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Cocktail Napkin to Startup (DIY Part One)

May 16, 2006

Entrepreneurship Post from the Texas Startup Blog!

It all started with a post from Nick Douglas I wrote called, “Got a great idea?  Join the Napking Club.”  This is the first in a series of posts I plan to post on how an idea can get from a cocktail napkin to reality.  “How do you do it?” That is a question I hear all of the time from people interested in starting their own business. The answer seems so simple to me, I never really undestood why people asked it until recently. What changed? It all started when we took a cold hard look at our business. We really had two lines of business (a) investing in other people’s ideas and businesses and (b) turning our own ideas into businesses. We figured out that we were failing miserably on (a) but having great financial and non-financial success on (b). In one week we decided to stop investing in other people’s ideas and focus exclusively on our own. To better reflect our new mission we changed the name of the company and disassociated ourselves from the VC or private equity business. Clearly some people know how to invest in businesses and other seem to know how to start them. We decided that we didn’t fit in the former, but instead into the latter group of people.*

That realization helped me understand why so many people asked me, “How do you do it?” We spent almost five years talking to entrepreneurs with ideas who couldn’t get their idea off of the cocktail napkin and into the hands of customers. Throughout that period of time we found a few we decided to fund, but 99% of the time we found more reasons not to fund their businesses. I decided to document how we take an idea from a cocktail napkin (literally) and turn it into a business (no promises on whether or not it will be successful).
*I think our shift was also a realization that most of the businesses we were most interested in didn’t need our money. This is a something new and exciting for entrepreneurs. We were so excited we decided to focus on being entrepreneurs than investors.

Written by Alexander Muse · Filed Under Blog 

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  1. Bill Joyce Says:
    August 1st, 2006 at 3:23 pm

    Alexander:

    It is sad that you and your team have turned away from the VC side. What I have read here in the eleven or so posts shows a very deep logistical understanding of product development on the technical side.

    The only difference in VC work is the same logic needs to be added to the product side (added value and retained market).

    Texas needs creative people to bring smart products to market. Don’t walk away form the cowboy with a new idea.

    Bill Joyce
    Vision Management

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