When I walked into the “Bringing Your Idea to Reality: Funding and Realizing your “Aha” Moment” panel, I expected to hear a series of inspirational speeches about how once you have this amazing idea, there are a few specific steps to follow and you will be well on your way to starting a successful company. But in reality, the panel was a set of lessons based on the experiences of three successful entrepreneurs: Alison Gerlach, Sacha Ross, and Tim Novikoff. The three main themes of the panel were: 1) that there is no single “aha” moment, but it is actually an “aha” process; 2) Delay taking other people’s money for as long as possible and do as much as you can on your own; and 3) know when to cut your losses and move onto the next venture. Here is what I learned:
Lesson 1: There is no single “Aha” Moment.
The “Aha” Moment is a process, not just single moment where an idea comes together. Every decision is like an “Aha” Moment, and as Mr. Novikoff said: “An “Aha” Moment is realizing what to do and when, how, and why to do it”. This idea emphasizes the importance of every decision made during the entrepreneurial process. Additionally, it goes to show how an idea is not an opportunity without proper execution. Finally, as Ms. Gerlach stated, sometimes an “Aha” moment is not what you’d expect. She believes “The best business decisions I ever made were the ones I didn’t take.” These decisions were “Aha” Moments of their own.
Lesson 2: Other people’s money is expensive, so delay getting money as long as possible.
A consensus amount the panelists was to do as much as you can before getting money. Mr. Novikoff was the first to bring up the idea when he explained how he just started building his company and then realized something was working, so he kept going on his own until he had to raise money in order to grow. He pointed out Walt Disney’s quote: “Great things happen when you stop talking.” Ms. Gerlach agreed and explained how funding should be used to address a specific growth opportunity, not just to meet payroll. Mr. Ross focused on how expensive other people’s money is. Giving away parts of your business hurts, and shouldn’t be done without careful consideration. While everyone agreed with this idea, they also emphasized the importance of not getting greedy. It is much better to have a small piece of a massive pie, than a large piece of a tiny pie. It is important not to get caught up on a few percentage points of equity. The final point they brought was about control. While giving away regular equity is ok, it is important to keep control of your company, and as Mr. Ross said, there are ways to structure deals so you can maintain majority control with minority ownership.
Lesson 3: Know when to cut your losses.
Creating a company usually starts as a work of passion. This passion is extremely powerful and it helps carry entrepreneurs through the most difficult phases of their work. Additionally, if you are no longer passionate about your work, it may be time to go back and start working for “the man”. But, while passion is important, it is necessary to divorce the passion when making the most difficult decisions. Throughout an entrepreneurial venture, you must keep in mind that your business cannot continue if you are not making money and the time will (probably) come when you need to call it quits. At this point, you must be able to look objectively at your situation and realize the time is now. Leave the passion behind and make the correct decision.
The panel give me lots of insight into entrepreneurial world, but Ms. Gerlach’s final words really stuck with me. She said, “I have no right and wrong answers to give you, just experiences. You are the expert in your company and you must find the final answer.” These words are extremely important for entrepreneurs to keep in mind as we toil to accomplish our goals. We are the experts in our business.