Sometimes, You Gotta Ignore the Experts
Found|READ contributor Aruni Gunasegaram is preparing to seek angel funding for her current startup, Babble Soft, which builds Web and mobile communication software products that help simplify parents’ lives. This is Aruni’s second company. Her first, Isochron, was a bubble-era dotcom founded in 1997 — out of a business plan competition, of course. Isochron wasn’t a home run, but it wasn’t a total failure either. The company was sold off in 2002, a year after Aruni left as chief strategy officer. As she wrote recently on her personal blog, entrepreneurMusings:
The Founders/employees were washed out (i.e., got nothing) and the Investors got only a small fraction of their invested capital back. At that time many companies were just disappearing all together. When it was sold, Isochron was on its 4th CEO with me being the first. Now it’s on its 5th, is still operating and as I understand it doing reasonably well, but not the high growth trajectory we had hoped for back when we started.
In preparing to raise money now for Babble Soft, Aruni has been reconsidering her experiences with Isochron, and has written a nice essay about this entitled The Entrepreneurial 7 Year Itch. There are several useful lessons here… but I suggest you pay special attention to the following:
Looking back, if we (and our investors) had truly understood Porter’s 5 Forces we would have approached the business differently or maybe even run the other way because with a customer like Coca-Cola you don’t have much negotiating power! But hey, we were young entrepreneurs (I was 27 – what did I know? ) who felt we could conquer the world of distribution to and maintenance of vending machines and other equipment after that.
You’ve probably been schooled in Porter, and his “forces.” They’re important, but Aruni’s point here is an important one, too: had she known then what she knows now, she might not have ventured into business with Isochron in the first place. Meaning she wouldn’t likely be doing Babble Soft now, either.Ignorance has its advantages, and there is no real way to leverage it (how would you leverage the absence of awareness of something?) But, Aruni proves that sometimes it’s OK to ignore the experts. In fact, sometimes you’ve got to ignore them, or nothing will happen.
This is entrepreneurship, after all. And rules are made to be broken. See more of Aruni’s recommended reading on Found|READ, here, and for more academic sources, see this source pace on her blog. It’s all good stuff.