Hi, I’m Chad Chelsome…

…and it’s just great to see you all here tonight.

You know, I look at the stressed, tormented look on most of your faces, and I remember it all so well. Yes, when I first started out as an entrepreneur, I too had that same haunted – and, let’s face it, unfunded – look for at least two, maybe even three days. It was a living hell, a nightmare that had no end… until, that is, I found my amazing entrepreneurial success mojo.

That is what I want to share with you tonight. And frankly, compared to my $1495 per hour private entrepreneurship mentoring services, the £249 you’ve paid to attend this evening is nothing less than a downright steal for the intensely focused information each and every one of you will download into your grimly aspiring startup brains.

Yes, you may have walked in here as a rag-tag bunch of nontrepreneurs, but I personally guarantee you will stride out of here with the total confidence and insane clarity that made me and my peers – Branson, Jobs, Dyson – nothing less than unstoppable business dynamos. Monetizing will move from being a buzzword in your presentations to an entire way of life.

All the same, people often ask me what gave me my first big break in business – my $11.5m trust fund, my Harvard MBA, my billionaire father’s Rolodex, or perhaps my honorary membership of Yale’s Skull & Bones Society? Actually, it was none of the above.

My first fortune came about because I despised my uncle Max so much: it’s not that he’s a rich sleazeball, it’s just that he’s never even had the decency to try and hide it. So, when he lost $750,000 investing into a fake hedge fund, I was filled with shining admiration… for the guy who ripped him off. In short, I wanted to be that hustler. (Well, apart from the bit where Max had him garotted in an alleyway in Reno in 2008, that is.)

Very quickly, I realised that this meant one simple thing: that I had to be an entrepreneur. More specifically, I had to be the kind of entrepreneur that is looking out for rich foolish marks and selling them the biggest-budget fool’s gold ever invented – yes, I had to be a tech entrepreneur. That was the career path that beckoned – and it proved to be the start of everything good that has happened to me since.

My message to you this evening is therefore loud, clear and palpably in your face: that the glorious, pampered, self-indulgent life I’ve enjoyed as a successsful top-tier tech entrepreneur is yours for the taking. All you have to do is get with the programme – and I’m here to show you how…

[…to be continued…]

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Hardware startups and pound shop chic…

I spent yesterday lunchtime fettling a ping pong ball – and I strongly recommend that other hardware startups do much the same!

OK, here’s what happened. I was doing some tests on a well-known Aptina image sensor (basically, I’d noticed that its analogue gain circuitry wasn’t quite as linear as its datasheet claimed, and hence wanted to build up a calibration table to correct for that non-linearity): and the way to do that was to create an diffuse, evenly-lit captured image. Hence I decided to take half a ping-pong ball (as per the ones psychologists use in Ganzfeld experiments) but placed over the lens rather than over the subject’s eye.

Having previously cut the ball in half with my Swiss Army knife for a similar hardware hack, all I had to do was to fettle down the half-ball’s rim so as to avoid any light leakage around the edge (because I was testing with a fisheye lens). All of which added to my puerile linguistic amusement: really, it’s not every day you get paid to fettle the rim off your balls. And yes, it worked really well: I even have a nice scatter graph in Excel to prove it.

And then to stress test the same sensor in low light conditions, I took a video camera neutral density lens filter that my co-worker Piers H had kindly brought in a few days before, and duct-taped it onto a clear lid to create a pretty good night-time simulator for the same fisheye lens. Two ultra-cheap hardware hacks in one day!

The more substantial point is that if you are in a hardware startup, and – as is often the case – find yourself needing to quickly hack together some kind of super-temporary test rig for some feature or other, what you typically need is a bit of cheap plastic in a certain shape, size and transparency. And where better to go to find odd-shaped bits of plastic than a Pound Shop? A quick wander round Poundland (or even shops like Wilkinsons if you find yourself really stuck) and you should find something for a pound or two that will do the job. Subtractive high-street hacking rocks!

Ultimately, why buy a 3d printer when you can buy in cheap imported plastic rubbish and fettle it down until it fits? For hardware startups, the strategic answer is clear – don’t move to a tech cluster, move to a neighbourhood full of pound shops. By that measure, it would seem that Redhill ought to be full of hardware startups, though I’ve yet to see any others… perhaps I’m just ahead of the curve, yet again. 🙂

Overprediction, the entrepreneurial curse…

Over the last few days, I’ve started to think about writing a book for entrepreneurs – a proper, meaty, practical book that helps you see through the fog of the business world around you (and believe me, there’s a whole lot of fog out there). It’s early days just yet, so we’ll all have to see how (or indeed if) this book takes shape. (As with all such projects, the only sure thing is that holding your breath waiting for it would be A Very Bad Idea Indeed.)

All the same, big books need to address big questions: and hence the big question I’ve been banging my head against is… why is it that nearly all startups fail? Or rather, what’s the big problem with starting up? It struck me that if I were to assemble, arrange & present all my thoughts in such a way as to answer that near-universal question in a pragmatic & accessible way, I’d have a book that would literally be worth its weight in gold (at today’s gold price, errrm, round about £15K for the weight of a 250 page softback).

Now, even though the following is only a part of a much larger picture, I think it’s fair to say that one of the biggest curses that plague entrepreneurs is overprediction – that is, not only predicting how people (whom you haven’t met or fully researched) currently behave, but also predicting how ecstatically & differently (in your favour) they’ll respond when presented with your game-changing Android-powered CyberFruitBowl 3000. Oh, and predicting how potential funders will evaluate what you’re doing, too.

You think that’s a reasonable ask? Oh, come off it! The world is a complicated place, and people have wildly varied & complex reactions to even simple things (yes, even to your lovely CyberFruitBowl 3000). Yet at the same time, there is an enormous pressure on entrepreneurs to present what they do with utter certainty (and using TechCrunch-style hyperbole), not only when pitching to angels but also when talking to everybody else.

In just about every useful sense, this yields an abysmal disparity – the ever-widening gap between (a) the way the world really works and (b) the overwhelming social compulsion to misrepresent that in order to paint a picture of your company as a credible tech startup. Being brutally realistic, this disparity will either crush your moral spirit in the short term or come back to financially bite your hairy yellow arse in the medium term (startups don’t do long term, of course).

Regardless, this means that what entrepreneurs pretty much have to do is to overpredict how things will work out for their development & product/service rollout, to a degree that wouldn’t even be realistic for a company that was already a market leader. If Apple / Samsung / Vodafone / Virgin wouldn’t put it on a slide, why would you?

In a way, the one good thing about the kind of discourse espoused by Lean Startup evangelists is that it focuses on genuinely not knowing anything (which is true for most entrepreneurs), rather than pretending to know everything. Of course, reality always lies squarely between these two extrema: but what would a Streaky Startup – i.e. neither excessively Lean nor foolishly Fatty – business plan look like?

Why ‘Until’-scripts lead to startup death…

Unless you have heard of Transactional Analysis (‘TA’), you probably don’t know that an “until script” is a behaviour (anti-)pattern with the (somewhat damaged) subtext “I can’t be happy until [insert unrealistic condition here]”. Basically, this is a fake justification people use on themselves to try to avoid taking responsibility for their own happiness, e.g.

• “I can’t be happy until I get some kind of parental approval” – just about every child ever
• “I can’t be happy until I get to the end of my degree course” – just about every student ever
• “I can’t be happy until this project has finished” – just about every programmer ever
• “I can’t get a proper contract until my probation period ends” – just about every employee ever
• “We cannot prosper without an extended period of austerity first” – just about every government in 2012

Of course, you don’t have to dig very deep to find the entrepreneur version of all this…

• “My startup can’t prosper until it gets funding“

I suspect that this points to something deeply broken in the contemporary entrepreneurial psyche. For at heart, the damaged emotional neediness of pitching for angel funding is nothing less than a über-until-script, i.e. Entrepreneur X can’t be happy until he/she has put together a funding round.

At its most excruciatingly awful, then, entrepreneurs pitching to business angels are pretty much on a par with unhappy children trying increasingly desperate measures to get attention from grossly neglectful parents. Realistically, in neither case is there a strong likelihood of a heart-warming outcome: however hopeful or optimistic you may be, positive thinking ain’t going to shift that particular mountain.

So… if “until scripts” (such as pitching for funding) aren’t any good, what’s the alternative?

Well, I think all of this points to one simple (yet brutally unfashionable and no less hard to swallow) truth: that any business plan that involves raising funding as a necessary step to operating success is inherently broken. Bust. Cracked. Dead In The Water. NBG.

Rather, the best paths to business success all steer their primary routes through self-reliance and customer-focused organic growth – your primary focus should be on building modestly self-sustaining businesses, yet ones that also have the capacity and vision to grow and scale rapidly in a best-case scenario. Is this do-able? Gosh, yes! But you’ll first need to unlearn the business school “lesson” that external funding is the only way to build a successful business – when in fact, it may well be the worst.