To Be or Not to Be: The Entrepreneur as Hamlet

Watching promising new companies fail – and a good chunk of even the most promising startups ultimately do – is not a lot of fun. It can be instructive, though. While many startup deaths are beyond the control of the startup itself – e.g. the technology doesn’t pan out, or someone else gets there first – others are variously the result of entrepreneurial mistakes. And like the rest of us, good entrepreneurs can and often do learn and ultimately profit from their mistakes.

Today, my subject is one of the most painful of entrepreneurial mistakes to watch, a mistake that is too common and (to make matters worse) by its nature tends to play out like a train wreck in slow motion. It’s what I call Hamlet syndrome. The startup that fails not on account of poor execution, but rather on account of not executing at all.

What makes Hamlet syndrome so frustrating is that after it happens you are left with the sense that the afflicted entrepreneur never even gave himself a chance to succeed. In most startup failures, even those that can be laid squarely at the feet of the entrepreneurial team, a dispassionate observer can at least come away thinking that the entrepreneur went down swinging.

Observing Hamlet syndrome, on the other hand, is like watching a batter, in the big moment of the big game, spend a lot of time fiddling with his glove, looking for signs, stretching, and stepping in and out of the box – interspersed with staring blankly at three called strikes before walking back to the dugout.

Ok, a couple of real (but disguised) examples.

Our first victim is a brilliant scientist with a long track record of good ideas, many of which have been turned into successful products. More recently, she developed some really interesting imaging technology with a broad range of potential applications, across a variety of industries from metallurgy to medical imaging to 3D printing. (Entrepreneurs with target rich ideas are particularly susceptible to Hamlet syndrome.)

A threshold question for this entrepreneur, was obvious: what application in what industry should I go after first? Obvious though the question may have been, the answer was much less so. And so … the entrepreneur did a little research. And then did a little more research. And then did a lot of research. And then … well, let’s just say after several years of waiting on a decision, I just walked away. That was two plus years ago, and I haven’t seen anything in the news to suggest that the entrepreneur ever did pick an application or a market.

Startup two had developed a really fascinating set of algorithms for manipulating data that dramatically improved the accuracy of all kinds of forecasting models. Startup two’s entrepreneur had some of the target rich marketing challenges of startup one, but even more than that could not settle on a business model. Was the business about enabling customers to make better predictions, or about making better predictions? After two plus years of debating the point, and increasingly complex analysis of the pros and cons of each approach, I am beginning to doubt there will be an answer before the window for this entrepreneurial idea closes.

I am not unsympathetic to either of the entrepreneurs in these two examples. Given all of the known, and unknown, unknowns inherent in any worthwhile startup opportunity, the possibility of making a critical mistake is a near constant source of stress. And surely picking the wrong application or market or business model is as fraught with risk and implications as any.

But as big as decisions about applications and markets and business models are, in almost every case the only decision that is certain to be wrong about any of these things is not to make any decision at all about these things. It is axiomatic that you can’t miss a target you never shoot at – but perhaps more to the point, neither can you hit a target you never shoot at either. In the startup competition, if you wait until your aim is certain, someone is almost certainly going to claim the kill before you pull the trigger.

Don’t be another victim of Hamlet syndrome. Pick a target market; spec an MVB with a compelling value proposition; decide on a business model; and pull the trigger. You may be wrong, but if you haven’t taken too much time and money to figure that out, chances are you’ll likely get at least one more shot.

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Look Before You Leap

Paul Jones, co-chair of Venture Best, the venture capital practice group at Michael Best, has been selected as a regular contributor of OnRamp Labs, a Milwaukee Journal Sentinel blog covering start-ups and other Wisconsin technology news. Paul’s most recently contributed piece, “Look Before You Leap” can be found under their Business Tab in the Business Blog section: Click here to view his latest blog.

A short excerpt can be found below:

Being a high impact entrepreneur is kind of like being a sports star: everybody wants to be one; almost no one credits how much work is involved.

The time “in the spotlight” is like the shining tip of the iceberg: most of the actual work is below the surface, where the environment is mostly cold and dark.

My object here is not to discourage anyone from making the jump to high impact entrepreneurship: we need as many folks at the top of the funnel as we can get. Rather it is more of a “look before you leap” message.

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What Good VCs (Don’t) Do

Paul Jones, co-chair of Venture Best, the venture capital practice group at Michael Best, has been selected as a regular contributor of OnRamp Labs, a Milwaukee Journal Sentinel blog covering start-ups and other Wisconsin technology news. Paul’s most recently contributed piece, “What Good VCs (Don’t) Do” can be found under their Business Tab in the Business Blog section: Click here to view his latest blog.

A short excerpt can be found below:

Venture capitalists are not the most popular folks in the entrepreneurial community, for a lot of reasons, some of which are understandable if not necessarily good.

At least one reason for not liking VCs is clearly a good one, albeit one that doesn’t apply to most VCs. The reason is this: Some VCs take compensation – cash, equity, etc. – for serving on the Board of Directors of their portfolio companies, or for providing the kind of “value added” mentoring and networking that good VCs routinely provide. That’s just wrong.”

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Freedom is Just Another Word for Nothing Left to Lose — sung by Janis Joplin, “Me & Bobby McGee”

Paul Jones, co-chair of Venture Best, the venture capital practice group at Michael Best, has been selected as a regular contributor of OnRamp Labs, a Milwaukee Journal Sentinel blog covering start-ups and other Wisconsin technology news. Paul’s most recently contributed piece, “Freedom is Just Another Word for Nothing Left to Lose – sung by Janis Joplin, “Me & Bobby McGee” can be found under their Business Tab in the Business Blog section: Click here to view his latest blog.

A short excerpt can be found below:

High impact entrepreneurs come to the arena with a wide range of handicaps their bigger, established competitors largely don’t face.

Startups are notoriously short of capital, talent and time. They typically compete with better-armed, established businesses with ample capital and human resources, and substantial brand equity. It is a wonder, to me, that even a small portion of startups succeed.

But they do. And so you have to ask how. How can small, undercapitalized startups with nothing but ideas and small overmatched teams, in the space of a few short years, not just compete in, but win sizeable markets. They must, it seems to me, have some advantages; some assets that, when properly deployed, more than make up for their obvious liabilities. What are those assets?

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First Billion-Dollar Exit for Crowdfunding. Well, Sort Of.

Paul Jones, co-chair of Venture Best, the venture capital practice group at Michael Best, has been selected as a regular contributor of OnRamp Labs, a Milwaukee Journal Sentinel blog covering start-ups and other Wisconsin technology news. Paul’s most recently contributed piece, “First Billion-Dollar Exit for Crowdfunding. Well, Sort Of.” can be found under their Business Tab in the Business Blog section: Click here to view his latest blog.

A short excerpt can be found below:

Enthusiasts for the brave new world of equity crowdfunding got some good news recently when various media outlets, including Forbes reported on the first billion-dollar exit by a crowdfunded startup. And so the crowdfunding revolution rolls on: power to the people.”

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Tumble in Start-up Valuations May Lead to More Down Rounds

Paul Jones, co-chair of Venture Best, the venture capital practice group at Michael Best, has been selected as a regular contributor of OnRamp Labs, a Milwaukee Journal Sentinel blog covering start-ups and other Wisconsin technology news. Paul’s most recently contributed piece, “Tumble in Start-up Valuations May Lead to More Down Rounds,” can be found under their Business Tab in the Business Blog section: Click here to view his latest blog.

A short excerpt can be found below:

The last couple of years have been pretty good for entrepreneurs seeking venture capital. Valuations have been going up, and financing terms have been loosening up. Something like 150 so-called “Unicorns” – VC-backed private companies valued at $1 billion and up – have débuted. Alas over the last couple of months a handful of those Unicorns have seen their valuations plummet well below $1 billion. Conventional wisdom tells us the age of the Donkey is nigh.

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Measuring Startup Investing Returns: Part II

Paul Jones, co-chair of Venture Best, the venture capital practice group at Michael Best, has been selected as a regular contributor of OnRamp Labs, a Milwaukee Journal Sentinel blog covering start-ups and other Wisconsin technology news. Paul’s most recently contributed piece, “Measuring Startup Investing Returns: Part II,” can be found under their Business Tab in the Business Blog section: Click here to view his latest blog.

A short excerpt can be found below:

“Part II: It’s A Cash Business

Today, a look at a better, if still not perfect, measure for comparing angel investor skills, Cash-on-Cash (“CoC”) returns. The CoC calculation answers the question “for every dollar invested, how many dollars were returned.”

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