StartupForLess

[1] Why Startups Fail and Why We Should’ve Too (by Denny K Miu)

Editor Profile - Denny K Miu was the founder and former CEO of two startups, Gigamon Systems and Integrated Micromachines (now Touchdown Technologies). Denny has extensive experience in developing technology, products and business relationships. He has been a Professor, an engineer, an entrepreneur, a team leader as well as an individual contributor.

Denny is currently the Executive Editor of LoveMyTool.com, his third start-up. You can follow him on Google Buzz or subscribe to his RSS feed.

Two years after we launched our product in May 2005, my previous startup was able to acquire our 150th customer. Our sales continued to grow organically, from new customers as well as from existing ones who kept coming back for more. In addition, we announced that we had achieved profitability for six consecutive quarters.

By all measures, Gigamon was a spectacular success which was all that more remarkable consider that we had taken no VC money. Like so many entrepreneurs before us, the six co-Founders of Gigamon built their company the old fashion way. We bootstrapped the product development effort by dipping into our own pockets (or more accurately, our wives’ pockets) and by not taking salaries for two years; and after the product was ready, we secured minimal but adequate amount of working capital from an angel investor and not take salaries for another year.

Having spent the last decade and more as a struggling entrepreneur, I understand all too well the twin irony of accidental genius and reluctant warriors; nothing out-performs good execution like good fortune. In all honesty, the fact that Gigamon had taken no VC money was not part of my original financing plan. Between the summer of 2003 and the fall of 2004, I must have visited nearly 50 VC’s, all of whom had turned me down. So my company succeeded in spite of my initial failing.

Keep in mind that I was not unfamiliar with raising VC money (I raised $65 million for my previous startup) and I was mentally prepared that 2003 was probably the worst time to raise money (having just endured the rolling catastrophes of Asian financial crisis, Y2K, dotcom bomb, telecom burst, stock market crash, 9/11 attack, war in Afghanistan, SARS, launch of the Iraq invasion, outbreak of avian flu, etc.). But the uniformity and the abruptness of how I was turned down by every single potential investor I spoke with still startled me.

Obviously I respect the VC’s decision and I believe they have made the right one. I was not spiteful nor do I have any need for vindication. I believe VCs have an important place in our financial eco-system (as a financial instrument, their successes ultimately contribute to our 401K’s) and I respect their profession. In fact, if deem necessary and appropriate, I would have no problem taking money from VC for my future startups.

It is just that in general, I find it much more educational and rewarding if I refrain myself from demonizing others and instead focus my energy on learning from my own failures as well as from my successes (accidental or otherwise).

So in that spirit, over the last four years, I had spend much awaken hours soul searching and I have summarized what I learned in the following which were the top three reasons why we were turned down by the VC’s and why we should have failed as predicted had it not been for the good timing of the ever changing market and the enduring quality of its team (intelligence, integrity and inventiveness).

Top three reasons why VCs were convinced that we would have failed:

1) We did not have a rock star CEO
2) We were all engineers
3) We contradicted Gartner

[2] How to Turn Your VC into Your Worst Enemy (by Denny K Miu)

Editor Profile - Denny K Miu was the Founder and former CEO of two startup companies, Integrated Micromachines (now Touchdown Technologies) and Gigamon Systems. Denny has extensive experience in developing technology, products and business relationships. He has been a Professor, an engineer, an entrepreneur, a team leader as well as an individual contributor.

Denny is currently the Executive Editor of LoveMyTool.com, his third start-up. You can follow him on Google Buzz or subscribe to his RSS feed.

TEN YEAR JOURNEY

Prior to starting Gigamon in 2003, I had started another company and prior to that, I was a faculty member at UCLA. I left academia in 1995 because I was interested in “learning” to become an entrepreneur. Being a technologist, I knew I was a “problem-looking-for-a-solution” but I was determined to find a market for my patented technology.

Since I already knew how to apply for grants from government agencies, I didn't want to fund the necessary commercial product development with potential SBIR contracts. Instead, by learning, I naively had in mind that what I was going to do was to learn to build company from scratch with other people’s money (i.e., VC’s money) because that was what I thought VC's are for.

So essentially I have spent the next ten years satisfying my own curiosity and struggling to figure out what VC (venture capitalist) is all about. In the process, I have raised $65 million in four rounds of VC funding but burned through all but $3 million before I was fired from my own company in late-2002. There were human costs as well.

Between April of 2000 and April of 2001, I grew the company from 8 to 163 employees (interviewed and hired every single engineer) but subsequently had to lay off 130 over the next eighteen months (I could still recall their faces). I remember one layoff was executed just days before 9/11. The same VC’s who complained that I didn’t hire engineers fast enough in 2000 were the ones who cursed me for not terminating them fast enough in 2001.

I believe I did the best I could. When the second plane crashed into the South Tower, I remembered my first thought was “I should have laid off two-third of the company, not one-third.” In retrospect, my gravest mistake was keep thinking that since things could not be any worse, they must be getting better. They did get much worse and eventually they did get better. But unfortunately for my 130 employees, the economy turned around in 2004, not 2002 (Lesson #1 – Entrepreneur cannot afford to be a pessimist but CEO cannot afford to be an optimist).

Over a span of ten years, I have seen NASDAQ rise and fall together with my own paper net worth (to a high water mark of $30 million in late 2000 corresponding to 10% of the post-money valuation of my money-losing startup, the funding of which included an unprecedented $25 million strategic investment from Cisco - enough to pay off the national debt of Iceland in 2000).

I had spend years not taking salaries alternated with months when I was so well paid that I could afford to fly first class. At times, things were going so badly that I had to take out a second mortgage on my house to make payrolls and then at times, things were going so well that I had to fight with my fellow investors to invest more of my own money into the company in order to increase my potential upside (with Cisco as an investor, everyone was confident that a multi-billion dollar acquisition was imminent).

In early 2000, I had VC’s calling me early in the mornings and late at nights to try to convince me to take their money. In late 2000, I was such a rock star that I had one VC (who remains a friend) inviting my wife and I to travel to South of France to dine with their limited partners because I had delivered one of the best IRR (on paper) in the history of their fund.

But aside from 2000, I had been turned down unceremoniously in over 300 VC meetings and most VC’s thought that I stink so badly that they wouldn’t even return my calls. And to top off the comical scale, in 2000, I actually had swarms of VC’s scorning me for NOT taking their money but fortunately by 2001, they were thanking me profusely for doing the same.

In other words, VC's have been my best friends and my worst enemies, in ways that are not always within my immediate control. In the process, ironically, I have come to respect Venture Capitalist as a profession, which I believe is the least understood if not the most misunderstood. And I am convinced that mistakes I have made with VC’s (eventually turning many of them into my worst enemies) were a result of my inexperience as a CEO compounded by a total lack of understanding of who VC's are and what they do for a living.

[3] What I Learned From My Dad Who Taught Me How To Ride A Bicycle (by Denny K Miu)

Editor Profile - Denny K Miu was the founder and former CEO of two startup companies, Integrated Micromachines (now Touchdown Technologies) and Gigamon Systems. Denny has extensive experience in developing technology, products and business relationships. He has been a Professor, an engineer, an entrepreneur, a team leader as well as an individual contributor.

Denny is currently the Executive Editor of LoveMyTool.com, his third start-up. You can follow him on Google Buzz or subscribe to his RSS feed.

In earlier posts, I have written about my experience as a startup entrepreneur, both from the standpoint of how to make your company successful and how to maintain a good relationship with your investors.

Here I focus on an unfortunate part of the journey which is how to recover from a spectacular failure. Please note that I am writing from the perspective of a Founder/CEO which is a very unique breed. If you are a Founder but not the CEO, you can blame the CEO and move on. If you are the CEO but not the Founder, you already know what to do. Being a Founder/CEO means that you have no other marketable skill and when you fail, you're on your own.

The following is what I learned from my recent journey which I dedicate to my dad from whom I continue to draw inspiration.

10) Get up and get up now

This seems obvious and logical but in my experience, getting up quickly after failing a startup is never trivial.

One important difference between “crashing-and-burning as an entrepreneur” and “falling while riding a bike” is that for the former the chain of events tends to be very drawn out (over months if not over years), very painful, very costly, very emotional, very public, involves a lot more people (some innocent and some not so innocent) and could even be self-inflicted (making it that much more humiliating).

So my experience is that after the downfall, I was unbelievably exhausted, both physically and emotionally, which unfortunately tended to cloud my judgment and drive towards misbehavior. But fortunately for me, I had the benefit of a strict old-world upbringing and I could hear my dad’s stern voice demanding that I get up from the dirt. If it weren’t for that, I would have preferred to just lie there and enjoy the warmth of the sun.

[4] Make Money Then Make Meaning (by Denny K Miu)

Editor Profile - Denny K Miu is the Founder and former CEO of two companies, Gigamon Systems and Integrated Micromachines (now Touchdown Technologies). Denny has extensive experience in developing technology, products and business relationships. He has been a Professor, an engineer, an entrepreneur, a team leader as well as an individual contributor.

Denny is currently the Executive Editor of LoveMyTool.com, his third start-up. You can follow him on Google Buzz or subscribe to his RSS feed.

When I first started teaching at UCLA, I had the good fortune of sharing a tiny office for ten days with a Professor Emeritus who was finally on his way to permanent retirement. Joe had officially retired twenty years ago but intellectually he was still very active (writing books and advising students). He kept a very low profile and was more or less ignored by the rest of the Department. Even the secretaries didn’t know his name.

Once he retired as a Professor, Joe was no longer a voting member of the academic senate and therefore could not champion anyone’s promotion. He told me that was when he found out how few friends he had in the Department. In retrospect, this was also the beginning of my nine-year journey to fully appreciate Henry Kissinger’s comment that “the reason why there are so much politics in academia is because the stake is so low.”

Joe and I got to know each other really well in those two weeks. We shared a small wooden desk (I would transfer my stuff from cardboard boxes into an empty drawer the minute that he finished vacuuming it out) and we would walk across campus to have lunch every day (but only to the student cafeteria, Joe hated the Faculty Club). Joe was as old as dirt and was the only person I knew (then and now) who survived concentration camp during the Holocaust.

Joe was like an older brother to me (even though he was the same age as my grandfather), taught me everything he could think of about surviving in academia. In particular, I loved his jokes. They were not only funny but were insightful and also full of wisdoms.

The one I still think about almost daily is the one about a Monk, a Priest, and a Rabbi, who gathered together to talk about religion and finance, and how they resolve arguments …

[5] Team Building versus Bread Making (by Denny K Miu)

Editor Profile - Denny K Miu is the Founder and former CEO of two companies, Gigamon Systems and Integrated Micromachines (now Touchdown Technologies). Denny has extensive experience in developing technology, products and business relationships. He has been a Professor, an engineer, an entrepreneur, a team leader as well as an individual contributor.

Denny is currently the Executive Editor of LoveMyTool.com, his third start-up. You can follow him on Google Buzz or subscribe to his RSS feed.

It takes a lot to build a successful startup. You need to start with a good product idea. And if it turns out that your initial (or even subsequent) idea sucks, which is often the case, then hopefully you have the tenacity and credibility to continue to evolve your business such that you eventually come upon a good product idea. Then you need to build a good team. Finally you need good execution and good timing.

And that’s pretty much the order. In other words, if you start with a bad idea, then even a top-notch team can’t help you push a square peg through a round hole (without hurting something or someone). And if you have a great idea and a great team but bad execution, then good timing simply makes it more obvious that you have completely squandered your early-mover advantage (while wasting a lot of blood and treasure along the way).

Of all the elements that are important to the success of a startup, the most important human element is the CEO. A good CEO does not guarantee success of a startup but a bad one will undoubtedly contribute to its failure.

Most bootstrapping entrepreneurs (like myself) take the title of Founder/CEO.

A Founder is a shareholder of the company, pure and simple. However, one can be a Founder (especially a co-Founder) without being the CEO. Or one can be a CEO without being the Founder (which is theoretically possible but unlikely for a bootstrapping startup except at a later stage).

It is easy enough to figure out what it takes to be a good Founder, but what does it take to be a good CEO? Or more preciously, what does it take to be a good Founder/CEO?

Unfortunately I know a lot more about what it takes to be a bad Founder/CEO than what it takes to be a good Founder/CEO (which doesn’t stop me from writing as if I am the expert, for the same reason that not knowing how to build a successful startup never stops me from building them in the first place).

[6] You Don't Need No Permission (by Denny K Miu)

Editor Profile - Denny K Miu was the Founder and former CEO of two companies, Gigamon Systems and Integrated Micromachines (now Touchdown Technologies). Denny has extensive experience in developing technology, products and business relationships. He has been a Professor, an engineer, an entrepreneur, a team leader as well as an individual contributor.

Denny is currently the Executive Editor of LoveMyTool.com, his third start-up. You can follow him on Google Buzz or subscribe to his RSS feed.

Almost two decades ago, for my first startup, I was fortunate to have found a successful but semi-retired former VC as a Board member and a mentor. As I learned more about his background, I discovered that my low-key friend was actually quite famous and had made seed investments in Sun Microsystems and a few other pioneer semiconductor and networking companies in the late-70’s to late-80’s.

One day I asked him how he managed to find these choice companies, almost all of which had become the pillars of Silicon Valley. He smiled and said, “We were lucky”.

I believed him. Many successful entrepreneurs and investors were successful because they were at the right place at the right time. It helps too that when the right opportunity presented itself, they also had the right skills, right experience, right circle of acquaintances and the right financial resources.

So I ask myself, “What made him so lucky in the past?”

And more importantly, “Would I ever be so lucky in the future?”

[7] Why We Must Embrace Rejection to Succeed (by Denny K Miu)

Editor Profile - Denny K Miu was the Founder and former CEO of two companies, Gigamon Systems and Integrated Micromachines (now Touchdown Technologies). Denny has extensive experience in developing technology, products and business relationships. He has been a Professor, an engineer, an entrepreneur, a team leader as well as an individual contributor.

Denny is currently the Executive Editor of LoveMyTool.com, his third start-up. You can follow him on Google Buzz or subscribe to his RSS feed.

I have spent the last fifteen years starting and running two startups. Currently, I am "on a break" to finish my book, Survival Guide for Bootstrapping Entrepreneurs, and to experiment with LoveMyTool, an online community for open source and commercial network tools. In the past, I often find myself participating in a social-bookmarking and discussion site, Y Combinator News (YCN), where I constantly learn new things about entrepreneurship.

For those of you who are not familiar with the distinction, YCN is different from YC (Y Combinator), with the latter being an incubator for startups catered mainly to the younger generation of entrepreneurs with web-based opportunities (what I call "Entre-sumers"). YCN is an open forum run by YC, but anyone can participate.

As with many, I consider myself an YCN enthusiast but merely an YC groupie. This article was inspired by the 2008 YC summer contest and resulting discussions at YCN, including the extreme emotions experienced by most entrepreneurs during fund raising.

In particular, I will focus on rejection — not just accepting it, but embracing rejection.

[8] Why We Must Bootstrap to Succeed (by Denny K Miu)

Editor Profile - Denny K Miu was the Founder and former CEO of two companies, Gigamon Systems and Integrated Micromachines (now Touchdown Technologies). Denny has extensive experience in developing technology, products and business relationships. He has been a Professor, an engineer, an entrepreneur, a team leader as well as an individual contributor.

Denny is currently the Executive Editor of LoveMyTool.com, his third start-up. You can follow him on Google Buzz or subscribe to his RSS feed.

Back in April, there was a gathering of successful and aspiring entrepreneurs called Startup School (SUS). I didn't attend but I was able to watch it live on Justin.tv and follow up when the presentations were posted on Omnisio. I enjoyed the forum very much. I didn't learn anything particularly new, but I was extremely happy to hear the same important messages repeated by the same important people, and to the right audience.

As an entrepreneur, I felt the best presentations were those from Paul Graham, Paul Buchheit and David Heinemeier Hansson (DHH).

It is as if these three successful entrepreneurs have conspired to weave a unified tapestry for the rest of us to enjoy. And if I were to summarize their collective wisdom in three seconds, it would be the following ...

"Make something people want ... don't ignore but try to understand [people's] advise ... listen [mainly] to yourself ... the secret to making money ... is to ask for it."

I believe this event had marked the tipping point of an ongoing narrative on the need to bootstrap among Silicon Valley entrepreneurs. So much so that immediately after the event, DHH and his colleagues posted two thought-provoking articles, one on why we might not need to be in Silicon Valley anymore and another one on why we should focus on starting a business and not starting a startup, which had generated quite a bit of interests and commentaries on YCN (here and here).

My own experience with starting and running startups is that time has indeed changed. I am not saying that time has changed so completely that the old model (using VC money to start companies) does not exist, I am just saying (humbly) that a new model has emerged that allows entrepreneurs to bootstrap meaningful companies achieving sustainable revenues, starting with their own money and their sweat equity (and more precisely, avoid taking VC money).

Entrepreneurship is all about wealth creation and it should be a conscious choice. As entrepreneurs, our goal is to maximize our returns and minimize our risks, and my experience is that ultimate success has a lot to do with impedance matching. Should we match the impedance for the VC's, which means big exit, big risk, big team and big funding? Or should we try to match the impedance for the entrepreneurs, which calls for modest exit, modest risk, modest team and modest funding?

The following is my argument for seizing "a medium slice of a medium pie".

[9] Now is Not the Time to be An Optimist (by Denny K Miu)

Editor Profile - Denny K Miu was the Founder and former CEO of two companies, Gigamon Systems and Integrated Micromachines (now Touchdown Technologies). Denny has extensive experience in developing technology, products and business relationships. He has been a Professor, an engineer, an entrepreneur, a team leader as well as an individual contributor.

Denny is currently the Executive Editor of LoveMyTool.com, his third start-up. You can follow him on Google Buzz or subscribe to his RSS feed.

The stock market rebounded almost 1,000 points today. The worst is over, right?

I know how important it is to stay optimistic and as entrepreneurs, we are by natural an optimist. But having survived the last economic downturn and seeing what I have been seeing lately which clearly indicates that this downturn is going to be much worse, much boarder and much more sustaining, my advise to fellow entrepreneurs (especially those who are CEO’s) is that “don’t be an optimist”.

This is the beginning of the beginning. It will get a lot worse for a lot longer. My previous experience is that “just because you think it couldn't possibly get any worse doesn’t mean that it will get any better”. If you are a CEO running a startup, whether your company is profitable or not, now is the time to cut at least one-third of your workforce and make sure you have enough cash in your bank to sustain two to three more years of burnrate.

If your company is not yet profitable, then burnrate is simply equal to your fixed cost. If your company is recently profitable, think about what happens if your revenue suddenly goes down to zero. Keep in mind that just because you sold $1M last month doesn’t mean that you will get a $1M worth of incoming cash. What if your customer doesn’t pay, or if they decide to pay in 60 days. What if an entire sector of your customer base disappears overnight.

And if you rely on third-party resellers as your distribution channel as most startups would, the problem will get much worse. These guys have no line of credit. They can only pay you when they get paid which would in the best case scenario, add another three weeks to your receivables. Keep in mind that chances are that your suppliers will start to demand cash upfront. So you will get squeezed on both ends. Things can get really nasty really fast and now is the time to make drastic cut.

Unfortunately cutting fixed cost means cutting headcount. In other words, now is the time to lay people off. It is a very tough thing to do, especially for inexperienced entrepreneurs. But as the CEO of your company, your responsibility is to your shareholders, not your employees and not even your customers. Also, by cutting now, you could improve the chance of saving jobs for the remainder of the team.

In summary, what I have learned is that as the CEO, “your most valuable asset is your money, not your people”. I have learned this lesson the most painful way possible. It is the best advise that I ignored. Let it not be yours.

Read here, here and here for similar advises from other experienced entrepreneurs.

Click here to read other chapters of Denny's 2nd Book »

[10] A Bridge (Loan) to Nowhere (by Denny K Miu)

Editor Profile - Denny K Miu was the Founder and former CEO of two companies, Gigamon Systems and Integrated Micromachines (now Touchdown Technologies). Denny has extensive experience in developing technology, products and business relationships. He has been a Professor, an engineer, an entrepreneur, a team leader as well as an individual contributor.

Denny is currently the Executive Editor of LoveMyTool.com, his third start-up. You can follow him on Google Buzz or subscribe to his RSS feed.

Today is yet another momentous day, one of many more to come to be sure, with a historic meeting in the White House between our sitting President and our President-elect. If Mr. Obama were to receive advise in the form of the legendary three envelops from Mr. Bush, I am sure all three would say "Blame Your Predecessor".

This would be an important message for all struggling entrepreneurs to remember in the next two to three years, which is that there is little motivation for the incoming administration to fix the current economic problem in a hurry. Mr. Obama is smart enough to take this opportunity to think longer term, to address deeper issues and to solve them just in time for re-election while blaming everything on Mr. Bush for as long as he can.

In other words, this is one more reason to believe that the current economic downturn would get a lot worse for a lot longer, which is particularly painful for entrepreneurs with a company that is not yet profitable or only recently profitable.

On the other hand, ironically, there is no better time to "start" companies.

My last successful company was started in the summer of 2003. By 2005, we had a product ready for market and the customers were buying again. So we lucked out because once the economy recovered, we were the only game in town. We had the market opportunity all to ourselves and didn't see any competition for at least three more years.

In retrospect, being in the darkest part of a long dark tunnel was the least logical but the most strategic place to start digging.

[11] High Tide Low Tide (by Denny K Miu)

Editor Profile - Denny K Miu was the Founder and former CEO of two companies, Gigamon Systems and Integrated Micromachines (now Touchdown Technologies). Denny has extensive experience in developing technology, products and business relationships. He has been a Professor, an engineer, an entrepreneur, a team leader as well as an individual contributor.

Denny is currently the Executive Editor of LoveMyTool.com, his third start-up. You can follow him on Google Buzz or subscribe to his RSS feed.

I grew up in Macau, a small island town south of Hong Kong, 60 miles on the opposite side of the Pearl River delta. While Hong Kong was a British colony, Macau had belonged to the Portuguese. Macau was about one-fourth of the size of San Francisco but with about the same population. Unlike Hong Kong, Macau never had much of an industry except for gambling and prostitution. But outside the few neon-light streets frequented by Hong Kong tourists, Macau was actually a place of natural beauty and a fun and safe town to grow up.

I have great memory growing up in Macau, including the time when my younger brothers were too young to hang out with me and my weekly recreation was limited to visiting my father's barber shop by myself.

It was typical for Asian children to go to school for five and a half days. So every Saturday, I would come home around noon, finish my homework and my household chores, and before dinner, walk unescorted for about twenty minutes to the busy part of town.

[12] Entrepreneurs Do It For Love (by Denny K Miu)

Editor Profile - Denny K Miu was the Founder and former CEO of two companies, Gigamon Systems and Integrated Micromachines (now Touchdown Technologies). Denny has extensive experience in developing technology, products and business relationships. He has been a Professor, an engineer, an entrepreneur, a team leader as well as an individual contributor.

Denny is currently the Executive Editor of LoveMyTool.com, his third start-up. You can follow him on Google Buzz or subscribe to his RSS feed.

The most common question that aspiring entrepreneurs ask, especially during time of economic downturn, is the following.

"Is this a good time to start a company?"

My experience is that there is no good answer to this question. Anytime is a good time to start a company because paradoxically, for a struggling entrepreneur, anytime is a bad time.

When the economy is doing well, everyone is doing well and as a result, there are a lot more competitions for your customers' limited resources. Similarly, when the economy is doing badly, as it is now, few entrepreneurs could afford to start companies. That's the good news. The bad news is that customers are really struggling so you must have an exceptionally compelling solution that could save them money and help them survive before they would listen.

So essentially the World conspires against an entrepreneur irrespective of the economy. Yet it has never stopped anyone from trying.

So in a sense, it would be as if you were asking, "Is this a good time to fall in love?"

And that in a nutshell is my own experience in starting companies. As an entrepreneur, it is important that we focus on making money (make money, then make meaning). But on a personal level, it is really a love affair. If you are not married, then starting a company is like your first love. But if you are already married, as I am, then starting a company is like having an affair (while remaining completely faithful).

[13] How to set SAIL in a Tsunami (by Denny K Miu)

Editor Profile - Denny K Miu was the Founder and former CEO of two companies, Gigamon Systems and Integrated Micromachines (now Touchdown Technologies). Denny has extensive experience in developing technology, products and business relationships. He has been a Professor, an engineer, an entrepreneur, a team leader as well as an individual contributor.

Denny is currently the Executive Editor of LoveMyTool.com, his third start-up. You can follow him on Google Buzz or subscribe to his RSS feed.

For humility sake, I often like to remind myself of an interview on MTV where the beautiful hostess asked a famous entertainer how he came to decide to rap as his chosen art form, to which he answered, "Had I know how to sing, I would have preferred to be a singer."

Typically would-be entrepreneurs think of entrepreneurship as a rational choice. My own experience is that most of us (if not all of us) chose to be an entrepreneur only because we didn't have a better alternative. If we could hold down a job or if we were able to be happy working for someone else, we would never strike out on our own.

Entrepreneurship is inevitably our last resort.

In trying to understand the still unfolding financial tsunami, I find myself reading lots of articles (often written by someone who has never been an entrepreneur) explaining why now is the best time to start a company and if someone were to be laid off, it might actually be a "blessing-in-disguise."

I disagree ... I think it is a blessing for anyone to have a paying job right now.

As I have written in the past, I have started two companies in the past (LoveMyTool is my third). I started my first company when I was denied tenure as an Assistant Professor at UCLA and I started my second when I was fired by my first. In both cases, the career change couldn't have happened in a worse economic climate but I made the best out of what I had.

However, as bad as the economy was in both cases, it was a lot better than what we are experiencing now. From an entrepreneur's perspective our economy is still in a free fall and it would be irresponsible for anyone to predict a bottom when all we could witness is a slightly decreasing terminal velocity.

On the other hand, a few of us are giving up on job seeking already and are starting to entertain entrepreneurship as a viable option. To those who are determined to make it work, I offer you my emotional support and the following advise on how you might set SAIL (Simplicity, Agility, Intimacy, and Leverage) to maximize your chance of survival.

By the way, while I might hope that things would recover soon, I have also learned painfully that "Hope is not a Strategy." Realistically all struggling entrepreneurs should forget about achieving success in the next few years; it would be quite an achievement already just to survive.

[14] Startup Lessons Learned While Climbing Kilimanjaro - Part 1 (by Denny K Miu)

Editor Profile - Denny K Miu was the Founder and former CEO of two companies, Gigamon Systems and Integrated Micromachines (now Touchdown Technologies). Denny has extensive experience in developing technology, products and business relationships. He has been a Professor, an engineer, an entrepreneur, a team leader as well as an individual contributor.

Denny is currently the Executive Editor of LoveMyTool.com, his third start-up. You can follow him on Google Buzz or subscribe to his RSS feed.

Kilimanjaro is a non-active volcano located inside Tanzania near the Kenya border. It is the tallest mountain in Africa (19,331 ft from sea level and 15,100 ft from its base). Although it is the fourth tallest mountain in the World measured from sea level (after Mount Everest at 29,028 ft, Cerro Aconcagua of Argentina at 22,841 ft and Mount McKinley of Alaska at 20,320 ft), it is in fact the tallest "free standing" mountain.

Kilimanjaro also has the additional distinction that among the tallest mountains of the World, it is the only one that is "non-technical" meaning that it is accessible to novices (like me) requiring no mountaineering skills and safety equipments. In other words, anyone could walk up to the summit provided that they are reasonably fit and possess extraordinary determination.

Shown above is a video excerpt taken from a well made IMAX movie (which you can purchase from Amazon for less than $5). I highly recommend this DVD if you are interested in learning more about Kilimanjaro.

On the other hand, in retrospect, this DVD doesn't quite convey the full spectrum of the actual climbing experience. The following is another great video - shot three years ago by members of the same expedition group, International Mountain Guides, that my son and I had joined, taking exactly the same route as we did. In this much less polished amateur video, you get to experience the physical exhaustion, constant heavy breathing and the occasional cussing.

This two-part article is part of my ongoing series on startups, entrepreneurship and bootstrapping, talking about lessons that I have already written extensively in the past but now re-learned through a completely different context. In this Part 1, if you could bear with me, I would like to first describe my journey to the roof of Africa.