StockTwits

In reference to a post by Joe (quoting James Altucher), let me quote something from James too, that I found to be true, in exactly the time space-time-continuum that this article relates to… (Emphasis added by me.)

 

How I screwed Yasser Arafat ….

But I did learn several things that became incredibly important to me later. :

A) if you have to raise thirty million to start your business, its probably not a good business (at least for me). All of my good businesses (businesses that I started that I eventually sold and made money on) started off profitable from day one and never raised a dime of money.

B) Most M&A transactions don’t work. When you buy a company, its very hard to keep the owners of the old company incentivized. 90% of acquisitions don’t work. Build your business. Don’t buy it.

C) A lesson I learn repeatedly: traveling for business almost never generates more revenues. New York (and America) are big enough places to generate revenues. You should never travel. In the course of doing this business I traveled repeatedly to the west coast, Denver, England (to try and buy a company), Sweden (where Ericsson was based), Germany (Ericsson wanted me to show up at a conference for one day), Georgia, Florida, Boston, etc etc. Not a single meeting generated any revenues for the business but wasted hundreds of hours of my life.

D) Hiring smart people doesn’t work if you aren’t smart. Everything ultimately comes form the top down.

E) Spending a lot of money on branding and marketing materials is a waste of money for a startup. If you don’t know who you are, no amount of money will create materials explaining who you are.

F) If you are going to raise thirty million for a business, then raise a hundred million if you can. Don’t turn down Henry Kravis’s five million. It doesn’t matter how badly you get diluted. If you have to raise money, take in every dime you can.

G) MOST IMPORTANT: If you raise thirty million, spend none of it. Warren Buffett once said, “if you know a business will be around 20 years from now then its probably a good investment.” With thirty million we could’ve stayed in business for 20 years or more and eventually figured ourself out. Instead, I spent forty million in the first month or so. I learned a lot, and over a hundred million was lost.

Not-so-startup food for thought eh?. Apparently my blog is a great startup. Having to field around 10 to 20 spam posts (after kismetting) a day must mean something right ? Hah!

Author: roelf on December 28, 2011
Category: Uncategorized

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