Jeff and Rich Sloan developed their appetite for entrepreneurship as kids at the dinner table. Every Monday, their mother would read them fascinating details of inventions in The New York Times patent section. She often told them they should try to get a patent someday, and they took on the challenge.
"We were on a mission," Rich says.
Several years later, after collaborating on ventures that included buying and selling HUD homes, starting up and selling an Arabian horse-breeding operation, and creating and selling a consumer products import company, they succeeded. The brothers, who graduated with degrees in English (Jeff) and Asian history (Rich) from the University of Michigan, developed and in 1990 successfully licensed the Battery Buddy, which prevents car batteries from dying.
That creation drew the attention of inventors from all over the country, who started seeking their advice. Over the next five years, Jeff, now 45, and Rich, 38, helped license products and then expanded to help more than a dozen technology companies write business plans and attain financing. Together, with other angel investors, they provided more than $70 million in financing for entrepreneurial ventures.
The Sloans decided in 2002 to combine their knowledge and desire to share their business wisdom at StartupNation.com, described by Rich Sloan as a "candy store" with free entrepreneurial advice through online articles, blogs, e-newsletters, seminars, events, podcasts, a nationally syndicated radio program and their book, StartupNation: Open for Business.
Although intrigued as a kid by the idea of inventing a product, Rich says he had no desire to be in the business world. His idea of corporate America was far from the way he imagined spending his life. "No way I'm going to subject myself to that cube-farm environment," he remembers thinking. "No way I'm going to punch in and punch out of life every day." But then he realized he had a false perception of the business world.
"I learned that entrepreneurship is extremely creative; it's as much about paying attention to the numbers as it is about being innovative-creating, breaking through, being progressive," he says.
It also helped that Rich saw a passion in his brother, Jeff. "He's a relentless natural entrepreneur," says Rich. "Over the course of his life he hasn't put a difference between what if and what is."
The brothers believe that partnerships-whether between friends or family-are positive, especially for beginning entrepreneurs. "There are many times as an entrepreneur that you can't find an answer or you are just absolutely fatigued or perhaps downtrodden," says Rich. "That partner plays a key role in picking up the flag from your hand and taking it the rest of the way."
To make a partnership work, it's critical to establish roles, develop respect, maintain great communication and create an alignment of interests so that a win for one person is a win for the other, Rich says. In times of disagreement, those factors can be critical in determining the right move to make.
That's helped the brothers-who sit with their desks facing each other only 17 feet apart at their office in Birmingham, Mich.-ride the bumps along the road. When developing the Battery Buddy, they underestimated how much time and money it would take before reaping the success. "We thought we could commercialize that invention and make a quatrillion dollars in a really rapid and easy way, and of course that wasn't the case," Rich says. "We weren't prepared for years of peanut butter and jelly and years of psychological trauma."
They have had occasional failures. At one point in their entrepreneurial career, they were approached by a large manufactured-home developer who wanted them to create a solution to cinder block foundations. They developed a new system that used mini-pilings instead, although at a higher price. Sloan says they failed to realize that the system took out the middleman, the traditional installer of the manufactured home, which created pricing resistance. There essentially was a revolt among the people who would have to install the home, he says. They eventually abandoned the idea because price sensitivity made it too tough of a sale.
They learned that in building a business, it's important to do as much research as possible to validate the concept. That includes getting as many distinct data points as possible to be confident that you understand the market and are sure that buyers would not only find the solution interesting but would be willing to pay for it. "We were guilty of not doing good enough research across the various players in the chain," Rich says.
The biggest stumble they see entrepreneurs make is buying into their own hype. When people pitch business plans, Rich says they're often blown away by the initiative, but can quickly see that the assumptions about a market, service or product are inaccurate and unachievable.
"As an entrepreneur you not only are the most passionate person, but probably the most intoxicated person when it comes to the merits of your idea or product or your business," he says. "Match that with data wherever and whenever possible."
Just as they've used the Internet to create a destination for entrepreneurs, Sloan believes new technologies present huge opportunities for potential business owners. Businesspeople can legitimately compete from home or a coffee shop, interacting with customers, staying in touch with salespeople, managing inventory and viewing Web traffic.
"The table is set for entrepreneurs to get into the business," he says.
Jeff and Rich Sloan will speak in Sarasota on Thursday, Aug. 31 at the 2006 Technology Conference: Integration at the Crossroads, to be held at the Hyatt Sarasota. The technology conference for small- and mid-size business owners, students and technology professionals is presented by the Young Technology Alliance in partnership with the Greater Sarasota Chamber of Commerce, Manatee Chamber of Commerce and 82 Degrees Tech. Registration information is available at www.sarasotatechconference.com. Tickets to the full-day event are $125, with half-day passes also available.
10 STEPS TO OPEN A BUSINESS
1. Create a life plan.
Before you jump into a new business, decide how you want to spend your time now and in the future. For success, figure out your priorities and passions.
2. Choose a business model.
Find a business model that fits into your life plan (home-based, e-tail, brick and mortar, franchising etc.).
3. Create a business plan.
Carefully develop a business plan that brings together your personal and professional goals. You'll be more successful and more gratified in the future because you'll be doing something you love.
4. Select a structure.
Choosing the best one depends on the specific needs of your business. Understand all the options available to you. Evaluate the advantages and disadvantages of each business formation, paying special attention to the tax implications and government formalities.
5. Create key assets.
Whether it's your company name, logo, latest invention or best-selling product, take steps to secure your ownership rights.
6. Find the funding.
There are many ways to finance your business, including credit cards, bank loans, friends and family, angel investors, venture capitalists, government grants and strategic investors. Be sure to choose a source that fits you best. Ask for the right amount from the right source at the right time.
7. Organize your logistics.
Having your books in order, your contracts buttoned up, your money safely managed and your downside covered are each critical to your personal and business future.
8. Find great people.
The impact of a single team member can be enormous. Every person you add to your team must be a star. First, define what a star is within each role of your company. Then you can go find them.
9. Establish a brand.
Developing a brand is more than just deciding on a name or picking some colors. It's developing an image and a personality that embodies what your company is and does.
10. Market and sell.
Identify and study up on your target audience (e.g. what they like, what they need, how they live and what they want) and develop a marketing message that will resonate with them. Once you have a grasp of how to talk about your product to your target audience, maintain that message consistently throughout your marketing efforts.
LEVERAGING THE INTERNET
Top ways small-business owners can use technology to drive business and save money.
1. Make your Web site more interactive by adding surveys, guestbooks, auto responders and downloadable documents.
2. Add a shopping-cart feature to your Web site to take orders online.
3. Order supplies online and submit invoices by e-mail.
4. Research your competition by checking out business and industry sites.
5. List the Web site in search engines to drive visitors, and freshen it up frequently with timely content.