The Hard Facts of Entrepreneurship
How Does One Become an Entrepreneur?
Bay McLaughlin, Co-Founder and COO at Brinc.io at the hardware accelerator, education platform, and product development studio, ‘Brinc.io’.
Bay went from the US east coast to Hong Kong via small start-ups and built a division at Apple. We talk to him about what makes an entrepreneur, Silicon Valley, and the tech scene in Asia.
How Does One Become an Entrepreneur?
Entrepreneurship has become so hyped that most people question themselves and ask if they have what it takes all because they aren’t a big tech giant in Silicon Valley.
You don’t hear the backstory.
You often don’t have an amazing support system or people to learn from. You just work very hard at it. I drove across the States to San Francisco and started from there, and luckily enough got my start. No one was going to fly me out as a 22-year-old so I just went.
You are an entrepreneur and it doesn’t make a difference if you are a VC-backed tech company or just a guy running a business from your local coffee shop.
After taking my shot and rolling with the punches I did make it to the holy grail: Apple. I had the perfect life in many ways and was living the dream but suddenly I could see the future in Cupertino in a glass office, so I left.
The entrepreneurship spirit had taken a hold of me and I needed to be back in the game.
My wife had the idea to move to Asia which was great because most people in Silicon Valley don’t leave to move to a foreign country! No one leaves Silicon Valley! I wanted to be this conduit to connect Silicon Valley to Asia and China.
What Are the Qualities of a Successful Entrepreneur?
Entrepreneurialism is one of the hardest ways to make money. The average age of an entrepreneur is 37 to 38 years old and many young people don’t know that.
Also statistically you are very young after college. On the other hand, if you are in your 50s you are the most likely to succeed. So don’t buy into the media hype of being a young mogul, or get put off by failure. You need to support people to follow their dreams and also take leaps of faith.
When we formed Brinc.io, IoT (The Internet of Things) was getting massive and the only place it can really be executed is in South China, not Silicon Valley. The power is really residing here at the moment in terms of IoT. The technology has to be ready as well for your idea to work.
But you also need to have an instinct and it is a fine line between drinking your own Kool-Aid and on the wrong side of history, and being a visionary.
At Brinc.io we see patterns now, so I think a strong attribute is to be coachable and listen to the market. Tenacity is a good attribute, but what is even better is being coachable and open-minded to things versus just possessing sheer determination.
How Important Is Accounting and Finance to Your Business?
I have two degrees in accounting and actually had an offer from KPMG before fortunately moving to Silicon Valley!
Joking aside, accounting and finance are essential, but I’m not sure that anyone really loves finance at all. It is important that these disciplines allow you to do other things.
It’s a reason why we build tools and a cash flow model that we give out for free which is used by 1,100 other companies.
We kept seeing this problem and realised just how critical cash flow management is for start-ups. Silicon Valley has this ‘M.O’ (Modus operandi) of don’t plan, just do.
That worked ten years ago, but now start-ups need business plans and you need to know how to reverse engineer the game. Cash flow is the center of the business because strategy and business all come from a cash flow model.
What Kind of Culture Should Budding Entrepreneurs Embrace?
You need to ask other people: ‘what can I do to help you?’ But you don’t hear that very often.
People have ludicrous amounts of capital, and if that is you I would encourage you to mentor a start-up, talk to a high schooler.
The culture of start-ups should be ‘what can I do to give or help’ and also, in the grand scheme of things: ‘what are we doing this for’? You might have rivals, but you’re not going head to head for the same customer and the same funding, at the same time.
The ethics of the game are more important than the actual game.
This sharing culture can help entrepreneurs because you don’t need many fancy things to start a company now as everything has an app, API or service, and you can come up with an idea and get it off the ground immediately.
You don’t need a big office, you just need to get started, focus on the business and customer and make sure you have something that makes sense.
If you’re not frugal as a start-up, you are an idiot. Your customer won’t care how you got there, it just needs to be a tool that does the job.
If I Am Starting a Company Today, What Should I Ask Myself?
If money is your goal, you just won’t make it.
Every single time we talk to an entrepreneur, we ask: ‘why are you starting a company?’ ‘Why are you solving this problem?’ Most people, if they tell you about the solution, then turn away, because they are excited about the technology or the solution.
If they are not dedicated manically to solving a problem, they won’t have what it takes to get through the bad times.
You need to have this deep reason to be an entrepreneur because 80% of what you do will be bad times for the first five years and it’s not easy for a long time.
How Should Entrepreneurs Manage Their Investors?
I always say, if you can do this without taking money, just don’t take the money.
The best pitch deck I’ve seen is one page that says: ‘I don’t need the money!’. When you don’t need it, the money will always be there because everyone will want to be involved.
It’s always best to be profitable and sustainable but that’s challenging in our world because physical entrepreneurship is expensive. It’s hard to get someone to buy something when you don’t have the capital to make it. Profitability means you can play forever.
Keeping investors aware is crucial and the worst thing you can do as a founder is letting them know when things are too late to repair because you will be known as the guy that didn’t manage his cash flow.
Do your research, come out as prepared as possible, be a problem solver and communicate as best you can.
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