The Beermat Entrepreneur
What You Need to Know to Turn a Good Idea into a Great Business

(Washington, DC) -- September 18, 2002) Starting a business may be easier than you think. According to Mike Southon and Chris West, all you need is a beermat.

Well, maybe you’ll need a little more than that later, but to get started on the right track you’ll need the beermat, and on it write just three things: your elevator pitch, the name of a mentor, and the name of your first customer.

Piece o’ cake, huh? Or, in Britain, a piece of crumpet. Britain is where they call a coaster a “beermat,” and where Southon and West are from. They crossed the pond to appear at this evening’s Netpreneur Coffee & DoughNets event, giving the audience ideas from their new book, drawn from their experience as serial entrepreneurs.

In The Beermat Entrepreneur: What You Really Need to Know to Turn a Good Idea into a Great Business, already a best-seller in the UK and soon to be released in the US, the authors take entrepreneurs through the crucial stages of starting a business, from what they call “sapling” to “mighty oak,” including the major hurdles along the way. They covered some of that ground in tonight’s presentation, but particularly on the beermat needs of elevator pitch, mentor, and customer.

What is an “elevator pitch” and why is it so important? It’s a quick, concise statement that clearly expresses what your business idea is about. Too often, however, the problem is that when you ask an entrepreneur for theirs, as Southon explained, “They start telling us and, 10 minutes later, they're still telling us. Twenty minutes, and it goes on and on and on.” He said that the idea of an elevator pitch is that, “You get into an elevator with Bill Gates. His flunkies press 7. You've got 20 seconds to pitch him. All you're trying to earn with your elevator pitch is another 15 minutes with his people.”

A good elevator pitch has just two sentences: the premise and the endorsement. “The premise is what you do,” West said, “what's special about your company, why people are going to come to you rather than somebody else. In one sentence, what you are delivering?” And the endorsement? “The proof that follows. You say you're going to do that? Well, show me some sign that you're serious.”

Mentorship is a clearer concept for entrepreneurs, but one that requires just as much work to arrive at. Mentors open doors, provide the benefit of their experience, and offer a sounding board for things like your elevator pitch. For Southon and West they are essential to success, and although it can be difficult to find a good one, “You have no excuse for not getting a mentor,” urged Southon. “You're all educated people. If you're good enough to get into the Hilton and not be thrown out, then you can find a mentor.”

 “A lot of very good mentors come from big corporations,” advised West. “Very often your potential customers are going to be big companies, so somebody who moves in that environment will be more likely to open the doors for you. If you have an entrepreneur mate who is a mentor, you sit around discussing ideas all evening. That's not what the mentor is there for.”

The last thing you’ll need—on your beermat at least—is the name of your first customer. Not only does that help you focus on what you’re really selling, to what kind of buyer, and what their need is, it gets you thinking about sales and revenue from day one. In the post-dotcom days, revenue is much more important than venture capital, and revenue means sales. In fact, one of the first things to do after the beermat phase is to get a sales “cornerstone” for the organization.

Cornerstones are the first few founding partners for the new business, including the entrepreneur. They have proven strength in an essential skill area, such as sales, technology, finance, or research, and they should have a significant share of the business—20% each for five cornerstones, Southon and West advise, to keep the decision structure equal. You don’t need all five cornerstones at the start, but a sales cornerstone should be one of the first, especially if the entrepreneur is not an experienced salesperson himself.

“It's your idea. You're enthusiastic about it, you want to tell people about it. Fantastic,” said Southon, a former salesperson himself, “Now get out of the room and let the salesman close it, because the other thing that entrepreneurs can't do is qualify. You'll tell your idea to anybody whether they've got money or not, let's be honest. You want a salesperson who qualifies people, finds their needs, gets you in to wave your arms about, gets you out, asks for the money, and closes.”

Southon and West went on to talk about other issues in growing a business, including who to hire after the cornerstones, why you should avoid venture capitalists, the difference between bad angels and good ones, and their concluding message, which was demonstrated in costume by Southon’s alter ego, Mike Fab-Gere.

The somewhat geeky Southon always wanted to be a rock star. Having done very well in his career, especially from proceeds of the sale of his first company, he developed the Mike Fab-Gere persona, a kitschy 1970s disco star, replete with three-foot afro, velveteen bell bottoms, and Elton John sunglasses. Southon lives his rock-and-roll dreams as Fab-Gere in a band that plays around Europe and includes Deep Purple and Wishbone Ash members. He donned the wig, shades, and fake mustache to make his final point.

“Have as much fun as you can. If you're not having fun, what on earth are you doing? What's more fun than starting up a business with cool people doing neat stuff?” And part two of that message? “Spread some good karma. It's about happy employees and happy customers. What better karma is there? Have as much fun as you can and spread some good karma.”

Copyright 2002, Morino Institute. All rights reserved.