the beermat entrepreneur
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.
Copyright 2002 Morino
Institute. All rights reserved. Edited for length and clarity.
Statements made at Netpreneur events and recorded here reflect
solely the views of the speakers and have not been reviewed or
researched for accuracy or truthfulness. These statements in no
way reflect the opinions or beliefs of the Morino Institute,
Netpreneur.org or any of their affiliates, agents, officers, or
directors. The transcript is provided “as is” and your use is
at your own risk.
mary macpherson: introduction
“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
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.
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.
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
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
ado, let me introduce Mike and Chris.
mike southon & chris west: the beermat entrepreneurs
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.
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
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
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.
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?”
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.
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, 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.
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?
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?
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.
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
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
First of all,
Chris, it’s the elevator pitch.
The elevator pitch. We would have to explain this in England because we
have to start off with telling people what an elevator is.
A lift, actually.
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.
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.
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.
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.
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.
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
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.
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
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
like a cup of tea?,” I asked.
“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.”
“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. Explain it to me again, laddy, this time so I understand
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
laddy, who would buy such a thing?”
I said, “Oh a
telecommunications company, Sir Campbell.”
Telecom, do you think?”
Yeah, yeah, you've got it.”
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
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.
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.
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.
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?
Your first customer.
Mike, you should talk about that. You're the salesman.
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.”
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
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.
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.
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.
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.
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,
That's your big