11 Jun 2008
0 CommentsEntrepreneurial Toolkit #2: “Don’t Drink Your Own Bathwater”
In the tech heyday of the mid-1990’s, my favourite US investment banker, Mark Slater (formerly of Hambrecht & Quist) had a strategy to avoid CEOs that, as he so eloquently put it, “Drank their own bathwater”. Mark had identified the tendency amongst CEOs, even entire executive teams, to become so satiated with the power and glitz of riding the waves of technology/media hype, that the corporate adulation goes straight to their head.
Ego and ambition, never faults in themselves, taken to extremes tend to cloud better judgment. Anyone who has visited their capital city, like Washington, London or Ottawa, has witnessed the same effect that all that marble and walnut lining the corridors of power have on newly elected Members of Parliament or Congress.
I’m sure all of us entrepreneurs have been seduced by the siren call of their own PR. I know I have. But long ago I learned that, no matter how big the entrepreneur’s ego, it is critical to be self analytical and have enough inner humility and judgement to resist the corrupting force of power and spin. Every company has faults, challenges and issues to deal with. In truth, no matter how great the press or the wave being ridden, no company can entirely escape the buffeting of real world forces and the ups and downs of a cruel world. Navigating such turbulent waters is simply another challenge entrepreneurs need to face every day.
Ed Iacobucci, CEO Dayjet
One example, and a person I would consider a mentor and role model, is Ed Iacobucci, founder of Citrix Systems and more recently Dayjet. Ed, an industry visionary, pundit, technologist supreme with energy and a will to win, is a man for whom I have infinite respect. Specifically, Ed has weathered highs and lows like almost no one else I know. For example, when I first met him, he was CEO of an almost bankrupt startup selling multi-user OS/2 technology (go figure). Later, after re-targeting the Citrix product family around Windows NT, his company was a NASDAQ darling and on a roll.
Imagine being in Ed’s shoes when, at the February H&Q conference at the Westin St. Francis in San Francisco, he learned that Microsoft had just informed them that they were planning to compete with their core product, Ed led the charge with the team. First he did the honest thing and issued a press release, which had the effect of instantly wiping out over 80% of Citrix’s market capitalization. Without even going home, Ed flew straight to Redmond and led the 24×7 multi-month battle to save Citrix from being “Quickenized” by Microsoft. A $150 million deal saved the day, but the key fact was that Ed remained honest to himself and his shareholder base throughout, which is no simple task for a major public company given shareholder disclosure rules. Several years later, when his stock price touched $50, making Citrix worth a cool $20 billion, his only comment was a modest and realistic “that stock price is a lot to live up to.” Perhaps this illustrates why I have such admiration for Ed as an individual.
For every Ed Iacobucci, there were many dot com era fibre and telecom firms that, despite all hard data to the contrary, ran their businesses into the ground on the false proposition that the interent was doubling every 90 days. And, make not mistake, sheer hubris was the major contributing factor.
In summary, humility and being self critical (“not drinking your own bath water) coupled with fearless passion (the killer instinct and laser beam focus) are two of the most important qualities in the Entrepreneurial Toolkit. Well balanced, and taken together, they are a winning combination. Most importantly, like almost all personal success factors, they can and must be learned as only a rare few are born with this wiring.
First of all, Chris Anderson, editor of 
Having already seen venture investor and advisor Chris Sacca doing a similar presentation at the 
The interplay of the two Chris’s (Anderson and Sacca) with later keynote Jeff Taylor (
Again, major kudos to Communitech for pulling this remarkable event together. It is a real step forward for the Waterloo startup scene. To illustrate, less than three years ago, at October 2005 Entrepreneur Week, when Tony Perkins (
The world is indeed a strangely fascinating place. Technological forces have recently flattened the world, making the global village predicted by 
Likewise, the 1999 Vietnamese/American film 
On Thursday, I attended the pre-launch party for what is an exciting new social enterprise. The guest of honour, Jonathan Howard, a 24 year old (and, I am proud to say, my nephew), is embarking on an extraordinary quest. On Tuesday, 25 March he will, in his 
8 Jul 2008
0 CommentsEntrepreneurial Toolkit #4: Taste the Cash Burn
Whether you run a startup (pre-revenue and running on fumes), a larger, later stage company (with actual revenues and earnings) or even a public technology company, the topic of cash should never be far from your consciousness. And, it goes without saying that keeping tabs on cash is generally even more germane in social enterprises.
For many early stage entrepreneurs, skilled in technology, marketing and strategy, the notion of vigilance around cash burn might seem mundane, something to be avoided or delegated. There is no question that companies endowed with more cash on their balance sheets can act more strategically. Conversely, It is the rare company indeed that isn’t significantly cash constrained at some part of its life cycle. As a result, you need to be on top of cash burn and not let cash crises catch you off guard.
Of course your need, or even better should virtualize, solid financial and accounting management skills. Notwithstanding this, as CEO, cash needs to figure as a constant item in your personal mental checklist. In the New Venture 2.0 Playbook, discussed in much more detail in an earlier blog post here, Grover Righter has aptly dubbed the level of importance of cash as “The CEO’s Mistress” (pictured at right).
Yet, many entrepreneurial CEOs can’t answer simple, but fundamental, questions, such as:
While the Venture 2.0 Playbook outlines a complete methodology to build certain entrepeneurial technology startups, from beginning to exit for much less money, the key point of today’s post is that every entrepreneurial CEO must internalize the whole issue of cash burn. Remember, it’s not enough to sleep peacefully at night, comfortable in the notion that your CFO is handling all of that cash stuff.
And, ironically, this need doesn’t disappear even in a larger firm. When I ran a public company, portfolio manager expectation was that the CEO knew the business model, budget and forecast to a reasonable level of detail for up to 2 years into the future and also with longer term strategic thinking. Because public CEOs (and CFOs) are expected to give “street guidance” of future quarters, it feels like trying to drive a car where the steering column is very long — in this case say 18 months long. Keeping all of this in your head can be challenging. And, furthermore as you discussing product, market and strategic questions, all may well have financial implications. In other words, even minor adjustments in one area of the business can significantly alter the “18 month steering” problem of future financial guidance.
To summarize, for the entrepreneur without formal financial training, seriously consider upgrading your financial skills (by formal training, finding a good mentor or via your own research). And, even more important, take them to heart – particularly in the area of cash management.