Serial Entrepreneur Howard Tullman Addresses Colorado's Digital Leaders
on 11/21/2013 07:51 am
Tuesday’s Built In Colorado Digital Leaders Luncheon was a perfect way to celebrate Built In Colorado’s one-year anniversary (and also other good news like Brad Feld joining our Advisory Board). But as the top 100 tech entrepreneurs representing both Denver and Boulder rubbed elbows at this invite-only event, they didn’t just celebrate; the crowd also got down to business and addressed the startup world’s most taboo topic… failure.
Chicago entrepreneur Howard Tullman, came into town to kick-start this discussion because, as chairman of Tribeca Flashpoint Media Arts Academy and General Managing Partner for the Chicago High Tech Investors, he knows that failure is a part of every successful venture. (It isn’t “contagious,” by the way, and will not rub off on other entrepreneurs, Tullman reminded.)
After a short welcome from Built In Colorado Chairman Erik Mitisek, Tullman gave a short checklist of what to do - and not to do - when leading a failing business. A checklist like Tullman’s is key because a failing venture must be handled the right way, especially if its leaders want to do it all over again.
“Even if your business totally shuts down and fails, if you do it right, you get to play again,” Tullman said. “That’s the way the world works; they don’t make you go home altogether.”
Here’s a few of the tips Tullman shared so that all entrepreneurs can play again (if they want to):
1. Talk about the end-of-the-world scenario and talk about it now. “You can’t wait until it’s too late to start to have these conversations,” Tullman said. “Entrepreneurs don’t understand how quickly that slippery slope accelerates. You don’t understand that even if you lay off the people, the money meter continues, so you have to start the process of conserving your resources much sooner than you think.”
2. “Don’t slice the salami too slowly.” In a dire situation, making a series of modest cuts is only going to have all employees wait around in anxiety: “You have to cut quick and you have to cut deep,” Tullman said. It may be rough to watch talent go out the door, but Tullman said talent is something that you can always find again as you rebuild: “They’ll be back, but you have to stay in business.”
3. Know what your business is best at so you can consider a salvage sale. “The optimal solution may be to find a home for your business somewhere else,” Tullman said, pointing to the fact that many large corporations are still clueless in spaces like mobile, social and analytics.
4. Shoot for a soft landing. If you conduct yourself in a professional manner, investors are more likely to be understanding (well, unless you have a friends-and-family round - then “you are completely screwed,” Tullman said). Professional investors, although not happy about it, understand that businesses don’t work out and appreciate seeing you managing your remaining cash carefully.
5. Do everyone a favor and give full disclosure. If you are upfront about your struggles and write it all down, you will leave “skid marks” so that other entrepreneurs don’t slam into the same wall down the line.
Tullman and his words of advice, learned from over 40 years of experience in management, IPO and turn-arounds, made it all the way to Denver this week because of Built In’s connections in other markets; Built In’s network, which includes Built In LA and Built In Chicago, is just one more way to help out entrepreneurs nationwide Mitisek said.
“The value of the network is that when we have entrepreneurs like Howard doing programming and events, we look at this entrepreneurial ecosystem as not just Colorado,” Mitisek said. “So that when you’re growing your business, you have a resource and can say, ‘I have 18,000+ friends in Chicago that I can look to.’”