Event Update

• A company which provides data sheets online which are required by the federal government to enable companies to easily comply with federal regulations
• A private label manufacturer of dental products, which provides highest quality products at retail prices below the competition, but enables the retailer to make higher absolute gross margins
• An energy company that does light and HVAC retrofits for commercial buildings, providing a two year payback, plus energy savings
• A internet-based music company, which provides integrated resources for unsigned musicians to get reviews of their music, plus then distribute their music, book concerts, and provide licensing opportunities

• No matter how good the product, it does not sell itself.  A company must have an excellent and active sales force.
• He believes in companies that sell something that involves recurring purchases, such as toothbrushes, and transactional companies such as credit card clearing, rather than selling goods or services that customers only buy once or twice.
• A product needs to have a point of difference versus the alternatives: e.g. cheaper and better.
• A company needs a good sales plan, good accounting, and good expense control.
• If an investor offers you (the entrepreneur) more money, take it, even if it dilutes your position.  It is likely you will need that extra money to achieve your plan.
• Always keep your product at the cutting edge.  Those whose products constantly innovate will retain customers.  Those who don’t won’t.  See The Innovators Dilemma (Clayton Christenson, 1997).
• Embrace youth.  Bring young people into the company to keep it energized and to provide continuity.
• Take risk.  Nothing lasting happens without it.

• Invest in convertible debt, rather than equity.  It puts you in a better negotiating position if the company gets into difficulties.
• Always keep enough cash in reserve to be able to advance a few cycles of payroll for the company.  Every start-up gets to the point when they are growing that an investor will have to cover a couple of payroll cycles.
• Avoid medical products that require FDA approval.  The time to market launch is too long and too expensive.
• He really likes businesses enabled by the internet: ease of distribution, easy to grow.
• Low capital expense structure/ low fixed costs are preferable.
• Intellectual property/ patents are expensive to protect and not necessarily that valuable as a result.