A talk about the Risks in a New Venture by Randy Adams at Stanford University's Entrepreneurship Corner.
Randy Adams, founder of AuctionDrop, talks about his background, including growing up in Maine, attending MIT, and his realization of his love of creating companies.
According to Adams, the biggest competitor of a start-up is a large established company. Their size alone is enough to destroy a young company, says Adams, but large companies are at a disadvantage because they're slow to act and avoid risk at all cost.
Adams defines the meaning of vision. He also explains the importance of vision to the success of a company.
Adams talks about how the creation of a plan with a logical set of steps is essential to creating a successful business. Within this plan are attainable milestones and the knowledge that as a small company, flexibility is still an option.
Once a plan is established, it is imperative to act on it. As Adams says, most good ideas die for lack of action.
Randy has learned from years of starting companies that he has developed an addiction to risk taking. A benefit of young companies is that it is easier to take risks because of the size. There may be nay-sayers, but Randy's advice is to ignore them and continue on with your plan.
Dedication and hard work are essential in making anything successful. Sacrifice may be necessary, and it's important to set priorities, but never lose passion.
Failure is a good thing, says AuctionDrop's Randy Adams, as it can be a much needed catalyst to make the budding business person strong, humble, and innovative. Think of it as a reset, he says, and something to make one re-evaluate and reset a current course of action. And furthermore, he advises, never, ever quit. Stick around until you get thrown out. And if you get thrown out, compete.
Will companies like Yahoo and Google become large companies who grow stagnant or will they continue to innovate and remain competitors of young start-ups? Randy answers this questions with examples of company culture.
What keeps Randy up at night with his relatively young company? He states frankly: revenues. Randy discusses a new partnership AuctionDrop has created with UPS Stores, and how they are working to take advantage of the potential within that partnership.
Adams talks about testing the viability of a new technology with potential customers. He recommends entrepreneurs conduct polls and surveys to determine whether there is demand for the technology in the market. Never commit to a large development effort without prototyping the technology first and taking it to a potential target market, he cautions.
Amidst all of the bad stories circulating about venture capital funding, Randy insists that there are many VCs who are truly interested in the success of a company and will treat entrepreneurs fairly and with respect.
Adams advises that new entrepreneurs ask themselves, what's the worse that can happen? and prepare for it. Hope for the best, but become comfortable with the possibility of failure, he says.
Using AuctionDrop as an example, Adams explains why it's extremely hard to change consumer development.
Adams doesn't worry as much about competition from other start-ups; he views that type of competition as validating the market. It's direct competition from the big companies that is frightening, he says.
If consumers are so unwilling to change, why did FedEx gain popularity? Adams asks. He talks about consumer adoption methods and why some things work (internet transactions) and some things didn't (Tablet PC).
Adams answers the question: Will someone with experience and credentials have a better chance of securing a venture finance deal than someone who is new and inexperienced? He believes that a good idea will always prevail. Other factors are important to consider, including team, but the right idea presented to the right VC will win.