Lessons Learned: Eric King says all the warnings are true
Eric King, the chief marketing officer of Clean Power Finance, doesn't sugarcoat his advice for startup entrepreneurs.
"When you hear that it's going to take twice as much time and twice as much money as you thought to get to profitability -- (it's) all true," says King, who is also a managing director at the merchant bank Arena Group LLC.
And where do all those unforeseen expenses come from?
"People tend to underestimate salary costs or, conversely, they hire too many people," King says.
In 2004, King co-founded FastFind.com, a lead-generation startup serving the financial services industry where he served as president and chief financial officer. Less than two years later, the company was sold in a transaction that rewarded its backers with a return of three times invested equity.
In this Vator.tv interview, King tells Ezra Roizen that startup executives should find "someone with deep industry knowledge" when selecting investors, because even "great VCs" can't help much if they invest outside their areas of expertise.
To see King discussing Clean Power Finance, click on this interview. To see his Vator.tv profile, click here.
Also, King echoes a theme we've heard from a long list of entrepreneurs: be honest with yourself about the products you're offering.
"If you have two or three customers saying they're not interest in what you're selling, don't freak out. But if you have 20 tell you that," it might be time to take a hard look at what you're selling.
"Be open and willing to listen to people. People want their problems solved, and they'll pay you good money to do that. But make sure your solutiion isn't a $400 solution for a $4 problem."
Lastly, King explains that hearing 'no' from potential customers is at least better than hearing nothing.
"It depends on who you're selling to. If you're selling into Fortune 500 companies, the sales cycle may take a while. If they've never heard of you, you're going to have to find other ways to get in front of people."
