Talk Story
At Hawaii Bootcamp,
I saw no fools in the roomAN entrepreneur is "someone who pursues a business opportunity without regard for currently available resources," says David McClain, dean of the University of Hawaii business school.
While someone might qualify as an entrepreneur by floating a loan to open a new fast-food franchise or coffee bar, it'll take much more than that to diversify Hawaii's economy.
Wannabe founders of multimillion-dollar Hawaii businesses got a glimpse of what it takes at a Hawaii Bootcamp for Entrepreneurs, presented Monday by the university. The capacious Hawaii Convention Center was a good choice of venue. The Bootcamp needed room to expand.
Organizers expected about 200 attendees, but by showtime 480 were signed up, including business people, academics and high-school, college and grad-school students. They heard advice on how to raise money to turn ideas into going concerns from local start-up veterans, venture capital managers (VCs), and a team of experts from Guy Kawasaki's Garage Technology Ventures.
Kawasaki, CEO of Garage, a Silicon Valley venture capital investment bank, has founded several computer companies, achieved fame as Apple Computer's software evangelist and authored seven books on building businesses. He grew up in Kalihi and graduated from Iolani before heading off to Stanford and UCLA.
"It's good to be back," he said, basking in the glow of Iolani's victory in Saturday's state boys basketball championship. "Does Punahou even have a basketball team?" he asked. "Someday I will return to Hawaii and live on Tantalus so I can always look down on Punahou."
Local credentials established, Kawasaki assured the audience that people on the mainland are no smarter than those in Hawaii, but they do have broader horizons. "You need to be exposed to how big the world is," he said, "so get your butts to the mainland."
You'll find, he said, that getting a business started will depend as much on whom you know as on what you know. "The people you went to school with, the ones you thought were clueless, will someday be venture capitalists."
Other Kawasaki nuggets:
>> Pursue joy rather than fame or fortune.Also key: "Don't do business with okoles. Life is too short. Work with people you like.">> To have too much money can be worse than too little. "It saps your strength."
>> And "always tell the truth. It takes less energy than lying. I don't have the bandwidth to keep track of lies anymore."
Kawasaki applies his "Ala Moana Shopping Center Test" to choosing business partners. You imagine you're on the second floor above Center Stage and spot someone you know down below near the bookstore. You have three choices: Go down the escalator and say hello, wait until you run into them later, or flee immediately to another shopping center.
Only do business with people you'd take the escalator to say "hi" to, he advises.
Enthusiasm is essential. VCs aren't looking to fund people who say they can build a better mousetrap, Kawasaki said. They want people who are truly obsessed about murdering rodents.
UH lands more than $150 million in research grants each year. Therefore, Hawaii should have no shortage of ideas for new businesses, but it has other shortcomings.
For example, we've been slower than most states to organize so-called "angel" investors -- local people with the means and desire to invest in new ventures. To remedy that, UH Professor Rob Robinson has begun an official angel investor network called "UH Angels."
Finding local investors is as important as being passionate, Kawasaki said. "In the heyday, companies could get venture capital in Silicon Valley without local investments. Today, the opposite is true. They ask, 'How come nobody in your home city will back you if you're such a good deal?'"
There is also an acute shortage of infrastructure in Hawaii, meaning lawyers, accountants and financial institutions with real expertise and experience with start-ups. "A venture capital lawyer isn't some guy who handled the divorce of a venture capitalist," Kawasaki said.
We have a cultural barrier to overcome, too. Islanders have a notoriously low tolerance for failure, while 70 percent of start-up companies are likely to fold.
"Failure is crucified in Hawaii," Barry Weinman of Allegis Capital said, yet "you learn more from failures than from success."
"If you fail spectacularly, you can live on that for 10 or 20 years," Kawasaki joked. "Look at me. Apple got its clock cleaned by Microsoft and I'm still here."
"You need a thick skin," Weinman agreed, but then he offered some words of caution. "(Legendary investor) Warren Buffet once said: 'Every deal needs a fool. Look around. If you don't see a fool in the room, it's probably you.'"
John Flanagan is the Star-Bulletin's contributing editor.
He can be reached at: jflanagan@starbulletin.com.