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What can you learn from Joe Costello…so you want to be an entrepreneur?
By Jon Gillespie-Brown | June 11, 2009
At one of the classes that I am a mentor at UC Berkeley HAAS Joe Costello came and gave a lively talk, he is a charismatic and very tall entrepreneur famous for growing Cadence to near a $Billion in sales. Now that what I call a great salesman!
So Joe can still talk a good game after 10 years since he left…and here is a summary of his “words of wisdom for the class”.
(These are from my notes and so they are little condensed but still useful I hope as he has a very strong opinion on most things about raising VC funds and being an entrepreneur).
About entrepreneurship:
- The VC’s are simply trying to figure out if YOU are investable? they are honed in on the people "pattern recognition" can “sniff” you, the business plan is irrelevant. What’s the team "made of"…
- He says entrepreneurs are "born" and not made… (bad news if you believe that, I don’t personally)
- Good news is they are evenly distributed across the World.
- You can kill entrepreneurial spirit if you are not careful and you can also develop that spirit
He also observed that if you are starting up now that the two biggest sectors in all economies = healthcare and education…untouched by technology industry.
When pitching a VC watch out for what they are looking for:
VC look for 2 things =
- do you have the right reflexes (good dna),
- also how badly damaged have you been in life (or what skills sets have you developed).
Costello believes that everything is driven by our “habits”. He likes Covey’s 7 habits… and says it’s a great book becuase most of your behaviors are dictated by habit and they are random habits, some good/bad.
In order to succeed and win big he suggests you “must pick good habits (if you have the dna) and reinforce them to improve yourself as an entrepreneur”.
He also contends that it’s also important to have the right people around you and to reinforce their “good habits”.
No.1 habit he looks for = focus the very best "way" that’s where to put all your energy (don’t scatter your energy)
His insight on pitching VCs was:
== VC trying to distract you and figure out if they can work out who’s boss, unsettle you, team friction, can they throw you off ==
Developing the idea of focus, he went on to give a story about being a pilot and how a core skill they have to learn is all about “negative target fixation” i.e. while flying you must constantly be on the lookout where to land? He says that pilots are anal, they hit the utility pole…as you make sure you don’t look at the wall or you will hit it….
It’s critical you hit the "open field", in other words “you eliminate the negative and focus on the outcome”.
Costello extends the analogy of the focus and vision of the open field to leadership (person and team) – the team want a clear “vision” (i.e. what’s the open field)….and then ensuring you land in the right place i.e. did you think about all the issues (water, ravines, mirage) = focus on the sweet spot.
He had a neat test of your ability to successfully launch a business and raise funding:
- (go/no go) The business plan, what rules are changing..if you don’t change the rules in a fundamental way you will lose, no investment. You must have a rule breaker…can’t beat big guys, in order of magnitude to beat you need the same order of mag i.e. same capital to meet the rev’s of competition. **fundamental**
- Got to be able to SELL your ideas…all great entrepreneurs are a “great salesperson”. Can you withstand enormous rejection. As an entrepreneur you will suffer 99% rejection…nobody likes it when you change the rules/so they hate you. Tons of "nos"…”tough sledding”.
- Execution with absolute "conviction". You must be very stubborn about the vision but you also need to very flexible on execution.
- You have got to be having fun…entrepreneurs are having adventurers, acid test for what you are doing….it must be fun or its wrong. Your passion will show through if you love it…this is what VCs want to see.
In his closing comments he also said:
- The real “action” is what VCs are looking for = your personal energy!
- The meta rule = there are no rules in biz (he who makes the rules wins…)
I liked his talk and his reputation proceeds him, I can’t say I agreed with it all but the majority I did think was very valuable to all of us entrepreneurs.
My take on all of this was:
- Make sure that you understand your own motives and habits and hone these to optimize your own gifts.
- Make sure you pass on the good habits to the team and ensure they pass it “down” and build a great culture.
- Totally focus on a clear vision of what you are trying to do and give it 150%.
- Make sure you don’t get distracted from your clear outcome and that you can avoid the pitfalls along the way.
- In order to be a strong leader you must be able to communicate your vision with energy and conviction.
- Don’t bother starting a business unless you are making fundamental changes to the “rules” of your market.
- Don’t bother trying to beat the big guys at their own game, change the game.
- Learn to sell as a fundamental skill, if you are the engineer get a salesman as your CEO.
- Conviction and focus are all good but the road is not straight and you must be very flexible to achieve your outcome.
- Don’t bother if you are totally passionate about your business idea and can pass on that enthusiasm and energy to others.
- This passion will become infectious to the team, customers and investors and without it you stand little chance with a VC!
- Finally, be a rule breaker and a rule maker…
All great food for thought, I hope you agree.
Last 3 posts by Jon Gillespie-Brown
- Choosing a "Stanford quality" startup idea–part 3 - October 11th, 2011
- Choosing a "Stanford quality" startup idea–part 2 - October 11th, 2011
- Choosing a "Stanford quality" startup idea - October 10th, 2011
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About the Author: |
| Jon Gillespie-Brown is a published Author, Lecturer, Founder/CEO and Mentor on Entrepreneurship. He currently mentors at Stanford, UC Berkeley and the London Business School. Visit his site for tips by email/twitter, blog updates, detailed articles, worksheets, news, a free quiz and more! Go now to http://www.tobeanentrepreneur.com/ | |
