the beermat entrepreneur

You can’t write much on a beermat (or on a coaster, as we call them in America), and that’s what makes it a useful tool to help startups focus on their most important early challenges. In fact, according to Mike Southon and Chris West, authors of “The Beermat Entrepreneur,” there are only three things you need to write on one in order to begin testing your idea: an elevator pitch, the name of a mentor, and the name of your first customer. Subtitled “What You Really Need to Know to Turn a Good Idea into a Great Business,” the book’s directness in cutting through both conventional and arcane wisdom has made it a bestseller in Britain. At this Netpreneur Coffee & DoughNets event held September 18, 2002, the authors discussed getting to the root of a venture and how to grow it from sapling to mighty oak.

Welcome to “Coffee & DoughNets Goes Late Night.” I'm Mary MacPherson, Executive Director of Netpreneur. We'd like to thank you for joining us. We've got a fun and informative program for you this evening. I see some of the props back here, so it may be a little more fun than even I had expected.

          First a couple of quick items from our AdMarketing community. There was recently a discussion on what happens when entrepreneurs go out on their own, and, as a result of that conversation, a number of resources and pointers for Going Solo were collected that anyone contemplating that route will find useful. Also, the List of Reporters & Media Contacts maintained on our site by Wills & Associates has recently been updated. There you can find the names and contact information for journalists who cover the technology sector both locally and nationally.

          When we were first introduced to the Beermat Entrepreneurs, we didn't really know what a beermat was. We did some research and quickly figured it out. We also figured out that beermats don't really work in the morning for Coffee & DoughNets, so we thought that we would do something in the evening.

          We were introduced to Mike Southon and his co-author Chris West by our friends at Morgan, Lewis & Bockius. Dean Rutley and David Harvey had been doing some legal work in London and kept hearing about these Beermat Entrepreneur guys every time they turned around. They went out to meet them, and that is how they arrived here tonight.

          How many of you have half-read business books at home or in the office? The Beermat Entrepreneur is one book that you actually are very likely to finish. We're not here to shill the book, through. It isn't even published in the United States yet. For us, it’s only available right now through Amazon.com UK. That's why these guys are here today. Mike's experiences as a serial entrepreneur translate just fine across the pond, and there were three things we learned as we got to know them that made us think that they had something to offer the Netpreneur community. First, they're talking to aspiring entrepreneurs about what happens at the earliest stages of this process. Second, you'll leave with practical experience which we think you'll be able to use right away. That is always one of our goals when we put these programs together. Third, we found that some of the stories about what goes wrong provide more valuable lessons than what goes right.

          Finally, these guys are not only good, they're very funny. There's this disco theme going on here that I don't quite understand. You see the lava lamps. Apparently Mike has this alter ego that is a '60's rock star named Mike Fab-Gere. Only some of us remember the '60s, so we'll see how it hits.

          Before we get started, I would like to thank our volunteers today, Harish Bhatt of SingleSignOn.Net, Dorothy Camer of Car Free Mobility, and Fred Kelly of HiTek Solutions. Thank you so much for helping to pull this event together. I would also like to thank the Netpreneur team, this time with special thanks to Ben Martin and Fran Witzel who worked with our speakers, and to Lin Plummer, Ann Slaski, and Neil Oatley who make it all happen. Thanks to Mario Morino as well, who is here with us tonight.

          Without further ado, let me introduce Mike and Chris.

Mr. Southon: So, are you all entrepreneurs? Yes? Hands up for the entrepreneurs here. Excellent. Did you read USA Today today? Well, I'll read you the best bits. It says "Entrepreneurial Spirit Suffering." It says, "For the first time in more than 50 years, entrepreneurs are failing to lead the United States out of recession, government data suggests."

          Are we going to let that happen? I thought not.

          Well, we're from Great Britain, as you can probably tell from our accents, and I actually bring a personal message from Her Majesty the Queen. She does understand you are upset about the tea thing and she's willing to talk to you about it. She's not too late, is she? Actually, I've got a more serious one which is about weapons of mass destruction. This is from Tony Blair, our Prime Minister. He is willing to withdraw unilaterally Sarah Ferguson from the Weight Watchers program if you will withdraw Jerry Springer from our television sets. Okay? Is that a deal? Although, do remember, this is not a sign of weakness by Her Majesty's government. We invented the Spice Girls and we can do it again.

          Getting on to the subject matter, we're so chuffed—as we say in England—so delighted to be here back in the States again. I've been coming here for about 20 years. I lived in Boston for a year and a half and I always had a fantastic time here. This is our first big gig in the USA, so I hope you're not going to be too hard on us. We're obviously here to plug our book, but, since it's not actually available in the US, it's a limited thing.

          How is it that we British people can tell you Americans anything about entrepreneurship? Oh, dear. Tough audience. It's going to be a bit like the Beatles standing up at Shea Stadium and playing Chuck Berry tunes for the Americans. But there is one thing we British do better than you Americans, and I'll explain what that is.

          How many people have been to Britain? A good number of people. If you come to London, what is the most important place you must visit? The pub. You've got it. If there's one thing we British are better at than you Americans, it's going down the pub. If we're entrepreneurs in the UK, what we do when we go down the pub is we get out a beermat. This is a beermat. I think you call it a coaster. This one is sponsored by our sponsors, Morgan, Lewis & Bockius, who very kindly have flown us over here to speak to you, do some things with Netpreneur, provide beermats, and so on. A big hand for Morgan Lewis. They're actually nice lawyers, which is a bit of an oxymoron. Rather like “mature students” or “British cuisine.”

          Anyway, entrepreneurship. I'll take you down the pub. We're now back in 1983. I can tell you what happened to me, and, hopefully, there are some things here which will be of use to you. It's 1983 and I'm sitting in a pub called the Lyric Tavern in London in Great Windmill Street. I'm buying drinks because I'm really happy to have just gotten a big commission check. At the time I was working for a recruitment company that used to put people in the computer field, but they also did training, bizarrely, and they used to do training in the Unix operating system. I used to sell this stuff and I was really good at it. I used to do it like this. I used to say, “Hello, would you like training in the Unix operating system and in the C programming language? You would like 20?” Oh, what a great salesman I was. Big commission check. I was buying drinks for the poor guy that was actually going to give the courses, a technical guy, one of the original Unix wizards. He was a former computer science lecturer, and he was a bit grumpy, but I was buying him beers, so it wasn't too bad.

          There was a third guy there, the person who was the original beermat entrepreneur, a gentleman named Peter Griffiths. He had several degrees in economics and computer science and whatever. He lectured in Unix and C, but his comment was, “Why are we working for these morons? Why don't we start our own company?” We got out a beermat and started writing on it. We got some ideas down and, a month later, we had our own company. There were three of us in a basement. That first morning I sold ₤20,000—about $30,000—worth of training to Phillips in Sweden. We got the money up front, then we wrote the course. Five years later, there were 150 of us here in the US and in the UK. We opened up an office in Boston, then we got the proverbial offer you can't refuse—not from the Mafia—but from somebody similar, Cap Gemini, a large service organization. They just waved money at us and we said, “Oh, great, money.” We sold our company, and then I had a very interesting experience. We had to get all of our staff, as many as we could find, into a room above a pub again. We said, “There's going to be a big announcement, here it is: We've just sold our company to this guy, Jeff Unwin, CEO of Cap Gemini.”

          There was a gasp. It was like announcing a bereavement. Although we explained intellectually why we did it and that it was a great thing—10 years later everybody agrees it was a great acquisition for both sides—it was a bereavement at the time. We had killed our company. A week later I would have given the money back. You probably think I'm making this bit up, but I would have done it because I felt guilty. Not about the money, but about the fact that we killed the company. Anyway, I had to do it. I couldn't just take the money and run, so I did two more years. Then I did some crazy stuff. I started getting calls from all my old friends saying, “Can you help me with my startups?” I thought, sure.

          Since then, I've done eight or nine startups. I've lost count. Some were helping a friend out for six months with a bit of sales, because that's what I do. Others were very serious. There were two public companies, one you might have heard of, Micromuse, and RiverSoft. I saw everything, good and bad, about startups. All the while I've been lecturing at City University Business School to the MBA students there, and I've been telling them all these stories about startups. The older MBAs, people like yourselves who have been around the block a few times, said, “That's the truth. You don't read that in the textbooks.” I thought, “Great, I'll write a book.”

          Here's my first top tip of the day: If you want to write a book, get a writer. Fortunately for me, my best friend at school was Mr. Chris West. Chris West is a writer. He writes novels; he writes travel books; he writes counseling books. All sorts of good stuff. I asked Chris, “Chris, is there a book in all of this?”

Mr. West: Yes. And here it is, The Beermat Entrepreneur. It's not available in the States at the moment, but it will be. What's been fun about this book is that since it came out, we've been in the Amazon.com charts in the UK and we've had loads of emails from lots and lots and lots of entrepreneurs. We always reply to them, and we try to meet as many as we can. We've now been six months listening to people, talking to them, hearing their stories, hearing their problems, and trying to help out wherever we can. Based on the book and on what we've heard from the people we've talked to, we have constructed a model which we think is very useful for entrepreneurs at any stage in their business. This is what we're going to present today.

Mr. Southon: The book is not my life story, which would have been sort of interesting maybe to me and my mother. It's all my weird experiences over the years distilled down into what Chris said, a methodology for testing ideas—from the good idea in the pub, step by step, all the way through to world domination, which is sort of a good thing in business terms. Or, if it's a bad idea, we find out early and we go back to the pub, get another beermat, and start writing again. If there's one thing that characterizes you entrepreneurs it’s that you've got loads of ideas, haven't you? In fact, while you've been sitting here, you've been thinking of three more business ideas. There are plenty of ideas out there. The question is, which ones are going to succeed? Hopefully, the book will give you a methodology for testing them, bit by bit by bit. We're going to go through that. Let's start with entrepreneurs.

          You're all entrepreneurs, yes? Pretty well. Great. Now, when we refer to entrepreneurs this evening, we are talking about other entrepreneurs, not you people here who are clearly saintly and have no foibles at all.

          Well, let's talk about entrepreneurs. What are entrepreneurs like? Full of good ideas? Agree with that? Ambitious? Yeah. Confident? Charismatic? A bit like me, really—good-looking, intelligent, virile, all that kind of good stuff. Entrepreneurs are fantastic, aren't they, Chris?

Mr. West: Sort of. Entrepreneurs can be arrogant, manipulative, and they never finish anything. You've probably been in a bar or a pub with an entrepreneur. They've had seven brilliant ideas while you were going up and getting the drinks. A big problem with entrepreneurs is that they cannot focus. “Great idea, let's do this!” The next morning they appear in the office, “I've got an even better idea.” At lunchtime: “No, no, we'll do this instead. We'll do the original one, actually. We'll do it slightly different.” Et cetera, et cetera, on and on it goes.

          What do you do? This is a big problem. You've got good sides to entrepreneurs and bad sides. You can't have one without the other because we're talking about human beings here, not saints. If people are confident, they're going to be arrogant sometimes. If people have bright ideas, they're going to have lots of bright ideas. If people are charismatic—and it's very important to be charismatic—they're going to manipulate people. These are counterproductive things. So, here's a problem to start off with. In the entrepreneurs we meet, we see this again and again and again. What is the solution?

Mr. Southon: Yes. And, again, we're talking about other entrepreneurs, not you people who have no problem with focus or arrogance, do you? No. Hopefully you'll have a look through the book one day and you'll see the bit on entrepreneurs, and you'll say, “Yeah, that's me in there.” There's a good side and perhaps a bad side as well, a yin and a yang, both sides of it, and both are vital for the entrepreneur. An entrepreneur who doesn't realize this is going to get into trouble.

          What the entrepreneur must realize, and this is our first real tip for you today, is that you need to surround yourself with the right team. These are very particular people that we call “cornerstones,” individuals who have just as much enthusiasm about the idea as the entrepreneurs have. They're just as keen to see it a huge success, and they have a specific technical skill which adds value to the whole proceedings. For example, my background is sales. I'm actually not an entrepreneur; I'm not a builder. I work with entrepreneurs. I'm a sales cornerstone. Somebody will have a great idea and I'll say, “That sounds great, let me go and talk to a customer and get some money out of them.” That's what I do. I qualify accounts. I bring in money. That's what salespeople do.

          One of the most important cornerstones you need early on is the sales cornerstone. In fact, when we speak to entrepreneurs, the biggest lack we see out there is sales cornerstones. Think about your organization—we'll come to actual sales a bit later—but think: Do you have a sales cornerstone in your organization?

          There are other cornerstones. There are delivery cornerstones, finance cornerstones, maybe research cornerstones. Cornerstones are vital people. They're the people you don't read about in the other entrepreneurship books. A lot of books talk about how fantastic entrepreneurs are, Richard Branson and people like that. He's a British guy, so I'll mention him. There are no cornerstones mentioned in them, or hardly at all. They are just as important.

          We have a model of five people, one entrepreneur and four cornerstones. Five is a magic number for us, and I'll explain why.

          You don't need all the cornerstones from day one. Maybe there are two or three of you in the pub, but, eventually, you'll have one entrepreneur and four cornerstones. One person on their own, a lone entrepreneur, will probably fail because he or she doesn't have any backup. Two people have a dynamic like a marriage, and marriages can go, well, badly. Sometimes people actually are married as well, which is a bit scary. Two people are like a marriage—you can fall out, it can be like a divorce, and it can be very painful. Three people are a marriage and an outsider, as you might have heard my friend the Princess of Wales once say. Four people are two marriages. Five people are a critical mass. What we found at my company was that there was the original beermat entrepreneur, Pete, who was the visionary entrepreneur; there was Mike Fanahan, the technical guy; I was the sales guy; we had a fourth technical guy, a different kind of technical guy; and a finance cornerstone, who was actually Pete's brother. There were five of us.

          Now, if you walked into my company, The Instruction Set, after about six months, you would have thought, “Pete and Dave are the two brothers, they probably own the company because they're making all the decisions around here while Mike is off selling and the technical guys are off doing technical stuff.” Yeah, day-to-day they owned the company, but, relatively, they only had 20% each. When we came to meetings in which we talked about the really serious stuff beyond the color of the photocopier, the really strategic stuff, we each had an equal say. No one person could bully the others.

          When we go back to the entrepreneurs—not you, the other entrepreneurs we've met who are arrogant, manipulative bullies, like Pete was a little bit—they can bully everybody else if they've got 80% of the company. They can come back from the pub saying, “Oh, software? Forget it. It's now this technology. That's what we're doing because I met a bloke in a pub and I'm right, of course. I'm right because I own 80%. If you don't like it, you're fired.” This is what we're trying to avoid. Share out the ownership and get the cornerstones you need—sales cornerstones, finance cornerstones. Without them, the entrepreneur will fail.

          Do you agree with that?

Mr. West: Absolutely. Absolutely.

Mr. Southon: Let's step back. You've got a great idea, you've got maybe one or two cornerstones from day one, maybe a salesperson and a delivery person. You’d better get down to the pub, yes? So, here we are in the mythical pub and you're sitting there writing on your beermats. What are you going to write? Essentially, here's your beermat on the front cover of the book, which will be available in the States sometime. It’s the three things you need to write on your beermat.

          First of all, Chris, it’s the elevator pitch.

Mr. West: The elevator pitch. We would have to explain this in England because we have to start off with telling people what an elevator is.

Mr. Southon: A lift, actually.

Mr. West: We don't have elevators, we have “lifts.”

          What is the elevator pitch of your business? What's the point of it? What's your differentiator? That sounds easy. When we meet entrepreneurs, we ask them, “What is your elevator pitch?” They start telling us and, 10 minutes later, they're still telling us. Twenty minutes, and it goes on and on and on.

          No.

          The elevator pitch we want to hear is one that has two sentences in it: the premise and the endorsement. The premise is what you do, 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. It's the vision that drives the company through, and it's going to be the vision that you give to the staff. It's the vision that the cornerstones are going to say yes to: “I want to work with this guy because that's what I want to do.” It's got to be distilled down. We hear so often people go on and on: “We've got this and we've got that, and we're going to do this and all that.” People have lost interest by that time.

          One sentence, the premise. Then the endorsement, which is the proof that follows. You say you're going to do that? Well, show me some sign that you're serious. It could be someone senior in a big company who has taken an interest in you; you've done a deal with somebody, some kind of proof. A premise and endorsement, that’s the elevator pitch, the beermat elevator pitch.

Mr. Southon: This is great pub work, distilling your idea into literally two sentences only. I've heard some elevator pitches that went on so long I lost the will to live. Remember what the idea of an elevator pitch is. You get into an elevator with Bill Gates and his flunkies press “7.” You've got 20 seconds to pitch him with two sentences. All you're trying to earn with your elevator pitch is another 15 minutes with his people. You're not telling him every feature of your product. The main benefit is some kind of proof. He probably still thinks you're mad, but you've got some sort of collateral that goes with it, something that opens the door for you. Don't assume that the lift will get stuck for you after five floors so you can explain it to him for two hours. Two sentences, and really interesting.

          That's the first thing. The second thing it says here on the book is “mentor.” We all know what a mentor is. If you don't have a mentor in your business, go and find one. I'll tell you a little bit of some mentoring stories from the UK. I'll tell you a general one, then I'll tell you about my personal one.

          I think we all understand the need for a mentor, a senior person who gets your idea, likes you, you like them, who offers you sensible advice, and opens doors for you. An excellent person to have on board. Maybe they'll become your non-executive chairman, as we say in the UK, somebody who adds value to your advisory board. There's an organization in the UK called The Prince's Trust. This is a charity which was started by Prince Charles. I don't know much about Prince Charles, but he's a charming man and he's waiting for his mother to die because then he gets to be King. It may be some time, judging from his grandmother; it could be another 30 years. So, what does he do all day long? I'm sure he does the normal thing that royalty does—we won't go there—but 26 years ago he started a thing called The Prince's Trust. The idea behind The Prince's Trust is that if you're someone between 14 and 30 and you've been turned down everywhere else, you can potentially get a loan of about $5,000 from The Prince's Trust. They are on the side of “give them the money.” I've been there because I did some work with them. In fact, the book in the UK gives a royalty to The Prince's Trust from every copy.

          What The Prince's Trust says is that if you're successful in your application, before you get your money, let's sort you off a mentor, somebody like myself, a gray-haired guy with a bit of experience. I've got this fantastic guy that I'm working with. He's called my “client.” I'm his mentor, he's my client. He's a cartoonist. He could be sitting here and would dream up caricatures of everybody. How much talent has this guy got? I wish I could do it. You see his stuff and you think, “Cool. That's really good.” He does celebrities, he does everything.

          He was turned down everywhere.

          The only advice I gave him was not rocket science. It was not how to split the atom or invent a drug that cures cancer. It was, “You're really good, keep going. Let me do a little bit of email, send one of your caricatures out to somebody.” We did an event for Morgan Lewis in London. He sat there doing caricatures and people loved it. It's all motivational stuff.

          The Prince's Trust has a very, very interesting statistic. They see how many of their businesses are still going after three years. Now, the banks in the UK—and we all love banks, don't we?—they cherry pick the people they want to lend money to, then they take your house away if they don't like you. Good old banks. They reckon that 40% of their businesses are still going after three years, which is not bad. Startup businesses are a risky environment. At The Prince's Trust, 60% are still going in three years. These are people, remember, who have been turned down everywhere. Yes, good job.

          We're keen on The Prince's Trust because mentoring works and it will work for all of your businesses. If you don't have a mentor, get one immediately. Remember, this is your first sales call, finding a senior person who likes you and you like them—a key part of a sale—someone likes your idea and wants to give you a chance, wants to get involved, thinks it's fun. He's not looking at you thinking, “I'm going to make millions out of this person.” He’s just thinking, “I would like to help somebody, and yes, that's nice. I don't have to do it everyday, I could give some good advice and be really, really useful.”

          I'll tell you the story of my mentor. He is a saintly gentleman that if you every come to London, I hope you get to meet. He's a chap called Sir Campbell Fraser and he's 79 years old. He's a retired man. He's been Chairman of the Dunlop tire company, Scottish television, and Tandem, the computer people. He's been around. He's been there and done it.

          I met him when I went to work for startup RiverSoft. When I joined RiverSoft there were eight programmers and me, so I was number nine, head of sales. I arrived on the first day and there was a silver-haired gentlemen who sat at the boardroom table. I thought, “It's somebody's dad.”

          “Would you like a cup of tea?,” I asked.

          He said, “Aye, I'll have a cup of tea, laddy.”

          He was from Scotland, so, if my accent wanders around from the Atlantic down towards South Africa, you'll understand. So he says, “Aye, laddy, who are you?”

          I said, “I'm Mike. I'm in charge of sales, Sir Campbell.”

          He said, “Aye, I'm the Chairman. What is it we sell here?”

          I said, “It is a complex IP network management product which drills down through the . . .”

          “Stop.”

          He said, “Stop. Explain it to me again, laddy, this time so I understand it.”

          So, I spent like four months explaining it to him. Actually, explaining it to myself, to be honest. Eventually, I managed to explain it in two sentences. It was a product that found faults in networks automatically.

          “Good God, laddy, who would buy such a thing?”

          I said, “Oh a telco.”

          “What's a telco, laddy?”

          “A telecommunications company, Sir Campbell.”

          “Like British Telecom, do you think?”

          “Exactly. Yeah, yeah, you've got it.”

          “Wait there, laddy.” He dialed the phone. “Hello, British Telecom? Chairman's office, please. Aye, Campbell here. I've got a laddy that wants to speak to you. Could you help me speak to BT Labs? Thank you. Good-bye.”

          He opened the door and we got into BT Labs, which is our equivalent of your Bell Labs. That is who he is. Ian Vallence, the chairman, knew who he was and trusted his judgment enough to at least give us 15 minutes. He opened doors for us.

          Find yourself a mentor.

          In the book we put a methodology together about how to approach people who are potential mentors. I guess a little tip would be: Don't go for the well-known people because they must get 100 emails a day. Be charming, go through their personal system, if they have one, explain why you want them to be your mentor, and just work at it. If you can't find one, keep trying.

Mr. West: A lot of very good mentors come from big corporations. They're on the board. Senior people in big corporations, not famous entrepreneurs. Don't go phoning up Bill Gates or someone like him because he gets lots of people ringing him up. Or Richard Branson. Sir Campbell was a professional businessman, on the boards of big companies. Big company people make great mentors. 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. He or she is there to give you advice and open the doors. Look around the corporate world. You may not want to work in the corporate world, but there are people in there who can really help you.

Mr. Southon: The day I knew we had a good book was when I sent a manuscript to Campbell and he said, “Aye, I'll have lunch with you.” We had lunch and I sat there quaking because, to be honest, in the past he'd seen some documents I'd produced before, such as board reports, and, in the nicest possible way, he tore them to shreds. “You'll be laughed at if you say that, laddy.”

          So, I was quaking when he was going through the book. He just went, tick, tick, tick, all the way down. He didn't like some of Chris' English, which was a bit contemporary, but I knew I had the confidence to take the book to publishers when I knew that Campbell liked it. I trusted his judgment.

          Okay, so you've got your elevator pitch—two sentences. You've got a mentor, hopefully, and you have no excuse for not finding one. You have no excuse for not getting a mentor. You're all educated people. A lot of you have been to college. You've got one degree of separation from pretty well anybody. If it were like a bunch of inner city kids we were talking to, that's tough, but, frankly, not for the people here. If you're good enough to get into the Hilton and not be thrown out, then you can find a mentor. Let's be honest.

          So Chris, what's next? You've got an elevator pitch and a mentor. What else is on the front of our marvelous book which will soon be available here in the United States?

Mr. West: Your first customer.

Mr. Southon: Hooray.

Mr. West: Mike, you should talk about that. You're the salesman.

Mr. Southon: Remember the dotcoms? Think of an idea, throw some MBAs in it, get some money, IPO, then get a customer. No, no. Get a customer first. We are still in the pub, remember? We haven't even started a company yet. The sales cornerstone is thinking, “That is really cool. I know somebody who would really be interested in that. Hopefully I'll come back with a customer.”

          It doesn't matter if it's your next door neighbor for $10, at least you have a real customer, somebody who spent some real money on something from you. It may never be at the list price, but they've opened up their wallets and handed you some money. At two of the startups I worked for, I went out selling because it was a friend and I was helping them out. Fantastic technology. In fact, I was over here in Seattle talking to Corvis. All really cool people. They loved the technology. Did they want to dip into their pockets? No, not at all. It was fun, but they didn't have a need for it. They wanted to talk about it, but they didn't want to spend any money on it.

          This is the first beermat test of your business. All of your ideas, I'm sure, are brilliant. I'm sure in your own minds people should be biting their right arms off to get this product from you. Ask them. “It's good, do you like it? Does it meet a need? Does the benefit meet a need? Will you give me some money now?” I know that this is hard for people who aren't salespeople. This is my own personal cross to bear, I always ask people for money, except in the street. Ask them for money. If they'll hand it over, you've got something. If they won't, you've got a problem. Maybe it's back to the pub to take out another beermat and start writing.

Mr. West: It's one of the hardest things to do as an entrepreneur. I've done this myself. I've had an amazingly brilliant idea, but I couldn't sell it. Facing up to that fact and realizing that, for some reason, it's just not going to work, that's very hard, but that's what you've got to do. A lot of ideas out there are solutions in search of problems. I think that's a problem with a lot of entrepreneurs we meet. They've got wonderful solutions, and they're wandering around thinking, “Who can I sell this to?” That is backtrack logic. The best ideas are driven from the perception of a problem, then you go out and find a solution for it.

Mr. Southon: Let's go back to selling, now. I'm a salesman. I admit it. Like they say at AA, “I'm an alcoholic.” No, I'm a salesman. Even worse. Salespeople tend to be despised, don't they? You've seen Glengarry Glen Ross or you've been sold something you didn't want. Or we're a bunch of sharp guys who just tell lies and con you into buying something. That isn't selling; certainly not beermat selling. It's certainly not the selling that you people need. You want somebody who speaks to customers, understands them, and meets needs with benefits.

          One horrifying thing we discovered. We were lecturing to the London Business School. This is one of the top business schools in the world. All these bright, young MBA-potential people spent a fortune to be there. We were lecturing to them and we were talking about sales. Chris suddenly said, “Wait a minute. How many of you have actually been on sales training?” Do you know the answer? Zero. How frightening is that? I'm sure if we went to Harvard or Cornell or anywhere else we would hear the same thing. That’s because selling is a bit dirty, isn't it? It's all a bit distasteful. We don't even do business development because that's really nasty as well. I've got to wash my hands just talking about it now.

          Selling is what will make your company succeed. If you haven't got a salesperson on board, get one absolutely immediately.

          All you entrepreneurs, of course, are great in a sales situation. Of course you are. It's your idea. You're enthusiastic about it, you want to tell people about it. Fantastic. 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.

          That's your big beermat test.

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