Venture capitalist and marketing guru Guy Kawasaki has a multifaceted view of business. In his more than three decades in the tech industry, he has held the roles of entrepreneur, venture capitalist and adviser. In this rousing speech, he leverages his experience to warn Caltech’s aspirational young minds of the most common stumbling blocks fledgling entrepreneurs face. Kawasaki is a straight talker who offers a no-nonsense outlook on starting a business.
Entrepreneurs often overestimate their potential market share and the speed with which they need to scale up.
Over his three-plus decades in the technology industry, entrepreneur and venture capitalist Guy Kawasaki has seen wannabe entrepreneurs make the same errors over and over again. He offers sage tidbits to help rookies sidestep the most common entrepreneurial traps. First, naive start-up founders tend to “multiply big numbers by 1%,” assuming that it’s easy to capture a small fraction of a large market. To illustrate, imagine a start-up that manufactures dog food. The founder might hypothesize that America has a population of 300 million people, 25% of whom have a dog. If 75 million dogs eat two cans of dog food each day, that’s 150 million cans. A 1% share of this market would be 1.5 million cans per day at $2 per can, which equals $3 million in sales each day. Such math is foolhardy. Not only is it difficult to capture a fraction of a market, but investors don’t want to hear such limited ambition.
Moreover, fledgling businesses tend to
Guy Kawasaki is a venture capitalist, marketing guru and author of several books, including The Art of the Start.