Lesson #13: The myth of the shark tank: The amazing business community of Tucson.

As I mentioned in Lesson #1, before I started iTipArtists, I had this terribly misinformed idea of what business people are generally like. Basically, I got the impression they were all like Michael Douglass from Wall Street, or Donald Trump from The Apprentice. I assumed that all business people were at least aspiring to be heartless, profiteering, backstabbers who didn’t care about their community and how they affect others. But I did think they all looked great doing those things. Hollywood. Feh!

Yes, I know it is ridiculous for me to have thought this, given that there are signs all over the place (patronage of the arts, charitable organizations, volunteerism, all by successful business people,) that this is not true. But, prejudice is pretty ridiculous in general.

Anyway, I was truly blown away by how many successful business people care about Tucson. Tucson holds a special place in the hearts of many; it has so much natural beauty, a vibrant arts community, lovely weather and gorgeous gem-like homes. Some successful business folks I met moved here to retire, and some have grown up here.  They all honestly want to see their beautiful home continue to grow and be successful. There were a good 6 or 7 great mentors at Startup Tucson last year, and about this many at the Arizona Center for Innovation. These mentors gave time and enthusiastic advice to us all. They were all very positive and want to see new businesses succeed.

They share the value I have of wishing overall success as it benefits everyone.

So, I write this entry as a shout out to the business folks who are so supportive of new ventures and about the success of their community. You guys are great!

I’d also like to recommend the BizTucson articles for Powering and Entrepreneurial Economy for more info about the supportive and positive business community in Tucson.

If you are going to seriously take the plunge and start your own company, great people are rooting for you here; its not all sharks and mean competitors.

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Lesson #12: How do I like to work with people?

How do you like to work with people?

I’d never considered it before starting iTipArtists. To be honest, I’ve thought as work as something I do on my own, report to a boss and get paid. I like to get along with my co-workers but, until this year, never considered what energizes me about working with other people.

After working at iTipArtists, I learned that it is quite impossible to do anything on a large scale alone, so it is paramount for each person to know how they work best with other people if they want to be successful!

We all grew up in some sort of family so we all know in some ways how to (or how not to) work together to accomplish a goal. But there is more to it, I have a feeling. I am just now starting to really think about it critically.

Considering how I read people and their relation to work has been a surprising task. Sometimes it is really easy for me and sometimes I have a big block. I have worked in two spheres, with engineers and with musicians.

With engineers, I know who I will work well with: people who keep learning, optimistic, and have a good attention to detail but ALSO have an open mind and an open heart. People who will consider every idea in a conversation carefully and enthusiastically agree or tactfully disagree, pointing out exactly why. And the assertive creative engineer – someone who really thinks outside of the box and shares their ideas openly – on top of those other qualities are just amazing to work with. These folks are the energy behind any project. I’ve had the pleasure of working with just a few folks like this and I’ll never forget them.

But with musicians, creative types, I am often at a loss. I’ve worked quite a few musicians who have exactly the same qualities as mentioned above and have been challenging to work with. When faced with a project, Nothing gets done, ideas fizzle and the energy just isn’t harnessed.  Is it because a difference in background and perspective? The experience of all of those nights working with classmates in college to finish the seemingly impossible take home group exam time and time again? Compared to the bulk of music being practiced hours and hours alone?

The few times its worked well with me and another creative type is when I am working with someone who is a perfectionist who needs to keep on learning and creating. Usually someone a little calmer than I am, someone who is a bit at peace (but not all the way). Perhaps “sort of Zen” might do. Also, someone who occasionally says, “What do you think?” and actually wants to hear it. An open mind and an open heart. Hmmm…

Reading this over, none of this sounds like ground breaking information. But to me, since this is the first time I am thinking about it critically, it will be a useful starting point for finding people for future projects. You just can’t accomplish a typical big project alone so knowing how you like to work with people is key.

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Lesson #11: Nannies are just not for me (but they might be for you)

I know I mentioned this way back in Lesson #1, but I wanted to use this post as a platform to discuss the issues of career, childcare and nannies in a critical way that I feel does not get enough rational discussion these days.

I’ve lived in the Midwest in my childhood, the East Coast for college and for 7 years after, and the Southwest for the last 7. There is a HUGE split in how people value career and raising young children in the Midwest and East Coast. Since the Southwest is such a mix of native Southwesterners and transplants, I’m not really sure I can comment on it.

Anyway, in the Midwest, I got the impression early on that it was selfish on your part if, as a woman, you had young children and did not stay at home to raise them and decided to work instead, especially if you did not have to work to support your family. The idea was that your kids need you and they won’t turn out quite as well if you are not there to give them enough motherly attention.

When I moved to the East Coast, I was shocked to hear the opposite:  people told me that it was selfish on your part if, as a college educated woman, you did not focus on your career and make as much money as you can for your young family. The idea was that you want to take care of them for college, shelter them from debt, and make sure they have the stuff that makes them happy in the meantime.

Now, when I was in college, I met a young woman that had a nanny growing up. She remembered her time with her nanny happily as her nanny was a great caregiver. Her mother worked and did not wish to stay at home. When she grew up and her nanny moved on, she became close to her mother. I don’t think this young woman was hurt by the fact that her mother was not there to raise her as a little kid. Her mother was there for her when she was a young woman.

So, I’ve come to the conclusion that there are two reasons to work outside of the home if you have young children: 1) because you have to and 2) because you want to. Many moms do wish to be at home with their kids but it isn’t possible with the lifestyle they want or with the situation they are facing. BUT, some moms would be miserable at home. Would you really want a miserable person raising your children? I wouldn’t! You would want to find someone who loves the job if you want what is best for your kids!

Working at iTipArtists was invigorating in that I felt so much more capable and confident than I do at home some of the time. Tiny humans are not reasonable creatures. My children are sweet but they have definite ideas on how they want things and I work hard at establishing boundaries and gently yet creatively disciplining them. I’m not always so good at this. I have to learn it all as I go. It is exhausting and frustrating at times.

In the news and from our peers, we learn every day new ways in which our parent’s old parenting style was wrong, or how an ancient parenting style discarded long ago was right, or how a current trend is controversial. Or, some new way to do things that sounds great but no one has much proof is any good. Children are also very different from one another, and most of us as parents do not get the chance to learn how to parent on very many children. Going each day to work to something that you are good at can be a great way to recharge your emotional batteries before going home and facing the steep learning curve.

Personally, I feel I am lucky and enjoy being able to stay at home with my children. I also enjoy working (okay, I am a bit of a workaholic), but I don’t want to miss this time with them. I like hanging out with them. When they are just being them and are safely playing or learning, they are interesting and beautiful. It is wonderful to see how they are developing and even more wonderful to see them develop and find things they are passionate about, make friends, and grow into good people.

So, the lesson learned: nannies are not for me.

But they might be for you. As a woman, you can’t win this battle with everyone no matter what you choose, so just do what is best for your and your kids. I will join you in telling the people who are judgmental of your decision to suck eggs.

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Lesson #10: Money isn’t my motivator. Crap!

Have you even been in the position where you wanted something to be true so badly you repeatedly denied the truth until it bit you in the butt, again and again?

Here is the truth, when it comes to me, work and motivation: money just doesn’t make me jump too high. It’s not enough of an incentive. I wish it were more of a motivation, badly, because so many career decisions are easy to make when you consider the money involved. And, of course, more money DOES make life easier in so many respects. But, time and again, when I have made career decisions based too much on the reasons of money, I regret it.

I could go into why money isn’t my motivator in more detail, but I won’t. The simple truth is that while making a good salary is a value of mine, other values just trample it flat.

Well, crap!

But, I am hoping this time the lesson will stick.

In the case of iTipArtists, an early motivating factor for me to start the business was that perhaps it would help pay for those upcoming college expenses that my children will have to deal with. It is a value of mine and my husband’s to help them however we can with what they need to get them going in whatever career they choose. The cost of college seems just unreal now. What cost me and my parents $26K a year in 1998 costs over $40K a year now! That was a private school, but the public schools are increasing significantly as well and will continue to do so over the next 12+ years.

However, when I decided to leave the business, I had to really consider how I still felt about letting go of the possibility of iTipArtists paying for college for my children. Faced with iTipArtists possible financial success and the time I would miss being with my kids, the kids won out and surprisingly, it was no contest. The lesson learned was in how little the money really mattered to me in the end.

I came to the conclusion that I would just have to find another way when my children are a little older, and I have a little more time, to help save. I have my engineering degree and a lot of creativity so likely, I will figure something out. In the meantime, having the thought of saving for my children’s college in the forefront of my mind caused me to work on opening our 529 plans with what we have now, and to quit sitting on the subject.

Therefore, my experience with iTipArtists is that my motivation for starting it had a whole lot more to do with changing the world (more on this on Lesson #14), and not so much with making lots of money. It also informs me to who I am a little better, and hopefully to recognize when I am making a decision based on too much on the money.

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Lesson #9: Lifestyle businesses are not for losers.

A company and a lifestyle business are two different types of businesses. When someone says they are forming a startup, they are forming a startup company. When someone says they are starting a business, they might be referring to a company, but they might be referring to a lifestyle business. 

A lifestyle business is some sort of business which exists with the intention to stay a certain size to support whatever lifestyle makes the owner of the business satisfied. These businesses are typically owned by a family or one or two people. Examples of a typical lifestyle business is a family owned restaurant (not a chain or a franchise), a tailor,    or a plumber.

Mentors explained the difference between the two to Mary and I repeatedly, usually sounding something like this: “What you are starting is a company. While some people start lifestyle businesses (which are just fine), you are starting something that will grow, that people can invest in, that will hopefully create many jobs in Arizona if you are successful.”

I am certain this was NOT the intent, but I kept interpreting: “Companies are for AWESOME people. Lifestyle businesses are for LOSERS. You want to help Arizona folks get jobs, right?” (And of course I do!)

What I wish I considered early on in the iTipArtists experience was to create a lifestyle business first, something on a small scale. It is possible to create a lifestyle business, run it for awhile, and then expand into a company later. For example, a carpet cleaning business can start as a lifestyle business owned by one person and grow into something like Stanley Steamer. A great mentor mentioned this idea to Mary and I after we’d been working on iTipArtists awhile and I think its a great idea.

Though I don’t feel that right now I have time for even a tiny lifestyle business I think I will in the future. Many stay-at-home moms eventually create a lifestyle business of some sort, so I know it can be done.

If I were to start another company in the future, I would start it small; I would sell a product for at least a year to truly understand the costs involved, research my customer, understand my market, and flesh out a business plan with experience and numbers behind it. I would treat it as a lifestyle business at first. If I could prove to myself (and my family) with numbers that it could grow, I would turn it into a company, after I had a chance to get to know the community of people I might want to hire.

I would also choose something I absolutely loved doing in case it stayed a lifestyle business.

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Lesson #8: Yes, it does take 40+ hours of consistent work to make a startup…start

Yes, it sucks, but I believe this is true.

There is a saying we learned in the incubator: “life does not stop because you start a company.” Which means, your other job, your other commitments and all of your family duties do not grind to a halt after you get a wild hair to start a company.

Obviously, this fact was one of the deciding factors in me leaving iTipArtists. I knew this lesson to be true before we started iTipArtists but I was so psyched to start the company, I was hoping that fate or providence or…something…would help me figure out a way for me to make a go of it all (because my IDEA was so AWESOME, see Lesson #1.)

I thought maybe Mary and I could do a sort of job sharing and pool our time to make a go of things. But this was a big mistake. Mary and my schedules did not work well for this. Mary recently retired when we started iTipArtists but she still had consulting work to do. This was very tough for us to coordinate getting things done at a good pace as her work was a week away here, a week away there. But, there it is, life does not stop because you start a company.

I suppose, when some folks start a company, they stop working and re-mortgage their home or take out monster loans to cover the living expenses gap before the company starts taking off. I understand this in a new way now. However, this was just not an option for Mary or I with either of our values as they are. But, more on the subject of comfort, time, investing and companies in Lesson 9!

Anyway, it is good to know what a good number of work hours is for the future. This lesson was one of limits for me. Humbling and very important.

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Lesson #7: Incubate, but be assertive

You might be wondering if being in the incubator at Arizona Center for Innovation helped iTipArtists along.

The answer is yes, it did, immensely!

For anyone building a startup business for the first time, incubators are a great resource of knowledge and perspective. It is also healthy to get your business out of your home and into an office; and Arizona Center for Innovation let us do this at a great rate with a team of staff and mentors there to help a Startup…start up!

However, the lesson I learned from being in the incubator is to always do what is best for the success of your company and to resist treating the incubator mentors and staff as your boss(es).

In our particular incubator, as soon as we joined we were “thrown into the pool” of amazing opportunities to pitch our idea to investors, meeting with mentors, highlight our business at community events and apply for business grants. Our business attended every event in some form and submitted every single grant suggested to us. In general, this was immensely helpful as it made us work hard to get up to speed on what business terms meant and what we needed to work on. We learned a ton.

However, it left little time for Mary and I to do some of the nitty gritty legwork of setting our business up and product development. It was another sign to me that we needed to put more time into the business on a consistent basis as well as make the team bigger. A few times though, I believe we should have just put on the brakes with “incubator work” for a few days at a time and attended to a some issues that we left undone for far too long (see Lesson #6, My Legal Advice:).

I think that balancing participating in the suggested incubator events vs. developing your company is tricky. Every company comes into an incubator with vastly different needs and experience; every team member of your company also has different personal issues to deal with. So, sometimes due to the time you have available, you have to make a call: this week do we work on our pitch for the next event or do we work on developing our product (which will make our pitch stronger for the next event?) There is the option to say no to an event. I don’t think your company will get kicked out if once and awhile you have to bow out of an event.

A second, smaller, yet important lesson along the same lines has to do with mentors in general. I am discussing this here because the point is the same, a mentor is there to help you but they are not your boss.

We listened closely and seriously to our mentors. All had predictions as to how good our concept was according to our pitch, and later, based on our prototype. But after awhile, I took their predictions of how good the concept/prototype was with a bit of grain of salt.

iTipArtist’s customers were meant to be musicians, artists and performers and also the audience of these customers. Our mentors primarily had experience with buying art and not much interest in finding new musicians or connecting with them; this was just the demographic of our mentors.  Therefore, our mentors were quite excited when it came to applying iTipArtists with connecting with new local visual artists, but not much interest in connecting with new local musicians. And of course, they did not have too much to say about how an artist or musician customer would like the product.

Therein lies the grain of salt. Business is such a vast subject that one person cannot possibly be an expert in every arena. As another balancing act, I learned that you must take copious notes when meeting with a mentor (you will need these notes for later, I guarantee it!), be grateful for the time they spend with you but critically decide what you think is truly useful to your business. Never blindly follow advice because you think someone has more experience than you. Accept the advice graciously and weigh it out carefully.

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Lesson #6. My legal advice:

My legal advice to anyone who is uncomfortable about legal business issues: you know so much more than you think you do about the basic legal forms you need to set up in your business. Just do it!

Any business needs a good lawyer, it is a fact. However, lawyers are almost prohibitively expensive to startups so you have to make sure that the person you choose is someone you can dependably work with closely and well to get the job done right efficiently. To find a good match takes time. In the mean time, there are cheap and free ways to get the legal stuff at least started.

Unfortunately, it took Mary and I until we decided to close the business to learn this. While we were running the business, we had a tough time finding a good fit for us. In the meantime, we struggled with feeling like the legal agreements we needed were out of our reach to do on our own. We learned through mentors and friends that really, any legal agreement can be hashed out through going over one’s practical needs for the relationship to work; a few phrases of what you need and when and how and for how much. The rest of the typical legal language in an agreement you can put together in other ways if you don’t yet have a lawyer. We received example documents to give us ideas. We peeked at LegalZoom.com as well. But we felt we just needed that “stamp of approval” from someone who had a law degree. I think we were both afraid we might forget in our agreements something so important that we would be sued or have to go to jail if we did anything ourselves.

Looking back, it is unfortunate we let this fear stop us so much. It hindered us from ever putting together an operating agreement between Mary and I and it stopped us from entering creating an agreement with our programmer. This really hurt us from making quick headway in our project.

When I decided to leave the partnership, we needed to figure out what to do; close the business and start new, or assign interest of iTipArtists to Mary? My gut thought that closing the business and having Mary start a new one would be easiest. But I wasn’t sure. Maybe assigning interest would be easier though I didn’t know what that entailed. A good local lawyer counseled us to have me assign my interest to Mary. It would just be a simple form we understood. We ended up hiring a second lawyer to help us do this as the first could not take us on as clients at the time. We gave her a $500 retainer, which in addition to several things, required us to whip up that operating agreement anyway, even though we didn’t have one yet in place.

The $500 was used up quickly and the assignment of interest was not yet complete. We inquired of the second lawyer what it would take just to end the business and have Mary start a new one. She gave us a list of things we needed to do.

Guess what! Every one of them we could do ourselves. We got all the answers we needed by looking at the IRS website, the Arizona Corporation Commission website and LegalZoom.com. We closed it all for $35 and have a to file a tax return at the end of the year marked “final”. To start up the new business, it cost Mary $85. THAT’S IT.

So, again, if we both didn’t have such a complex about creating an agreement through a lawyer and just DIY’ed the operating agreement and the programmer’s agreement, we would have been a lot better off.  I am certain we would have made mistakes but after we found a lawyer who was a good fit for us, we would have been able to get it right. You can amend agreements. The parties involved with the operating agreement and the programmer were benevolent, well known, trusted individuals, who would have quite likely been keen amending an original DIY style agreement.

In addition, I would like to make a call for incubators to put a rubric together for scared newbies when it comes to legal issues: for operating agreements, for agreements between contractors, for human resources; just to get an embryonic company started. I know incubators have to tread lightly about legal issues as they cannot claim to give legal advice, so this is not an easy call.

But, it would have so helpful to have some general points to think about rather than just going through an example legal agreement and trying to make sense of it. Legal language is complex, powerful and specific, which is why folks go to law school. It would have been helpful to have someone explain what goes into a legal agreement, what all the sections are for, and what are the typical issues one must consider. Just a little help for the severely legally insecure, a “agreements for dummies” explanation would be great.

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Lesson #5: Just Make Something!

Another idea from Guy Kawasaki’s book The Art of the Start that really informed me was the concept that your business should be working on a product as top priority.

I know that sounds simple, yet another “duh”. However, with all of the new things to learn when starting a company for the first time, the making of our actual product got put by the wayside. When Mary and I joined the incubator, we fell into the deep end learning about the business end of things to such a degree that we lost sight of creating the product for awhile. Also, after talking to our potential customers for feedback on our idea early on, we got the feeling that the original product concept needed tweaking. So, we worked on our concept on paper longer than we needed to instead of jumping into product creation mode. As a first time entrepreneur, I wanted to build the best possible product right out of the gate and hit a home run. But really, it would have been better to have Product 1.0 rather than Product 0.0 sooner than later.

With my engineering experience way back, I should have known there was no way around the fact that the process is iterative. In any effort in which one builds something for the first time, it is highly likely that Product 1.0 will really suck in comparison to Product 2.0. A good harpist friend of mine, Martha Gallagher, said that if you truly want to be good at songwriting, you have to be OK with writing some really stinky songs first. I believe this is true in the case of products as well.

Reading Kawasaki’s book and advice from mentors was helpful to realign our priorities.

In the end, we got pretty far in the concept and wire framing stage. I was happy that we created some beautiful wireframes in a great App prototyper software by JustInMind. It was wonderful to get out concept into a visual form. We got so much excited and encouraging feedback by just being able to show potential customers something. I found it also quite energizing, it gave an extra jolt of energy (and motivation!) to work on getting other parts of the business up and running.

I got a glimpse that if we’d built a product, we would have learned so many more things that would have helped set up our business in almost every aspect: such as how much it would truly cost (not just an estimate), who our future business partners might have been (we would have had to find them), and if any potential patents were pending (as the code would have been written).

I think by the time I was out of steam on the company, we were actually in a good direction product wise.

But there was one more big stumbling block in front of us regarding “just making something” that I did not overcome by the time I called it quits: Legal flummox-ment!

Read on in the next post!

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Lesson #4: Bossiness does have its place. (Be a pain the patoot when you need to be!)

At the session for Building Your Dream Team at the Arizona Center for Innovation, there were two great mentors present to discuss ideas and answer questions from the incubator clients. The mentors are in leadership roles in tech companies in Tucson with many years of experience to share. They were great to have at the session.

At some point in the discussion, there was some sort of disagreement over an idea or a technical business issue between the mentors. I have no memory on what it was about now, but, at the moment it seemed like a pretty big deal as neither would let it go. I think at some point they agreed to disagree. It got pretty tense for a few moments though!

Now, don’t assume you know where I am going with this. You might be surprised!

Yes, it was a couple of tense moments and I got a little uncomfortable, wondering if the two were going to start full out yelling at each other (and what would we all do then? hide?). But if it was YOUR boss up there, and s/he HAD just let the point drop, what would you think of her/him? I think a teeny bit less, because it would show that they weren’t up on the latest information.

The only way out of the discussion was for one person to agree to disagree. And to be honest, I don’t recall which mentor first agreed to disagree. But if one had conceded the point, I definitely would have remembered that.

I believe that is the kind of personality that you need to have in a place of authority. A little bit stubborn. Given, you have to be well informed and a critical thinker to support your stubbornness. But someone willing to speak up and drive at making a good point is key in a leadership role.

How many times in your life do you look back on a team situation gone wrong and you think, if only XYZ person had listened to “my amazing advice”, the crisis would have been averted? Well, it was your fault that you didn’t yell loud enough and make a good enough argument for your advice to be heard! You were probably right, but you weren’t effective.  I think that is why a leader should have this “bossiness” trait. It is darn useful.

I think anyone who starts a company comes across this issue at some point: when to choose to be a pain in the patoot. With iTipArtists, Mary and I struggled to put together legal agreements. We didn’t know how to start. We met with mentors and lawyers but even after doing that we found we needed to understand what how to create an agreement on a truly fundamental level; we needed to hack through the painful process together for at least a few days. But it seemed that there was always something more important, more pressing to do when the two of us had precious time to meet. I tried to bring up the issue a number of times, but I didn’t do so effectively. If I had, we would have completed the agreements. I should have pressed the issue, even if a tad socially uncomfortable for both of us. We would have come out better for it.

Maybe it all comes down to confidence in being right. I know we all have our comfort zones about speaking up, but I am deciding right now if there is a 90% to 100% chance I am right about something, I will speak up in the future, and be stubborn about it. I think this is also good motivation to keeping up on reading and listening well to others; to make sure I have that 10% “margin of being right” in sight most of the time.

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