Kauffman Foundation Executive Stresses Understanding Market and Building Network

Bo Fishback - Photo courtesy Kauffman Foundation

Bo Fishback, vice president of entrepreneurship at the Ewing Marion Kauffman Foundation, gave practical advice to entrepreneurs gathered at the 2010 Nebraska Summit on Entrepreneurship.

Fishback, who started his first company when he was 13 years old, said there are two things that matter disproportionately in a startup’s life: your market and your network.

“The importance of understanding your market cannot possibly be underestimated,” he said.

While great businesses start from great ideas, enthusiasm and passion, he said, it’s helpful to “step back” from your idea and really understand it. If you can talk about where you think your market is headed in the next five years with other people educated about that market, he said, you’ll increase your chances of success.

Video: Bo Fishback, The Big Picture

“It’s easier to get smarter about this stuff, to learn about what you’re getting into, than it’s ever been,” he said. “So don’t let that pass you by.”

In figuring out your market, you need to get granular, he said. Figure out the number of people who could and would buy your product. Multiply that by the price of your product. Multiply that again by the number of products you can sell to each customer.

“Period. There is no other such thing as a market if you are a startup,” he said.

Real, credible market information comes from customers, he said. You can start by finding one or two, buying them lunch, and asking them what would make their lives easier.

A ten-person survey of potential customers is worth more than any market research you can buy, he said.

Your network is probably the most important asset a founder can have, he said. Entrepreneurs must listen to everyone and decide who to follow.

“You have to live like a sponge and know which parts to squeeze out,” he said.

He said you should get a team of advisors all smarter than you in at least one definable area that can help your company succeed. Find at least one mentor who has previously done what you’re trying to do, he said. Get a world-class person involved early on who will attract others. Look for partners.

If you don’t go out and find them, they will not show up to ask to help, he said.