Dan Caffee: Stick to Your Guns, or Four Crucial Lessons for Entrepreneurs

The open strategy session The Innovator’s Challenges with the visionary entrepreneur from the US Dan Caffee took place today. Having come to Chelyabinsk all the way from Utah — or, ‘from the American Chelyabinsk’, as the speaker jokingly put it — Mr. Caffee shared his philosophy with the budding entrepreneurs, start-uppers and technologists of our all-too-conservative and seemingly non-entrepreneurial region. Dan Caffee does have the experience to speak from: his company Neutron Interactive (www.neutroninteractive.com) grew from zero to yearly revenue of around $20 million in just five years. Mr. Caffee never had a regular job, but only started one company after the other ever since his first year at university. As he confessed, he ‘has problems’ with working for hire, as he is absolutely incapable of taking orders from a boss.

 

What is the most important piece of advice that this experienced entrepreneur gave to beginning entrepreneurs at the meeting? To summarize, I’d say his main thesis was to stick to your guns. Dan Caffee recommended that those in the audience find on the Internet and listen to the recording of a commencement speech Steve Jobs gave at Stanford University about a decade ago. I found and watched that episode on video after the meeting. On that day Steve Jobs, the founder of Apple, said to the university graduates: ‘Remember that you will die’. Live every day as if it were your last. To remember that you are going to die is ‘to get rid of the illusion that you have something to lose’, said Jobs. You’ve got nothing to lose, ‘you are already naked’ and ‘you are already at the threshold of death’, so there is absolutely no reason ‘not to follow your heart’.

 

The first and the most important lesson Dan Caffee presented to the audience is — ‘be a little crazy’. If, as you go around sharing your idea with people, everyone agrees with you that your idea is a good one — that means your idea is bad! Entrepreneurial ideas cannot be widely held. If everybody approves and claps you on the shoulder — that means you are not doing anything really novel or revolutionary.

 

Second — find a partner. Doing business is like ‘chewing glass’, proclaimed the speaker citing the words of Marc Andreessen, Netscape’s legendary founder. Sometimes it becomes extraordinarily difficult and you think that you cannot bear it. It is in those moments that not being alone, having a partner and finding support with them becomes critically important and saves the day.

 

The third lesson is to show initiative, to daringly step into the unknown. Vitally important in startups is, well, to start up! It is very hard to grow a company that has not been founded, joked the entrepreneur. Start doing something, do not work your idea to death — you still won’t make it perfect, it will still contain many flaws, and large ones. But the only way to find these flaws and to bring oneself closer to resolving them is to begin to act.

 

And, finally, fourth — having begun, do not stop. Fall down, pick yourself up, dust yourself off, carry on forward. Do not stop creating — and at the end of the day you inevitably will have created something. That is the true ‘secret to success’, revealed Dan Caffee and compared the situation to a boxing match. While you manage to withstand all blows and to keep on your feet, you’ve got a chance to win. One who sticks to this chance and does not let it slip away is the one who wins in business.

 

‘And what about the finances, the resources needed to open your business?’, asked somebody from the audience. Having or not having resources is not the problem, responded Mr. Caffee. Yes, many a business enterprise requires serious assets and serious money at the start. For example, Elon Musk’s ventures — spaceship launches, electric cars — they require gigantic investment. But they weren’t Elon Musk’s first, stressed Mr. Caffee. His very first project was the Internet-payment system PayPal, the software for which he wrote himself using his personal computer. ‘Guess how much that cost him?’, asked the audience a rhetorical question Dan Caffee. Many businesses do not require large investments at the outset, concluded the speaker, thus you should start with those, and later on, your second and third ventures you may open in more capital-intensive lines of business.

 

Responding to people’s cases — concerning projects in apparel, in high-tech industries — Dan Caffee emphasized that the main thing is to experiment. Do not think too long and do not invest too much, on the contrary, as fast as you can and as cheap as you can build one item (prototype, model) of whatever product you want to produce and sell — and straightaway go with it to the market and get feedback from the market.

 

‘How does one go about selling new technology to a person, who doesn’t fully understand its advantages?’, asked somebody from the audience. Do not sell technological advantages, replied the orator, but rather sell its coolness and its awesomeness. Electric cars had existed long before Elon Musk, but it was he who made them cool, beautiful, fashionable, appealing to the buyer, desirable to drive. In the eyes of the customer technology is primarily the fashion for this technology.

 

Dan Caffee is an excellent photographer, he collects old Soviet and German cameras and he himself develops pictures in a darkroom. His photographs have magnificent muted colors. Despite living in the state of Utah (ie, the capital of the Mormon faith, one of the customs of which is polygamy) he is happy to only have one wife, he laughingly confesses, as that is already ‘more than enough’.

 

The open strategy session The Innovator’s Challenges with Dan Caffee was organized and sponsored by the United States General Consulate in Yekaterinburg (Michael Ritchie and Mikhail Brodsky), the yoga studio Yoginn (Kirill Yanenko), the South Ural University’s council of young scientists (Yakov Shmarin) and the Russian consulting group Sustainable Development Strategies.

 

Alexey Pan

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