What Entrepreneurs can learn from Hustle & Flow

If you are a startup entrepreneur, you need to see the movie Hustle & Flow.  You may have already seen it since it came out in 2005, in which case you should see it again because it has a number of lessons for entrepreneurs.

Yes, I am talking about the movie where a pimp tries to create a hip hop album and reinvent himself.  And yes, I realize on the surface, this may not seem to be a movie with business lessons.  But it is.  Check out the trailer:

Here are the biggest lessons an entrepreneur can take away from this movie:

1.  Small teams with complimentary skill sets can make magic happen

You don’t need large numbers of people to create a fantastic product.  Djay brought together only 2 other people to his team to create music.  A producer and a sound engineer, while he (Djay) provided the lyrics and rapping.  Together they spent hours refining and iterating on their album, with each person playing a critical role.

2.  Your product needs to be differentiated and have your signature

This sounds obvious but many startups miss it – look at the number of Groupon clones coming out of the woodwork.  Hip hop was already well established when Djay and his team were creating their music.  But it didn’t have the style and sound that they brought. The Tenesse – or the south – sound.  Also, their lyrics were real.  ”It’s hard out here for a pimp”.  It spoke to their true life experiences – their signature

3.  You don’t need to get distribution through existing players.  There is always another way.  Get your product in the hands of consumers.

Djay put all his eggs in one basket. After the product was complete, his entire distribution strategy was based on getting an established player (a successful artist) to listen to his music and maybe, he will put in a good word to the record companies.  Spoiler alert: this strategy doesn’t work…and tragically, where Djay invested most of his time.  However, what did work was going to radio stations and being told no (many times) and finally convincing a station to play the song.  When consumers finally heard the music, the product was so good they couldn’t get enough.

4.  Hustle (i.e. passion) can make up for lack of credentials or expertise

So, who went to radio station after radio station to try and get someone to play the song?  It wasn’t Djay. It was his, lets just say ‘employee’.  She had zero experience in the music business..but a ton of passion and belief in the product.  She hustled her way into radio station after radio station and would not take no for an answer until one station finally said yes.

I’ll leave you with this song, “It ain’t over for me”.  If – scratch that – WHEN you go through a setback building your business, this song is a great motivator.

“Keep hustling.  It ain’t over for me.  I’m gonna step up my game…and get what’s coming to me”

May 23, 2011 – 1:35 pm Categories: Uncategorized | Post a comment

Before you take the plunge

From time to time, I catch up with ex-colleagues in the corporate world and the typical reaction when I talk about working on a startup is “wow” or “must be great being your own boss!”.  You know what?  Yes it is nice and rewarding…but building a startup is hard.  Really really hard.

Given the economy, lots of corporate people are taking the plunge and trying their hand at a startup – which I think is fantastic.  I believe that is the only way for us to get out of this recession, we have to invent our way out of it.  See Friedman’s article in the times about this here.  But I digress… Read More »

June 30, 2009 – 7:47 pm Categories: cubicle startup technology entrepreneur, Startup Tips | Post a comment

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Make your customers feel like stars

There is a great discussion over on Fred Wilson’s blog on what leads to consumers adopting new technologies.

Fred highlights these technologies to help answer this question:

iPhone – mobile browser with a killer touch screen interface
Facebook – a social net with real utility
Wii – gesture based user interface for gaming
Hulu – your favorite TV shows in a fantastic web UI
FlipCam – a video cam that fits in your pocket comfortably
Rock Band – everyone can be a rock star for a few minutes
Mafia Wars – a natively social game built for social nets
Blogger – a printing press for everyone
Pandora – drop dead simple personalized radio
Twitter – blogging everyone can do in less than a minute

You can read all the great comments on the post, but many emphasized usefulness, sexy, simplicity, sociability, purpose and visibility to others

Fred’s view is:

So it seems to me that consumers are driven to new experiences that are simple and useful and/or entertaining. It is not enough to be the first to market with a new technology. You have to be the first to market with a version of the technology that is simple and easy to use.

I believe deep down inside we are all self-centered, insecure and want to be ‘stars’. Most or all of these consumer technologies meet these human needs:

Twitter: How cool is it to see your username and all your tweets? better when someone else refers to your tweets.
Wii: Lets us imagine we are that awesome tennis player or golfer we always wanted to be
Pandora: Music just for ME…because I am ‘special’ – same goes for Hulu, TV just for ME
Facebook: My friends can see all my photos, what I’ve been up to..and I can expand my friend circle
Rockband: We can be a [rock]star!

Compare this experience to installing a new printer driver on windows.  Did that make you feel like a star?  Didn’t think so…quite the opposite.

So, takeaway for me is make your customers feel special…like they are a star, and you’ll win them over.  Kind of obvious but important.

June 9, 2009 – 6:04 pm Categories: consumer technology | Comments (1)

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How to pick the right incorporation structure

One of the major early decisions founders have to make is selecting the right incorporation structure.  As I found out pretty quickly, this is not a simple decision.  While there are only 3 choices (C-Corp, S-Corp and LLC), the number of exception cases and ‘If/thens’ were making my head spin so I decided to simplify the decision.  A picture is worth 1000 words so here goes:

C-corp, S-corp or LLC

C-corp, S-corp or LLC

Caveat:  This is obviously a simplification and cannot possibly accommodate all of the various scenarios out there.  Thus, this is informational only (I am not a lawyer) and you should consult your accountant and/or attorney to discuss what is best for you.

The advantages of simplifying are so startups can focus on a few important questions to make this decision.  Turns out most of the questions revolve around financing and operating flexibility.

  • Are you raising VC or Angel financing? If you’ve already decided that you’ll need equity financing from professional investors then your best bet is to go with a C-Corp.  This gives you the most ownership flexibility (no limit on shareholders, multiple classes of shares, etc).  From what I gather, most VCs will insist on this structure
  • Not sure and want to keep all of your options open? The S-Corp allows you to minimize taxes and easily convert to a C-Corp in the future if you do end up raising money.  Think carefully about whether you want to raise money as there are a whole set of other implications (that’s material for another post though).  Note; the vast majority of startups are actually bootstrapped or funded by friends/family.
  • Do you want to bootstrap or build a lifestyle business with minimal operating formality? Then an LLC is probably the best structure as it allows you to minimize your tax burden and has no formal operating requirements such as quarterly board meetings and filing annual reports.  However, if you change your mind and want to raise money than it will be more difficult and expensive (relative to a S-corp), but not impossible to convert to a C-Corp.

There are a ton of great resources out on the web on this topic.  Here are the ones I found useful:

Hope this helps clarify the decision for some of you.  You are taking enough business risk with your startup, there is no need to add additional risk/complexity by choosing the wrong incorporation structure.

I would love to hear how other founders made this decision and any feedback on the above.  Now back to actually building a business.

June 8, 2009 – 1:33 pm Categories: Uncategorized | Comments (3)

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MIA

Yes, I have been M.I.A (Missing In Action)! So many excuses..let’s see, there were the olympics, then the election and so on.

To be honest, my blogging absence can be explained by one reason – TWITTER. It simply makes it easy to get quick thoughts out and have a discussion with others interested in the same topics.
Fear not, I’ve been working hard on the startup and will be blogging about the experience. Stay tuned!
Meanwhile, you can follow me at www.twitter.com/farazq :)
March 6, 2009 – 2:23 pm Categories: Uncategorized | Post a comment

Where have all the bootstrappers gone?


Sramana Mitra wrote a great article on Forbes asking why there aren’t more bootstrappers. And asserting that bootstrappers can help America out of our current economic funk.

She raises an important question – Why don’t we have more bootstrappers? Why are so many entrepreneurs interested in raising VC funds – especially for ultra-light web startups that don’t require a ton of capital?

One issue is bootstrapping is just not sexy. It takes many years to grow your company. You have to grind out revenues with meager funding from friends and family…all while eating PB&J sandwiches. Its much more sexy to say I have raised $X millions from well known VC firm while you cater in tuna tar tare into your trendy loft office space…right?

If so, then its a marketing problem. We need to make bootstrapping more sexy. Borrowing from the current Organic/Green hype – maybe the new term should be ‘The Natural Entrepreneur’ – no preservatives added. Think about it – slow food, grow your own, reduce waste, maximize your resources, minimize the impact on earth. All of this is the opposite of the grow fast, raise millions, hit the home run or go home crowd.

OK, more seriously though, I think there are three parts of the solution to this issue:

  1. The media (both mainstream and blogs) needs to talk more about the everyday heroes who grew their companies slowly (or naturally)…as opposed to the current fascination with being the next Google. All the young budding entrepreneurs out there need to hear about these heroes as much as we hear about the guys and gals who hit the home runs and now worry where they are going to park their new jet.
  2. Schools and Universities​ need to teach entrepreneurship as a real career option, not as a ‘roll the dice and you might get rich’ education. I think some schools have figured this out, we need more. Entrepreneurship is a teachable skill. Just like any other subject, some people are better at it than others, but the skills can be taught and learned.
  3. Most importantly, Government needs to more actively support the bootstrappers with funds, incubator office space, tax credits, legal help, etc.

Clearly, lots more needs to be thought through with the above solutions and I plan on posting more on these topics. And what role should VCs have? Hey, someone has to fund the hundreds of millions for the large scale solar, wind and bio-mass plants that we need!

So next time someone asks you how much VC money you are raising – just say “nah man, I’m doing it Naturally”.

Update 8/31: Looks like there are others who believe too many entrepreneurs and VCs are chasing short-term money as opposed to looking to build long-term successful companies. Judy Estrin is a serial entrepreneur who thinks Silicon Valley is in trouble because of this mindset. Read her article in the NY times here.

Heard of the Slow food movement? Maybe we should start talking about the ‘Slow Revenue Movement’…

August 29, 2008 – 1:47 pm Categories: bootstrapper vc organic natural | Comments (2)

Find a niche

Pretty simple rule right? Well, easy to say (and many people do) but tough to do.

I’ve been doing a fair amount of research in the online education/learning space and I ran across this techcrunch post on a new ‘social learning’ website – Learnhub. Another learning website was mentioned – Edufire.

These two sites illustrate why finding a niche is important.

Edufire is nice and focused – the value to users and tutors is pretty clear. As a student, I can easily find a foreign language teacher, see their community rankings and pay a reasonable fee for language instruction through my webcam. As a tutor, this gives me an easy way to find students and sell my skills for $.

On the other hand Learnhub is not focused. They seem to be targeting all users – from K-12 students, to college prep to professionals. I admire the goal to revolutionalize online education, but the revolution has to start somewhere…with a core set of users. Their biggest community is the GMAT prep – maybe thats a clue as to where they should be focusing. Also, not sure I get why someone would take the trouble to create a course on the site. Unlike Edufire, there is no compensation for content creators.

Of course, there are many examples of ‘unfocused’ sites being very successful (i.e. YouTube). Maybe Learnhub will prove me wrong (it’ll be interesting to watch how this plays out)….but I think education is a huge space and finding a niche is critical.

Which site would you use?

August 28, 2008 – 5:48 pm Categories: onlineeducation techcrunch onlinelearning learnhub edufire sociallearning | Comments (4)

NY Times does video right

Take a look at the NY Times video of Hillary Clinton’s DNC speech: http://tinyurl.com/6gf9am

This is how to do video on the web: A full transcript that is clickable and as well as sections that let the user click their way to watching the most interesting parts of the speech.

I like this because I can read much faster than Hillary can talk – so I can go right to the parts of the speech that I want to listen too…while still scanning the rest of the speech.

This is a great example of how the interactivity of video on the web beats the passive experience of normal television…well, except when you are watching The Matrix on a 42″ plasma with surround sound.

The end result – I spent 13 minutes watching a 22 minute video.

August 27, 2008 – 10:31 am Categories: Hillary Clinton Video DNC Clickable Transcript | Post a comment

Citigroup gets green cred

More data to support that going green is not only good for a firm’s expenses, it’s also a great way to gain [green] credibility from your customers.

I recently switched to paperless statements on my citigroup credit card (I know I should have done this months ago), and this is the message Citigroup sent back to me after I made the change:

XXXX-XXXX-XXXX-5897
Thanks for going paperless. Citi will plant a tree on your behalf.

That is how you get your customers to love you and be environmentally friendly at the same time. I essentially get zero bills through the mail now – its simplified my life and it feels good to do something for the planet.

This is a no brainer. Why aren’t all firms doing this?

Case in point – I get large amounts of paper from hotel and airline frequent stayer/flier programs. Typically they also email me the same information! Duh. Send the email, stop the paper.

Now if only Citigroup can do something about boosting their stock price…

August 21, 2008 – 3:29 pm Categories: Citigroup green environment paper statements | Post a comment

Keeping options open

An update to my post about focusing your business on a niche product or service – why is this so hard? One explanation is that all of us like to keep our options open. But, even when it may ultimately hurt us? Yes, according to Dan Ariely (a behavioral economist at MIT).

Take a look at this short video:

Many of us can relate to the dating analogy. But that’s not the case in our business ventures, right? Wrong. I’ve met several entrepreneurs who have a million “game-changing” business ideas in their head. That, in of itself, is not really an issue (it’s simply brainstorming). The problem is when they try to pursue many of these ideas. Similar to the dating analogy – the idea you like the best will eventually wither due to lack of attention.

In a future post, I’ll talk about how I’m deciding which of my ideas to pursue. And I can tell you – it IS NOT easy!

August 14, 2008 – 10:01 am Categories: business focus, dan ariely, dating, irrational, options | Post a comment

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