This past weekend I had to work in the yard cutting out branches and big, thorny limbs. Rather than haul the limbs to the dump or pull them out by the trashcan, I asked my neighbor if he wanted them to us as kindling in his fire pit.

They weren’t really large branches and they couldn’t keep a fire going for a very long time, but they were the perfect size for starting the fire.

Building a startup is a lot like building a fire, and you need kindling along with a few other items.

With a fire you need a match, some paper, kindling (small sticks and twigs) and a few large logs to keep it burning. In a startup you need an idea (match), dedicated people (some paper) to ignite the MVP (kindling) and a final product (big logs) to create revenue and keeps the company growing.

Without any of the four components – your toast!

You can’t build a fire with just big logs. You can’t start a fire without a match, and kindling won’t keep your fire going for very long.

You can’t start a company with just an idea or only an awesome product. It’s takes all the components to really get it right and build something that will last.

Just like building a fire, make sure you gather all the components you need before building your next start-up. A bunch of matches and big logs won’t do it. You’ll need the right people and an MVP too.

This is a great definition of Entrepreneurship! “Entrepreneurship is the art of finding profitable solutions to problems.” It really is that simple, but just don’t discount the work involved.

1. Find a Need and Fill It, Find a Problem and Solve It.
Needs and wants are unlimited. Therefore, the opportunities for start-ups and success are unlimited as well. The only constraint on the business opportunities available to you are the limits you place on your self. Wherever there is a widespread and unsolved customer problem or a process that takes way too many steps, there is an opportunity for you to start and build a successful business.

Once upon a time, before photocopies, the only way to type multiple copies of a letter was with carbon paper places between sheets of stationary. But a single mistake would require the typist to go through and erase the mistakes on every single copy.Then a secretary working for small company in Minneapolis began mixing flour with nail varnish in order to white out the mistake she was making in her typing. Soon, people in other offices began asking for it. The demand became so great that she quit her job and began working full-time manufacturing what she called “Liquid Paper.” A few years later, the Gillette Corporation came along and bought her out for $47 million cash.

2. Unlimited Opportunities
There are problems everywhere. Your job is to find one of these problems and solve it better than it has been solved it before. Find a problem that someone has and see if you can’t come up with a better solution for it. Find a way to supply a product or service better, faster, or simpler. Start out looking for easy problems to solve. How often have you thought to yourself – man that was easy, why didn’t I think of that? It’s your turn to start looking for easy problems and easy solutions to those problems. Don’t wait, I’m sure you can find 5 problems today – just start looking for them.

3. Bootstrap Your Way to Success
Once you have come up with a problem or idea, it’s time to invest your time, talent, and energy instead of your money to get things started. Most of the great products come from ideas rather than just big bankrolls. If your idea or solution is good, money will find it’s way to you. Focus on making a good product that people actually want rather than need. An my favorite quote for start-up success is “Develop a Painkiller, not an Aspirin” – it cost the same.

4. Focus on the Customer
The key to success in any business is to focus on the customer. Honestly, product development is the easy and fun part. Customer development is a whole lot harder – time consuming and more frustrating because you can’t control the customer. Become obsessed with your customer. Look at things from your customer’s perspective. What do they need? How much will they pay? What would they think of an alternative solution? What keeps them engaged? Focus on your customers and their “wants”.

Here’s an early interview from Robert Scoble with Kevin Systrom when Instagram was around 300,000 users and was just a few months old.

I’ve been following Instagram and Kevin Systrom since they launched the Instagram App for Apple less than 2 years ago. I’ve used it many times, but never really fell in love with it. Many start-ups fail, but once in awhile, a company comes along at just the right time and nails it. Then all the rules about valuations just go out the window. $500M one week and a week later it’s $1B and they are being bought by Facebook. Wow. Congratulations guys.

http://cinch.fm/scobleizer/126959

Do you choose to react with fear and scarcity? Or do you choose to see the opportunity to create change and abundance to help millions of people Worldwide?

Hopefully, Peter’s presentation will change your view of solving the World’s problems today!

Abundance Is Our Future

Thomas Jefferson said, “Nothing can stop the man with the right mental attitude form achieving his goal; nothing on earth can help the man with the wrong mental attitude.”

I’m not saying that you have to wake up every morning with a big smile and talk to yourself in the mirror (although it may not hurt), but  first and foremost, you have to be in control of your attitude and your thinking.  You must become mindful of your thoughts and words that you are using everyday.

Our thoughts, words and expectations have tremendous power and influence over everything we do. Often times, all it takes to bring about a drastic change in your company (or in your life) is to just change the way you are thinking and doing.

What are you allowing your mind to dwell on today? Are you focused on problems, or on the solutions to those problems? Are you paying attention to what you can’t do, or what you can do? Are you focus on what skills your team doesn’t have or what skills they’ve already got? Are you thinking small, or are you thinking big?

The story of Roger Bannister is a perfect example of the power of changing your thinking. For hundreds of years, people thought it was impossible for a human to run a 4-minute mile.

The experts declared, “A human can’t run that fast in that length of time.”

Then a man named Roger Bannister broke the record and performed a “Miracle”.

People soon changed their thinking, and it wasn’t long until many others started breaking the 4-minute milestone. Roger Bannister changed the way people thought about the 4-minute-mile, and within ten years 336 other runners had broken the 4-minute-mile.

What happened? People changed their thinking, and they stopped listening to the experts. Roger Bannister had done it. It was no longer the impossible and many others followed.

If you want create a Successful Start-up, you must begin with the right mental attitude and the right “thinking”.

What you think determines how you feel, and the way you feel determines how you act; and the way you act determines how you motivate employees, how you relate to your customers, how you communicate with your partners, how you deal with problems at the office, and ultimately how successful your start-up will be.

Fail #2: Don’t show me a confusing looking web application or interface with tons of features.
Save all those great ideas and extra features you want to put into the product for later. Show me something simple that can get the job done and that I can understand. Wait to add all the “bells and whistles” after you’ve heard what “bells and whistles” your customers really want. Investors don’t normally invest in things they can’t understand.

Fix #2: Show me the simple version and explain how it’s helps your user in their everyday lives. Let us experience the joy of discovering you’re product.

http://brendanbaker.tumblr.com/post/16830178199/derisking-buckets-how-to-identify-and-deal-with

“Investors fund startups when their excitement outweighs their hesitation. Hesitation comes from perceived risk. And for a startup, we can group these risks into some buckets:”

• Team risk: can these people work together to build a huge business?

• Technical risk: can this be built in a reasonable timeframe and with reasonable resources?

• User risk: will people actually want to use this?

• Revenue risk: will people actually pay for this?

• Scale risk: will people use or pay for this in large numbers?

• Partner risk: will any required strategic or distribution partners come on board?

• Customer risk: will they be able to sell to important customers?

• Funding risk: will anybody else fund this (esp seed stage, for many investors)

These are the questions I think almost every investor is asking themselves while listening to a Pitch. Make sure you address these issues when Pitching your awesome idea.

Fails in the Pitch

I can share with you lots of thoughts and ideas to incorporate  into your “pitch”, but I also wanted to share some things you should NOT be doing during your meetings and presentations with investors. This is the first post in a series called Fails in the Pitch.

Fail #1: Don’t OVERWHELM me with a 31 page business plan.

I can’t tell you the last time I read through a normal “business plan”. That was something you did in the 1990s. Today, most Angel investors and Venture Capital investors don’t even want (and will never ask) to see your business plan. I would rather shoot myself in the big toe then waste an hour of my life digging through any business plan.

Most investors, like me, only want to see a 1-3 page executive summary. That’s all we need to make a decision on whether or not were interested in your product, idea or service. If I can’t understand your business, market and potential customers after reading a few pages then it’s way too complicated for me, and I don’t invest money in things I can’t understand.

I don’t want to crush your entrepreneurial dreams, but spending two weeks writing a 31 page business plan is probably a “big waste” of time, and using the boilerplate version of a business plan you have find on the internet – makes it even worse!

Fix #1: A well done Executive Summary is enough.

Most startups don’t have the luxury of using a “high end” design firm or branding company, but a well designed executive summary, with a put-together pitch deck, and a simple idea and/or product will go a long way in peeking the interest of potential investors.

It only took about nine months of deal flow and a handful of “pitches” before I realized that most entrepreneurs are really, really bad at “selling themselves” and “pitching” their ideas and companies to investors.

I cringe every time I hear about a great start-up idea or read a well-written business plan, and then watch in horror as the founder stumbles and falters throughout the “pitch”.  So many good ideas and businesses are cast aside or ignored, and fail to receive the benefits of a properly funded start-up – all because of a poor presentation during the “pitch”.

During a recent VC meeting we sat and listened to a founder present a fantastic problem, idea, and solution – the Trifecta in the investor community. This was a technology play in a niche market with a proven concept. The only thing needed was the influx of money to take this business to the next level, but after watching a “pitch” that lacked focus and direction, we spent the next 30 minutes debating about whether or not this guy could actually turn his business into a profitable company worthy of our investment dollars. Because of a poor pitch he didn’t get funded.

The sad part was that as I’m sitting there taking notes, I’m thinking to myself, if only I could have spent a few hours with this poor guy BEFORE his presentation. We could have highlighted “this or that”, deleted a whole section here, added more about “this”, not talked about “that” – the guy probably could have gotten a “YES” and ultimately our money.

Learn to Pitch before you start raising capital. Here’s four simple suggestions to improving your pitch.

Tell us what you do in as few words as possible.

Maybe it’s me, but it seems like most Angels and VCs are people with type “A” personalities. We have short attention spans and don’t like to waste time. Give us the “short version”, and if or when we ask questions, then you can provide us with more details. The first thing we want to do is understand what it is that you do – in plain and simple English. Next on the list, we want to know what problem you solve and why your solution is important to your customer.

What’s the plan? How does it scale?

As investors, we aren’t always interested in your product, but we are interested in “returns”. Your mission statement is important to me, but what is really rolling around in my head while you’re up there giving us the “pitch” is: Will this work? Is this the right guy/gal for the job? How much money will we be able to make when we sell our shares? Does this thing scale? Explain to me how you are going to market and grow the business. Most investors are in it to make a profit, and if you’re business doesn’t scale – it probably won’t be very profitable. I’m not interested.

What’s your go-to-market strategy?

Your great idea is useless if no one hears about it or knows it even exists. So many people spend time developing a great product, only to find out no one wants it. How are you going to get it into the hands of your customers? What is your Marketing plan? What is your customer acquisition cost? Do you have any sales channels besides your sales team?

Let us touch and feel your product.

A short demo or actual product sample is really key. I want to use it, at least see it. Is it simple? Does it solve your customer’s problem? Is it easy to use from a user’s point of view? We don’t need to understand all the features or really any of the code – I just want to know that it’s clean, works and is simple to use. It’s hard to invest in things that look too complicated and things we can’t fully understand.

If you nail these 4 key points in the “pitch” and can answer some basic questions about your product, financials and your competition – you’ll have a much better chance of raising funds and building your awesome company.

People involved with start-ups and those investing in new ideas are really cool. Many are young, passionate and using their innovative ideas to build a better World.

When I first got involved with my Venture Capital Group and began hanging around the Indianapolis start-up community, I absolutely fell in love with people and friendships. I look forward to every VC meeting month meeting  and I don’t think I’ve missed a VERGE INDY event since I attended my first one in 2010.

Honestly, it wouldn’t bother me if my first few investments ever made money because the relationships I have built and the connections I’ve made over the last two years alone were worth it. Being a dentist and owing your own company can be lonely at times, if you haven’t emerged yourself into your local start-up community – you should try it. I really enjoy hanging out with other entrepreneurial people, developers, investors and start-up junkies. They’re just cool people.