Source: USA TODAY
As an entrepreneur and small-business owner, I have been fortunate to have become friends with, and learned from, many successful entrepreneurs.
But the person who had the greatest impact on my business life was the late Eugene Kleiner, my mentor and dear friend. May 12 would have been Kleiner’s 90th birthday, and as a memorial to him — and to help aspiring entrepreneurs — I want to share some of Kleiner’s entrepreneurial wisdom, enshrined in Silicon Valley as “Kleiner’s Laws.”
One of the “traitorious eight,” widely recognized as the founders of Silicon Valley, Kleiner also co-founded one of the earliest, most successful, and to-this-day most influential venture capital firms in the world — Kleiner, Perkins, Caulfield & Byers. He was also committed to supporting entrepreneurs, and incredibly generous to me with his time and counsel.
I became friends with Kleiner when I was the director of a non-profit agency.
He was president of the board, and we worked closely together. Eventually, I decided to strike out on my own as a consultant.
When I landed my first client, a small sportswear company needing a business plan, I asked Kleiner for advice. He took me to his office, sifted through stacks of business plans, selecting about a dozen.
“Go home and study these,” he instructed. A couple of weeks later, he sat down with me and patiently reviewed the plans, pointing out factors that made a good plan and successful business.
For years, Kleiner and I had lunch regularly. He offered advice and insight both on my own business and companies for which I was consulting.
Kleiner would tell me stories of companies he had invested in, the challenges they faced and why they made certain decisions. He would point out missteps or smart moves.
It was an amazing, one-on-one tutorial from a brilliant businessman who helped launch companies such as Genentech, Compaq Computer, Sun Microsystems and Electronic Arts.
Not one week goes by that I don’t recall — and call upon — the advice that Kleiner gave me, And I believe it can help you as your grow your small business or visionary venture.
A few of the most memorable of Kleiner’s Laws:
• Will the dog eat the dog food? The best-known of Kleiner’s Laws, many people lay claim to this sage advice, but Kleiner first coined the phrase.
He challenged aspiring entrepreneurs to test whether customers actually would buy their product or service before they invested too heavily in development. Kleiner’s “dog food” comment is regularly repeated in Silicon Valley, with manifestations such as the concept of developing a “minimal viable product” and testing market response.
• Build one business at a time. I have to remind myself of this Kleiner maxim repeatedly.
That’s because I, like many entrepreneurs, frequently recognize many exciting business opportunities. But Kleiner knew that focus turns a great idea into a great business.
Don’t dilute your resources, energy and attention by going off in different directions.
• The time to take the tarts is when they’re being passed. Timing is a critical component of success, and Kleiner counseled entrepreneurs not to pass up opportunities that might not come again, especially when it came to securing investors.
• It’s easier to get a piece of an existing market than to create a new one. One of the greatest business challenges is to introduce an entirely new, revolutionary product or service.
Kleiner advised that innovating and improving upon existing products or services that are in demand is faster and less costly. For example, Google wasn’t the first search engine nor the iPod the first mp3 player. They both built on existing concepts.
• After learning some of the tricks of the trade,some people think they know the trade. When you’ve had a bit of success, it’s easy to believe you are an expert, which typically leads to major mistakes.
Kleiner understood the business value of humility.
• Venture capitalists will stop at nothing to copy success. A slight jab at his own profession, Kleiner knew that investment dollars tended to go toward very similar concepts at any given time.
That’s something to keep in mind if you’re hunting for financing for your start-up. Identify what’s already hot in the venture capital world.
Rhonda Abrams is president of The Planning Shop and publisher of books for entrepreneurs. Her most recent book is Entrepreneurship: A Real-World Approach. Register for Rhonda’s free newsletter at PlanningShop.com. Twitter: @RhondaAbrams. Facebook: facebook.com/RhondaAbramsSmallBusiness.Copyright Rhonda Abrams 2013.