5 DO’s & 5 DONT’s – Entrepreneur learnings by John Acquaviva
For this article, we were lucky enough to count on the insights of John Acquaviva – entrepreneur, DJ, investor, producer, and so much more – and had the chance to not only get to know him better but get insider knowledge into what made him successful in the entrepreneur world.
In 1989, John Acquaviva and Hawtin founded what would become one of the world’s best known and influential techno labels, Plus 8 Records. The founding of Plus 8 Records put John Acquaviva and Richie Hawtin at the vanguard of the emerging international electronic music movement and DJ culture. When the world evolved from analog to digital at the end of the decade, Acquaviva and Hawtin believed in technology, and started investing beyond themselves and their record label. The first being FinalScratch Technology that, once patented, became the foundation of TrackerScratch created and marketed by Native Instruments, a developer, manufacturer, and supplier of music software and hardware for music production, sound design, performance, and DJing.
A few years later, in 1993, Acquaviva and Hawtin founded Definitive Recordings. Acquaviva was one of the first people to take notice and embrace electronic music’s digital future at the dawn of 2000 by championing Final Scratch. On the heels of that success, Acquaviva took another step to help found and launch Beatport.com, the largest dance-music download site in the world in 2004. That large step made him to the well-known investor he is today.
Acquaviva currently keeps an active schedule of speaking engagements at various conferences, mentoring for the Likes of Techstars Music, as well as Tenkan-Ten , managing the portfolio of Plus 8 companies and also a steady calendar of DJ-touring at selected events around the world.
Today, Aquaviva’s official investment fund (Plus Eight Equity Partners) invests in predominantly music technology. He believes music touches most of the world, and is a big part of the fabric of society and its part of his vision and thesis to integrate into society and business in such a way as to be construction and additive.
Entrepreneurs seem to be the new rockstars, which in John’s case, he went from being a rockstar in the electronic music movement, to being a rockstar-entrepreneur and investor. Generally speaking, from “The Social Network” to HBO’s “Silicon Valley,” entrepreneurs have never been hotter in popular culture. It all looks so glamorous from far away: drawing fancy equations on whiteboards, crushing through a carton of Red Bull during all-night coding sessions and ringing the bells on the NYSE trading floor after you’ve taken your company public and made a billion dollars overnight. Best of all, you get to build something; you get to disrupt the status quo and have an impact in the world. What these daydreams don’t include are the countless sleepless nights, the steady decline of your health and relationships and the constant stress of being responsible for your employees, customers and investors all at the same time. The entrepreneurial journey can crush the spirit of even the most dogged optimist and the start-up landscape is equal parts garden and cemetery, filled with promise and littered with failures. This is not to say that entrepreneurship isn’t rewarding; it definitely is. However, the road to glory offers many pitfalls. How you deal with those challenges will determine whether or not you soar like Google or crash and burn like Pets.com. In a time where every idea has been tried, and seen, it seems to become ever more difficult to make money off of “just” an idea. Talking with John, he showed what really is behind all this startup hassle, and what to consider, before thinking your platform will be the next Facebook, and you will be the next Mark Zuckerberg.
Let’s take a look into 5 Do’s and Dont’s John would want any company to know about, and what strategic investors really take a look at before even considering to invest.
5 Do’s –
- Understand your opportunity. You have an idea – be sure you understand your idea, your opportunity and what makes you special.
- Know your competitive landscape. How can you tell me what is going to make you different if you don’t know the other companies in your area.
- Be ready for business. Be prepared with your information. Follow up in 24h to any and all opportunities. Have good documentation.
- Know who you are talking to. Is it an angel investor? Institutional? Strategic? The conversation changes in each scenario.
- Understand your valuation and value proposition.
5 Dont’s –
- Don’t sell a lottery ticket or a dream. If you don’t understand your value, don’t try to sell your dream and make me figure it out.
- Don’t pester or push people. Don’t intimidate them. Don’t turn off your potential investors. Know when to leave someone alone. Don’t bother people.
- Don’t give away certain information. Be careful on the information you give away. If you don’t know who you are talking to, be careful to not give all your info to anyone.
- Don’t be sloppy. Have all of your documents organized and ready. Have your contracts and affairs in order. Don’t be sloppy. That screams bad management.
- Reality check! Don’t price your company incorrectly. Don’t make a mistake on the valuation of your company. You will burn people’s money and will not have another chance to raise money. If you sell me a dream, and you don’t hold your promise, you will hit the wall.
“Key factors that I have come to expect, isn’t the strength of division, but the character of the leader and quality and structure of the team. If they don’t have a clear and administrative vision, people will only get more sloppy as time goes by. All boxes have to be checked. If you don’t have checkmarks, you will get more sloppy and that’s a no go for us and most investors.”
We humans seem to want immediate success, don’t want to take “No” for an answer, and if we do hear a “No”, we are certain someone else will soon tell us “Yes”. What many founders seem to forget, is a company can fail just as fast as it was built – overnight. When you see yourself getting sloppy, take a break, or change your strategy to become more motivated.
“The worst 2 things that could happen while building your empire is, either immediate failure or too much success too fast. Even with the smartest people, reality has a way of crushing you.”
One can easily get carried away, and be so sure of yourself, that one forgets 10 other people have tried and failed at what we think is the greatest thing ever invented. Technology is fast, and hard to keep up with. Consumerism is at an all-time high, social media is booming more than ever, but what would happen if one day all those platforms and tools to grow a company in 10 days are gone?
“In a world of incredible change and opportunity, most companies are at incremental value. Find a niche, make it an opportunity, pay yourself a salary, and make it work.”