Our final class for ES569 at the Ross School of Business invited entrepreneurial rockstar Jeff Williams to talk to the class about his story. Jeff has built several life sciences companies & led 1 company through an IPO & sold 2 for hundreds of millions of dollars. Some of the advice he gave to the students:
- Stick to your mission statement. Keep it broad enough so you can tweak things if need be (e.g. product may look different than initially thought)
- Pick a large & rapidly growing market. This means there is opportunity for new entrants & VCs invest in companies with multi billion dollar opportunities. Plus, in growing markets you can capture growth instead of relying on solely stealing share.
- Identify a significant opportunity in that market. Have a deep understanding of the market so you know how you’re going to enter. Form a plan describing how you’re profitably going to exploit the opportunity. Strategically think about how the product will get you to revenue.
- Basis for a strong business model = low cost product/service & high margins!
- Know what the technology is good at & not good at, but don’t become enamored by it.
- Strategic partnerships are grey area. Pursue them so you can see if they will meet the needs of the company. Make sure to know the tradeoffs & what you want to get out of the partnerships (e.g. cash, distribution, credibility)
- “You can’t have too much money” especially if you’re a first time CEO. You’re always going to need more money than you think you need.
- Investors won’t squeeze you to very little ownership because they want you to be motivated by the potential to make a lot of money.
- “Build best team you can as soon as possible”. Sometimes building the best team means replacing yourself.
- Match business strategy with financial pro forma. Really think through drivers of business. what will increase gross margin?
- Stuff always goes wrong. Learn from it.
- Resource allocation becomes priority when you get to 10-15 people & you can’t do everything yourself. Get out of the weeds & focus on the bigger picture as the company grows.
- Implementation is more important than strategy.
- “VCs don’t owe you anything.” No entrepreneur pitching deserves money. Once you raise money all that matters is results.
- Do your homework. When raising money, research the VCs.
- When is the right time to sell? When you’re a VC funded company, you’re always for sale.
- Companies fail when you don’t think about the business model, competitive advantages for the long term, & when the technology isn’t reasonable. Always be on the lookout for what you should be focused on because so many things can go wrong.
Since Jeff has been successful he was brought on to run companies (& make them successful). He has a reputable track record & in the words of Tom Porter (& according to many) “The way you have the most power is to be successful”
MEL aka Venture Gal