If there is anyone in this town qualified to give advice to entrepreneurs, arguably, it is Rich Langdale.
In 1986, while a student at The Ohio State University, he sold his car to invest $5,000 in a startup computer supplies business. Over time, that business −Digital Storage− expanded internationally thanks to various partnerships, joint ventures, and wholly owned subsidiaries.
Since the mid-80s, Langdale has founded eight companies and co-founded, acquired, or invested in several others at Columbus-based NCT Ventures, where he is a managing partner. As if all that wasn’t enough, he co-founded and developed the Center for Entrepreneurship at OSU in 2001.
Herewith, Langdale, an Anaheim, Calif. native, shares the questions he is asked most frequently about business− and his answers, of course.
1. When do I know I’m ready to make the leap and start a business?
After lots of thought and created methodologies, I have landed on a very simple answer: “When you stop asking the question!” Basically, I am saying that the entrepreneur should come to a point where they have done enough research, learned enough about the market need, tested the value proposition with enough people…and now the business idea feels like an opportunity and not a risk.
2. What is the “Next Cool Thing”? (Since we were brash enough to act like we knew when calling ourselves NCT Ventures.)
We generally look at trends that solve big worldly issues, so most people already inherently know the answer to this by just reading or watching the latest business news. Topics like energy, personalized medicine, green this or that, and demographic trends in emerging markets clutter the news. The key is for the entrepreneur to look at how their specific skills and passions can be applied to one of those big worldly issues. For instance, NCT believes we understand marketing, logistics, and technologies that drive efficiencies, so we look for ways that these skills can be mapped against the list of market opportunities. Where they match up, we invest.
3. What are the most important traits of a startup entrepreneur?
Most people immediately think of passion, risk taking, skills. But my belief is that the two most important traits of an entrepreneur are ignorance and no money. The good news is most of us have these traits when we’re getting started. I certainly did! Ignorance forces us to ask questions of the market, specifically our customers and vendors. No money forces us to bootstrap an idea, asking the people that will benefit the most from your success −again, those customers and vendors− to take some risk with you. This can be done with extended terms, prepaying for products or services, equity participation instead of cash expenses. The most important thing that happens here is the market validates your ideas and turns them into a real business.
4. Where can I get some cash?!
This is one of the most difficult questions to answer because it starts with, “It depends.” First and foremost, you should do whatever you can to validate your idea with the bootstrapping process described in my “no money” answer. We are also lucky to have a very organized technology support infrastructure and angel organization in Columbus− TechColumbus and Ohio Tech Angel Funds. These are great sources for the most rare commodity in the business−smart and fairly priced capital. I usually tell people, “Never ever take money from a Venture Capital.”
The only exception to this is when you have a business running with a proven business model− you can put a $1 into the machine and get several times that out, there is a huge market, and you need to move quick. Before you call any of us, though, I would make sure we invest in the market you are serving− unless you just love rejection.
5. Where do I go to figure all this out?
This question I got so many times, it drove me to teach and to set up a thoughtful structure for directing the entrepreneur. After building an award-winning curriculum at The Ohio State University, along with a lot of smarter people than myself, I also invested in a business that uses these strategies to help entrepreneurs with all of the above. Probably the best thing I can do to wrap this all up is suggest anyone who is interested in exploring these thoughts further go to VentureHighway.com and check out the roadmap they have for success.
To learn more about NCT Ventures, visit NCTVentures.com.