Strong heart, stomach and good wetsuit needed if joining start-up

November 22, 1999

BY MICHAEL KRAUSS

It's like going over Niagara Falls in a barrel, and you have to do it again and again and again to be successful.

That's how I described joining a start-up e-business venture to a friend who was thinking about forsaking job security for a fistful of founder's stock. He took the job, but the jury's still out as to whether the business will soar or flop.

At least I did the right thing by setting his expectations properly. If the economy and the equity markets stay solid, if Alan Greenspan continues at the helm, if he has the stomach for two or three trips over the falls, he'll probably succeed. Or, then again he may not.

Risk and reward-how much to take, how much to leave. Those are the questions that many of the best marketers are asking themselves today. And, why not? The demand for marketing skills in Silicon Valley is booming.

"One of the hardest things to find in Silicon Valley these days is a good marketing person," says Shanda Bahles, general partner at El Dorado Ventures, a Menlo Park, Calif.-based venture capital firm that helped fund the start-up of Sun Microsystems.

What does Bahles mean when she says "good?" Certainly there are lots of well-trained marketing types circulating around the Bay area, but Bahles feels there are too many "traditional marketing people who haven't figured out the rules have changed." She says there's lots of room in high-tech start-ups for marketing people "who really understand the things the Internet enables. The velocity, the speed, the direct touch you can have on people as a marketing person today is pretty dramatic." In other words, well-trained marketers who "get it" still are in short supply in the Valley.

In the old days, marketing in Silicon Valley was a euphemism for the gofer who produced the brochures the sales force used to sell the hardware. Marketing was a role trapped between product engineering and the sales department with absolutely no power or potency.

"Today more than any other time since I've been in the business, it's all about execution and marketing," Bahles adds.

Should you go West to Silicon Valley? East to Silicon Alley? Northeast to Boston, or even head to the Midwest, a growing hotbed of Internet start-ups? I say "Go for it," provided you've got your wetsuit on and you're ready for that tumble over the falls. Here's my personal check list of 10 items you ought to consider if you're going to join a start-up:

• Are you passionate or mercenary? If you're just doing it for the bucks, you'll probably fail. Join a start-up because your heart and mind are in it, not just your vision of your future bankroll.
  
• Do you have the right skills? Today's Internet start-ups require specific marketing skills. Try working in your existing company's interactive area for a while before you jump ship for a garage-based start-up.
  
• What's the product like? Is the product offer of the start-up viable? Don't jump unless you believe the product will be a winner.
  
• Is the market opportunity strong? Is the marketplace where your new start-up will compete a growth-oriented environment?
  
• What's the operating potential? Does the new start-up have the capability to put in place all the processes and operations to become a successful business?
  
• Will the governance work? Do the people running the venture have the capabilities to lead, manage, share, build and nurture a new start-up? Can they behave decisively, or will they act divisively?
  
• Do you need big company structure? This one causes many a big company executive to bail out of a new start-up. If you like the comfort of a regimented structure, start-ups are not for you.
  
• Are you an effective networker? Knowing people to contact and call and having the ability to forge strong relationships seems to pay big dividends within a start-up.
  
• Are you willful and resilient? When the chips are down, can you dig down deep inside yourself and find solutions to help the fledgling business?
  
• Are your expectations calibrated? It's never as easy as it sounds.

The other day I bumped into my friend at the local deli, the one who just joined a start-up. He was still smiling, though he looked a bit more dazed and slightly more crazed than ever before. He asked me if I'd been to his Web site. He actually asked me if I'd visit his site regularly. The more hits the better, word-of-mouth marketing and all that.

Then he took me by the arm, looked me right in the eye and told me to wait. The site would be even better in about three weeks. They're planning a relaunch.

Right then, I decided he's going to make it, even though he's still in that barrel, tumbling, end-over-end over Niagara Falls.

Michael Krauss is a partner with Diamond Technology Partners in Chicago.
He can be reached at news@ama.org.