Editor’s Note: This post was originally published on Seattle 2.0, and imported to GeekWire as part of our acquisition of Seattle 2.0 and its archival content. For more background, see this post.
By Lewis Lin
The Startup Game is a wonderful book about entrepreneurship and the venture capital industry. The author, William Draper III, started several venture capital firms including Sutter Hill Ventures, one of the top venture capital firms in the country.
Draper is part of a long line of successful venture capitalists. His father started Draper, Gaither and Anderson, and his son started Draper Fisher Jurveston.
The author discusses the creation and evolution of the venture capital industry. Throughout the book, Draper peppers in personal anecdotes. My favorite section is called “What It Takes,” which discusses traits of top entrepreneurs. Here are my top takeaways from the book:
- The pitch. You have to sell the leader and your team. You have to give investors’ confidence that you can beat the odds and pull it off.
- Team matters. The weakest link can bring everyone down. If there is a weak link, the company should take action sooner rather than later. There are no strong companies with weak management.
- Entrepreneurial traits. Successful entrepreneurs share the following traits: brains/education, energy/passion, expertise, vision, integrity, and sense of humor.
- Increasing your odds of success. Entrepreneurs with the lowest risk of failure know their field intimately, run another company similar to the one they plan to launch, and/or have an idea that will drive an industry breakthrough.
- Don’t forget about product differentiation. It’s not acceptable to tell investors, customers, and prospective employees that there is nothing new under the sun.
- Passion matters. Be yourself, and your pitch needs to come from your heart.
- Market size. You can either be one of many companies playing in a big market. Or you can own it all in a small market.
Draper also created a nice top ten list around the “Top 10 mistakes of entrepreneurs.” I’ve recounted that list below.
Top 10 mistakes of entrepreneurs
- Creating optimistic projections about market size and customer acquisitions.
- Underestimating timelines.
- Trying to do everything yourself.
- Failing to master the pitch.
- Not downsizing when necessary.
- Being inflexible.
- Not developing a clear marketing plan.
- Building a board that consists only of friends.
- Not taking action during a recession.
- Not knowing the right way to approach venture capitalists. Be prepared. Be clear about the problem that your company proposes to solve and who your customers will be.
