators who upkeep the infrastructure.
- pg 106: Ignore functional weaknesses; be attracted to candidates with major strengths than those who lack major weaknesses.
- pg 107: Ask the candidate who all his important decision makers are, and then work with the candidate to answer their concerns too.
- pg 111: Check references early; checking after the interview will lead you to only hear comments that affirm your decision.
- pg 113: Establish an initial review period where after 90 days you go over what’s going right, what’s going wrong, and how to improve performance.
- pg 114: Reference checking is not to disqualify a candidate, but to look for consistency in how he represented himself.
- pg 116: Don’t recruit to make an investory happy; instead, recruit to build a great organization.
Chapter 7: The Art of Raising Capital
- pg 121: Current investors, other entrepreneurs, and professors can serve as a credible third party to get you an introduction.
- pg 124: Your company is flawed if you have friends or roomates in CXO positions, or former employees claiming your technology belongs to them.
- pg 126: Openly acknowledge your competitors and evaluate your strengths and weaknesses; if needed, zoom out until you have competitors.
- pg 128: Don’t tell investors about deals that will be signed to bring in revenue. Only talk about deals after they’re done.
- pg 129: Investors all know one another, so don’t try to play them against one another.
- pg 130: The optimal number of times to mention your technology is patentable is one; zero is bad because then you have nothing proprietary.
- pg 134: Courting one investor will make it easier to court others.
- pg 134: To help court an investor, check-in with them afterward and show improvement and progress after they don’t commit, but don’t nag.
- pg 135: When you take outside money, you’re obligated to all shareholders even if they own a minority position.
- pg 138: You need people with two kinds of experience on your board: company-building and deep market knowledge.
- pg 139: Send reports to your board two days before a meeting, so you spend little time communicating the facts and more time trying to improve upon them.
- pg 140: When you have bad news or need to make a key decision, meet privately with each board member in advance.
- pg 143: A law firm recognized for its finance/VC work shows what you’re doing, and will assist with the paperwork of a financing.
- pg 144: More investors means more people helping you, multiple sources of capital, and can give you allies if you disagree with one investor.
- pg 146: When a VC offers a valuation, ask for a 25 percent higher valuation because you’re expected to push back.
- pg 147: Freely circulate your executive summary and PowerPoint pitch; only ask for an NDA if an investor wants to learn more at the bits-and-bytes level.
- pg 148: Don’t be intimidated by your board of directors; instead, give them assignments and hold them accountable.
Chapter 8: The Art of Partnering
- pg 152: Never form a partnership to make the press happy or silence critics; do it only to increase revenue.
- pg 153: When you form a partnership, always define deliverables and objectives.
- pg 155: A partnership requires an internal champion at each company who is empowered and whose sole goal is to make the partnership a success.
- pg 156: Form partnerships that accentuate the strengths of each partner, rather than covering their weaknesses.
- pg 158: Never use a legal document as a straw man to get the discussion rolling; discuss on the whiteboard, define a framework, then draft a document.
- pg 159: Add an “out” clause within some defined number of days to ensure both parties won’t be trapped in an untenable predicament.
- pg 161: When schmoozing, ask questions and then shut up; follow up quickly while making it easy to get in touch; give favors, return them, and ask for the return of favors.
- pg 165: Ensure your emails have a signature, containing your name, organization, postal address, phone and fax numbers, and e-mail and web addresses.
Chapter 9: The Art of Branding
- pg 171: Design a product that delivers basic functionality without requiring the user to refer to an instruction manual. Test it on your parents.
- pg 172: Make it easy to switch from competitors to your product, but also make it easy to switch away; making it difficult will scare potential customers away.
- pg 174: From your customers, recruit evangelists. Assign tasks, keep communication open, give them the required tools, respond to their desires, and reward them.
- pg 178: Per dollar, building a community is the cheapest way to create and maintain a brand, so don’t wait for a community to form on its own.
- pg 178: To achieve humanness, try to target the young, make fun of yourself, and feature your customers. Don’t be impersonal.
- pg 180: Press coverage doesn’t convert readers to customers; instead, lower the barrier to entry, get customers, and then the press will write.
- pg 181: No matter what the weather, maintain good relations and contact with the press. You establish your credibility when times are bad, so don’t lie.
- pg 185: If given the opportunity to give a speech, cut the sales propaganda, don’t denigrate the competition, and just say something interesting.
- pg 186: When on a panel, be entertaining, never look bored, and don’t look at the moderator but the audience instead.
- pg 189: You might insult an evangelist by trying to pay them; instead, make your product better, offer them information, and honor them publicly.
- pg 190: If you want to change your logo, look and feel, mantra, or tag line, consider that it may only be now that they’re entering the public’s mind.
Chapter 10: The Art of Rainmaking
- pg 193: If your product succeeds in an unexpected market, find out why and adjust your business accordingly.
- pg 197: Ignore titles and find the true influencers in the middle and bottom of companies.
- pg 198: When you’ve found those to “suck down” to, don’t try to buy them, empathize with them, and never go over their head and complain about them.
- pg 200: Enable someone to do something they simply could not do before, as opposed to having to displace an entrenched product or service.
- pg 201: If your product doesn’t resonate with a sales prospect, ask why they won’t buy your product and take good notes.
- pg 203: Offer a smooth, gentle adoption curve; if your product or service really is great, this will help with the hardest step of getting in the door.
- pg 205: Don’t rely on the sales types to do all the work for you; encourage everyone to make it rain.
Chapter 11: The Art of Being a Mensch
- pg 211: The three foundations of menschhood are helping lots of people, doing what’s right, and paying back society.
- pg 213: A mensch does the right thing, not the easy thing, the expedient thing, or the money-saving thing.
- pg 214: A mensch pays back for goodness already received, as opposed to paying it forward.