Tom Blondi has been involved with several start-up companies, and he's learned there are two essential ingredients every successful venture needs.
First, someone needs to come up with a good idea. Second, the founder needs to hear negative feedback about that idea. In fact, the negative feedback may be the more important element in the formula for success.
You'll need a mentor, not a fan
Very few of us can create the perfect idea without feedback, Blondi told a breakout session at the Spark 2008 IT Invitational this fall. If you've got a great idea and you present it to someone, and they immediately like it with no reservations -- it's not a good idea.
Entrepreneurs need people who will ask tough, specific questions about how the business will function. Friends and relatives generally are not the best people to act as a sounding board for the company's founder.
But hearing something other than brilliant or you'll make a fortune can be tough for a prospective entrepreneur. People who want to start companies and are willing to risk the time and effort on a startup are often personally attached to their idea and their vision for the business.
It takes a dialogue with a real live human being who is willing to write a check before you know you're getting the right kind of feedback, he said. To truly consider yourself an entrepreneur, Blondi said, you need someone to invest in your idea.
Blondi said he used to feel the sting when he heard his ideas questioned. I thought the person was in some way jealous of me, he said. Later I realized this was just constructive criticism.
The best person to mentor an entrepreneur through that start-up process is someone who has a track record of success and failure, he said. Knowing what works is important. First-hand experience with what doesn't work is just as important.
An entrepreneur's trail
Blondi has experienced both since he began running start-up companies 18 years ago. His first venture was a hit -- Language Management International in Colorado. The company took software programs designed in the United States and engineered them to run on machines in Japan, Europe and Latin America. It was successful early on and Blondi and the other investors sold it to Berlitz.
After that, I knew everything, Blondi said. That is, until his next venture.
Blondi became chief marketing officer for Cyclone Commerce, a Scottsdale-based software company that allowed businesses to securely send documents over the web. Previously companies were forced to fax or use overnight delivery services to transmit invoices and other documents to business partners. It was a great concept that never really achieved the growth the management team envisioned, he said.
We were never really able to differentiate our product from others, Blondi said. The company struggled but the investors found a happy exit strategy. The company was acquired by Axway, now a subsidiary of the French-based Sopra Group.
Since then, Blondi has been involved in several companies -- often brought in to run the company or to train the next CEO.
He is currently the CEO of Ethix Media, which has a product called Homeminders. Homeminders is a web-based software that lets a home owner track routine maintenance, such as changing the filters on the heating/cooling systems, and inventory possessions. The user is a homeowner, but the customer usually is large company that sponsors the software and gives the software away as a branding tool.
Blondi said he likes opportunities where he can build something. I am looking for a long-term engagement, not a month-long project, he said.
But he's not looking for a permanent position. Blondi is already putting his next venture, a Scandinavian-designed application designed to help small and mid-sized companies diagnose their online security vulnerabilities. He is an investor in this venture as well as the CEO.
Are you the type?
Blondi didn't start out to become an entrepreneur. He graduated from Southern Illinois University with a degree in mathematics and physics. His first job out of college was working as a computer programmer for Sears.
Yes, back then we actually wrote code as opposed to entering it, he quipped. I wasn't very good at that, and I'm not joking.
My boss at the time said, 'You actually talk better than you code.'
So Blondi was given a position where he could talk -- and taken away from programming computers. He functioned as a liaison with non-technical users. He listened, and conversed with them in plain English, and then told the programmers what the users needed. That position launched his career in the software business.
Today, young people show more interest in start-ups and other smaller ventures compared with the 1970s, Blondi said. But large organizations, which are not considered as secure as they once were, have certain advantages.
Those companies have been around for 100 years, and they really have training down, he said. You could learn as much in two years there as you could in 10 years somewhere else.
Entrepreneurship has become more glamorous in the past 20-30 years. But, you only hear about the success stories, Blondi said. They only tell you the good stuff. There's a lot of pain and suffering in being an entrepreneur.
The job entails great dedication and a great deal of stress. Many ventures simply don't survive. In 2006, the Small Business Administration estimated there 671,800 firms started and 544,800 were terminated. Not all those failed. Some were sold to other businesses. But long-term success is elusive.
And there is nothing quite like having to call a friend or a relative who invested in a venture where you lost their money because of decisions you made, Blondi said.
Before starting down the road, prospective should ask themselves tough questions.
Am I cut out to be an entrepreneur? Is it something I really want to do? he said. It's OK if you don't want to be an entrepreneur.
We talk about non-entrepreneurs like it's a bad thing, he said, but not everyone who is creative and successful in business is an entrepreneur. Investor Warren Buffett, who tops the Forbes list of the richest people in the world, is generally not considered to be an entrepreneur.
It's also important to remember that the company founder is not the only player in the start-up drama. In fact, the idea generators are usually in the minority in a start up. The other 80 percent need to be people who excel at the execution, Blondi said.
Often, company founders take an egocentric approach to running a start-up venture, but it's not the best approach. I've found building consensus sometimes seems to slow the process, Blondi said. But in the end, it makes things easier. You need that buy-in.
- It's critical for entrepreneurs to get feedback in order to refine their ideas for a start-up business. Few can come up with ideas that don't need sharpening to succeed.
- A career as an entrepreneur is not for everyone. A high percentage of start-up ventures fail each year. It's an intense, demanding occupation. Anyone considering starting a company should decide if this fits their personality.
- Entrepreneurs rely on others to make the dreams for their successful companies come true. The extra time it takes to build consensus will often pay off.