X-SciTech

Hi-Tech Start-Up Tips

By Bootie Cosgrove-Mather

May 21, 2002 / 12:43 PM EDT / CBS

CBS Radio News Tech Analyst Larry Magid has some tips for would-be hi-tech entrepreneurs.

It's too soon to be certain, but there are signs that the tech industry could be on the verge of a comeback. If or when that happens, you can be sure of two things: there will be job openings at existing companies and there will be plenty of opportunities for entrepreneurs to start new businesses.

I don't know what those businesses will be. A lot will, no doubt, focus on products and services for the wireless industry. There will be plenty of innovation in the security area, and I suspect we'll see a resurgence in Web-based businesses.

We won't see a return to the excesses of the dot-com era. The days of start-ups having $10,000 conference tables are gone, as is the willingness of venture capitalists to fund a company based on an interesting idea and youthful enthusiasm. Anyone with the slightest hope of getting venture capital had better show up with a well-thought-out business plan, a clear path to profitability and -- hopefully -- some proprietary technology.

My advice is to proceed cautiously but, by all means, proceed if you can truly make a case for the business you have in mind. Run it by friends and those you trust and, after sleeping on it for a few nights, start thinking about how you can turn your idea into a real business.

There are, of course, plenty of online resources that can help the would-be entrepreneur. Inc Magazine's Web site (www.inc.com), for example, has all sorts of tips, links and articles on getting started, including help with writing a business plan. Nolo Press has a Small Business link on its front page with plenty of legal and business resources. Click on the Small Business link at American Express' site for even more good ideas.

In the United States, don't forget Uncle Sam. Remember, he's like your uncle, not your father, so he's more likely to offer you advice than a handout. The Small Business Administration's Web site (www.sba.gov) is full of suggestions and opportunities, including advice on how to do business with what is a fast-growing enterprise -- the U.S. government. The Internal Revenue Service may not be your friend, but it will be your partner. Check out its "Tax Information for Businesses" section at www.irs.gov. You'll also find other government resources at the portal FirstGov.gov.

Starting or even joining a small business can be a daunting experience, fraught with anxiety and the fear of failure. Trust me, I've been there.

Indeed, along with all the benefits and advantages, there are risks associated with going it alone or setting up shop with a small group of fellow entrepreneurs. But there are risks associated with any type of employment, including going to work for a big corporation. Job security -- once nearly guaranteed by big employers, is a thing of the past. Just about all companies have resorted to layoffs, including IBM and Hewlett-Packard, both of which usually avoided issuing pink slips in the past.

While I can't provide you with a clear road map for success, I have compiled a set of rules, or should I call them "suggestions" that might help you get in the right frame of mind. I saved the most important one for last: Be passionate and have fun.

Larry's Rules for Entrepreneurs:

Don't take it personally when things are rough but -- just as important -- don't let it go to your head when they are good. Ego and expectations that the good times will last forever have been the downfall of many an entrepreneur.

Be careful how you treat people on the way up. You might meet them on the way down.

We live in a world where power and authority is fleeting and subject to change. Don't fight it -- learn to live with it. Today's boss could be tomorrow's sub-contractor. Keep those lines open. Make friends and keep them. They will work wonders for you.

Network for new contacts, but cherish your old ones. Keep in touch with buddies from college and even high school.

Seek advice, but make your own decisions. If it doesn't feel right, don't do it, regardless of what "experts" tell you.

Learn to do things on your own. Try not to rely on others for all the essentials of running your business. Even when you can afford help, don't think you're too important to do your own typing, ship your own packages, answer your own phone and clean up your own mess.

When you meet new people, make the relationship a two-way street. Never take without giving something, even if it's just a handshake and a sincere "thank you." Figure a way to introduce yourself in 10 seconds. Follow up with an e-mail.

Be impulsive, but always wait at least a day before acting on an impulse.

Avoid wasting money on fluff. Expensive office space or furniture may look nice, but it's not nearly as impressive as being able to keep your business afloat.

Live well but modestly, even during times of success. Silicon Valley is populated with people with car payments and mortgages that they can no longer afford. One way to keep the repo man away from your BMW is by buying a Toyota instead.

Be flexible and willing to scale up or down. Keep your costs under control. It's amazing how small companies can throw away enormous resources with little return.

Do your own public relations and marketing, or have it done by someone whom you trust and who knows what he's doing. Don't get ripped off.

Never here a CEO unless that person is as passionate as you are. And don't take his or her word for it. Check out the person carefully to make sure his or her past isn't littered with failures.

Take care of yourself. Buy a good chair, wear a telephone headset, get plenty of exercise, and eat well. Make sure you have solitude to think creatively. A walk, a swim, a weight-lifting session, yoga meditation or a bike ride may yield more benefits than the best consultants in the world.

Stay business-like, but remember to be passionate and playful. Have fun.

A syndicated technology columnist for nearly two decades, Larry Magid serves as on air Technology Analyst for CBS Radio News. His technology reports can be heard several times a week on the CBS Radio Network. Magid is the author of several books including "The Little PC Book."

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