The first two sessions that I attended at the ITP Camp were focused on entrepreneurship within creative industries, though from two very different angles. The first was lead by Lawrence Lenihan, a venture capitalist and Adjunct Professor at NYU, and the second by Tarikh Korula, an ITP alumnus and founder of Uncommon Projects, and Doug Barnes, a lawyer and friend of Tarikh’s. The two sessions were different in several ways, most obviously because the first was focused on product-drived industry and the second was focused on service-driven consultancy.
Here’s a summary of some of his main points:
- Don’t write business plans, write business presentations. It’s not worth the time and effort to write a full 40+ page document that will quickly be out of date. It’s better to put energy into communicating what your business does.
- Form your business around easing a pain. It’s better if it’s a pain that you are passionate about easing. Use tools like Google to see if people are looking for what you want to sell.
- Figure out how much it costs to acquire a customer.
- Know the difference between entrepreneurial opportunities and venture capital opportunities. Just because your business is not attractive to a VC doesn’t mean it isn’t a worthwhile pursuit.
Entrepreneurship for Creatives – consultancy businesses. It focused on concrete details, particularly in contract negotiation that design consultants should be familiar with along with other general advice on striking out on your own. It was an excellent session that was well attended; here’s just a few highlights from the evening:
- Scale is a huge challenge for consultancies. The time to money ratio makes it difficult to grow as you can only work so many hours.
- Someone in your business needs to be able to handle sales. The whole thing fails if no one is a salesperson.
- You don’t have to do business the stereotypical white guy way.
- Pick two: cheap, fast, good. The clearer you are at communicating this with clients, the happier everyone will be with the end result.
- Contracts do not need to be written down and certainly don’t need to be full of opaque legal jibberish. But writing things down as a matter of record (for instance in e-mail exchanges) is good practice.
- Educate yourself about IP. Your lawyer can’t tell you what your business model and IP model should be. Only you can make that decision.
- When allocating IP, pay attention to what you get to retain. What do you really need to own? What does the client really need to own? Be sure that you’re only agreeing to sell things that you own and can afford to sell.
- Decide what IP you need to own in order for your business to exist and grow, and then let everything else that is unimportant go.
- When you’re about to blow an estimate on a project, tell the client. Being up front and communicating keeps everything civil. As a service provider, it is your responsibility to be clear with the client.
- Questions about incorporating and forming legal structures become important when there are more than one of you (e.g. parters, employees).
- In the US, generally tax and accountancy issues increase as you move from sole proprietor to corporation.
- Can set up contracts with mixed rates: fixed rate for certain assumptions; hourly rate when those assumptions fail.
Other sources of information that were recommended were Fred Wilson’s blog avc.com and the presentation I’ve embedded below.
Both session leaders recommended the book Getting Real by 37signals.
These were the first entrepreneurial events/talks that I’ve attended in the US. I didn’t really have much interest in the area until I started my PhD, so I’ve attended business development events in the UK. The thing that really stood out for me during these sessions was just how American-centric they were. In the session with the VC I asked how some of the topics he was talking about translated to Europe, particularly the UK. He responded that he didn’t know and wasn’t interested in knowing. He was only interested in US markets and companies. It was too hard to fire someone in France. While the American-centrism was less blatant in the consultancy session, there was a curious lack of acknowledgement of anything other than the US system. (But oh did the talks of how much money you need as a buffer make me so appreciative of the NHS. Estimates of $400+ a month for healthcare.)
Both talks were focused on New York, as one would expect given our geographic location, but I found it curious that they lacked any discussion of any other place in the world or even just the US. The exception was a side note in the VC talk that countries such as Brazil and China will soon blow up as the next big thing.
In both sessions there was a lot of discussion of the current bubble, though the difference in tenses used was quite interesting. The VC viewpoint was that the bubble is going to crash in the next 18 months and is already approximating the end of the dotcom bubble (Ashton Kutcher was noted as one of the significant signs). In contrast, the consultancy talk believed the bubble is still on the up, though of course acknowledged that it will one day end.