Anatomy of a Start-up: 1

People start businesses for a lot of different reasons. I cover all the usual reasons when I teach my entrepreneurial leadership class, but it dawned on me that I don’t cover the reasons behind how  someone might “fall into” being an entrepreneur.

Case in point: In 2009, I was on retainer with a Client to do  an equity raise to fund a category roll-up within the early childhood education industry. Somewhere along the process, the wheels came off the tracks (as it often happens) while the Client decided whether he wanted to sell the business to a third-party (an opportunity that seemingly came out of nowhere).  By the way, there is nothing an investment banker hates more than projects being derailed, particularly if he/she has spent significant amount of time sourcing the deal.

In any case, once the project was put on hold, I encountered difficulties collecting on my retainer (surprise?). To be fair, it certainly wasn’t intentional on the part of the Company since cash flow issues were hitting even the largest of the industry giants at the time (remember the Automotive industry?).  As I tried to reconcile myself to the fact that I had yet another bad debt to write-off, I had a thought…

The Company, which had been around for over 15 years, had developed a comprehensive line of early childhood development products that were considered the best in the industry (at least according to unsolicited testimonials from moms). The base products were subject-matter oriented learning DVD’s with product extensions that included books, flash cards, puzzles, plushies, etc. Among the numerous testimonials, there were several that were submitted by parents of special needs children, particularly those with Autistic children, that spoke glowingly about the amazing benefits of these products on their children’s learning.

So, flash back to about six months ago when I attended an Autism conference in St. Charles, IL. Since it was in relative vicinity to where I lived and my Client was exhibiting, I decided to spend a few hours walking the show. During the show (incidentally, I try to avoid trade shows as much as possible) I met a Company called Spectrum Technologies. I stopped by their booth because they had an array of wooden toys that could support the creation of a comprehensive Learning Kit idea that I had been toying about for my Client. (My projects generally include a market / business development component as well).

To my surprise, Spectrum Technologies was more than a product company. It was actually a software company that was launching a new Autism Software Technology targeted to consultants, clinics and organizations that used the  ABA (Applied Behavior Analysis)  teaching methodology in working with autistic children. They were familiar with my Client’s products and were very excited about developing a partnership between the two organizations.

OK. This concludes the first installment in a series that will take us through the process of starting (and hopefully growing) an entrepreneurial venture… tune in to the next installment.

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