Esther: This is The BusinessMakers Show, heard here and online at theBusinessMakers.com. We are your hosts, Esther Steinfeld -

Katie: And Katie Laird.

Esther: - and we are here with the formidable Laura Capper.

(Laughter)

Esther: She is the CEO and Founder, actually, of Cap Resources. Laura, welcome to The BusinessMakers Show.

Laura: Thank you. I don't think I've ever been called formidable before.

Katie: She's way too sweet, Esther. (Laughter)

Laura: (Laughter)

Esther: Ye- I know. You should hear the kinds of things she's doing. As soon as you hear, you will agree she is formidable. It's truly unbelievable. So tell us, actually, what is Cap Resources?

Laura: We're a consulting company and we specialize in launching new ventures. So when you hear about startups, we start up startups.

Esther: Awesome.

Laura: We work with founders and help them get the company bootstrapped and get it up and running.

Katie: Excellent.

Esther: Oh, cool.

Katie: Now are you focusing on particular industries or what kind of companies are you working with?

Laura: Oh, typically we're focused on technology companies. That's really our passion. So we do a lot of alternative energy, energy technologies, oil field, more conventional type technologies. We love, like, battery deals and material sciences. We had a lot of fun working on some new therapeutics that are coming out. So it's all pretty much across the board but technology is the common denominator.

Katie: Excellent.

Esther: That is so cool.

Katie: Not only are you beautiful smart but you're geeky, too. I really like you.

Laura: Oh you are so good.

(Laughter)

Laura: There is that.

Katie: We really like geeks here. I'm sorry.

Laura: There is that. Most definitely.

Esther: And how many companies have you worked with, exactly?

Laura: We've been at this about 15 years.

Esther: Wow.

Laura: And you'd probably get a kick outta this. I ran it on my own for about eight years.

Esther: Oh my gosh.

Laura: And at one time, I think I had 12 customers going and I thought, "I just can't do this on my own and that was right before the dot com era and then companies were flying out of the woodwork, so I staffed up quite a bit and typically have up to seven or eight people working for me since then but that was a interesting era. I think we worked with 40 companies in kinda that peak year.

Esther: Oh my gosh.

Laura: Things were a little crazy then.

Esther: And how many of those companies are still in existence? Are there a lot of them?

Laura: Oh, that's a good question.

Esther: Do you keep up with a lot of your clients from that time?

Laura: Very much so and to be honest many of them morph over time. So where they started is not typically where they end up.

Esther: Of course.

Laura: You know, there might be some common thread but I would guess 80 percent are still going ­

Esther: That's a good percentage.

Laura: - in some form or fashion.

Katie: Wow! So now, do you only work with startup companies or -?

Laura: What's been interesting over the last seven or eight years - the answer is yes. We do only work with startup companies but more and more, we're doing startup divisions of very big companies. So we've, we've got Fortune 500 companies that have had product lines in a particular area and now they've decided to go into a new area. And so from their perspective it really is a startup. They're kinda starting from scratch, coming up with new products or new services and there's actually a lot of analogies even between getting something started at a big company versus something that's truly from the ground up.

Katie: Okay.

Esther: Very, very cool. Because you work in the field, you talk to these entrepreneurs all day, every day - what skills do they possess? What does an entrepreneur need?

Laura: You know, I'm obviously biased from my own experiences but I would say perseverance is very high on the list, 'cause it's rough going. You know, you really have to be committed to your vision. That old saying that you really have to have passion about what you're doing, I think, is very, very true. There's no way you and your family can survive the effort if you don't have passion for what you're doing.

Katie: Exactly.

Esther: Uh huh.

Laura: And I'd probably put number three on the list is a willingness to learn. To keep an open mind. When you start any venture, you have this exact vision of where you wanna go, and I can almost guarantee you that may not be the optimal path.

Esther: Uh huh.

Laura: And the only way you find the best path is if you're willing to listen to others and factor that into your plan. So openness and a willingness to learn is really high on the list.

Esther: That is very cool and I'm actually curious: all these CEOs you talked to, what are kind of the things that they have to watch out for?

Laura: I would say one is kinda getting lost in minutiae. You know there's a lot of little things that you have to do to run a business that could just eat your lunch and keeping focused on those three or four really critical things is key. The other is that you can't be too enamored with your technology. I call it founderitis, where you think you've got the Holy Grail and you're so convinced you've got it right, you don't factor in all these outside influences. So it's equally important, even if you are an inventor and have a great technology, it's perhaps more important that you understand what the markets are for it. What the market thinks are important may not be what you think are important. You, frankly, could be smarter than the market but the market's the one with the money.

(Laughter)

Katie: Exactly! You can be too smart. And too forward-thinking.

Laura: So you have to learn how your customer base thinks and what's important to them and for a lot of very sharp people; that in itself is kind of a difficult task. What if I have to compromise my ideal design because the market wants a cheaper product or wants a product that will do something else? I have to learn to compromise to kinda meet their needs.

Esther: Right.

Laura: And that can be kind of tough for a founder of an idea.

Esther: Very interesting. Actually, we've talked to several CEOs before that have founded a business based on a need, as opposed to coming up with their product first -

Laura: Yep. Yep.

Esther: - or envisioning this product - more serving a need. I guess there are several different ways you can have that kind of "Aha" moment.

Laura: Very much so and I think recognizing a market trend and then figuring out a way to meet that trend can be a great way to start a business; very much so.

Esther: Very cool.

Katie: What are some things that you do to help them identify the needs out there; help guide them in the right direction?

Laura: Well we really have a process we go through that even in very, very different fields, we pretty much stick to the same overall process and step one is learn everything we can from the founder. That they've obviously been at this a while and have compiled a great deal of information. The only challenge is half the time 80 percent of it's in their head, so you gotta -

(Laughter)

Katie: Pull it out, yeah.

Laura: And then once we've done that and have kind of synched up with what their vision is and understand it, then we typically kinda back off and do some independent validation and we always start by researching the market and researching the competition. So that those are always the first things we do and then we kinda meld our vision to what we think the market needs and how we can be differentiated from the competition. So we have a very disciplined approach in looking at the market and being very realistic about the competition and also you can learn a great deal from the competition. You know you find out how they were funded. How they're distributing. Understanding how their packaging their products and pricing it, as opposed to looking at them as the enemy, you can actually learn a great deal and if you take the idea even further, you know you may be ultimately billing to sell to a competitor, too. So -

Katie: Awesome.

Esther: Uh huh.

Laura: - that's usually where we start is - and we try to help the founder step back from their forest (Laughter) and look at this larger world, everything else that's going on with the market and how that might influence their plans and designs.

Esther: That is very cool. Well, we will have more with Laura Capper right after this. You're listening to The BusinessMakers Show, heard here and online at theBusinessMakers.com.

[Aflac Commercial]

Katie: Welcome back to The BusinessMakers Show where we're talking with Laura Capper, Founder and CEO of Cap Resources. Now, Laura, you gave us all sorts of great information about how Cap Resources does a lot of competitive intelligence work for your clients. Do you have any suggestions for maybe a budding entrepreneur that's really wanting to get out there, on their own for now, and look at what the competition has going?

Laura: Oh we do. Actually, this gets into kind of a clinical talk which I won't go into now.

Katie: Oh, okay.

Laura: But I will put in a little plug here. The Rice Alliance for Entrepreneurship gives courses for entrepreneurs and I'm one of their guest speakers and I teach the segment on marketing and competitive analysis and you can pick up great stuff there. But essentially we try to split it into phases, if you will. The obvious is you try to pull everything you can from the web. So that's obviously a place to start. The challenge is keeping the information organized so that you really learn from it. So we're big fans of sticking stuff into Excel spreadsheets. You can keep nice, neat little categories. You might wanna understand who your competitors' major clients are. That might be a way to do that. So finding a way to organize what you find always makes it, later, much easier to analyze it. So you get through the web, so you're not stupid.

(Laughter)

Esther: Yeah.

Laura: And that you learn the basics.

Katie: The foundation. That's right.

Laura: But you know, there's a lot of goofy stuff out there, too. So you have to be careful to not get too colored by that. The other thing we really recommend is picking up periodicals in the industry or looking at what the issues are with trade associations. You know, you can leaf through an Oil & Gas Journal or a Nature Magazine and probably get a pretty good sense of what's going on in a particular industry and interestingly, not everybody has their stuff on the web. A lot of periodicals still don't get all of their content on the web. So we'll ask a client, you know, give us the last two years of periodicals just so we can leaf through it, get up to speed.

Katie: Wonderful.

Laura: So that's kind of a step two in there and probably the most important step after you've done that is to get out there and talk to people because where you - you really find the distilled knowledge about a particular industry or a particular segment of the market is from the people that have been there a long time.

Esther: Uh huh.

Laura: And they're gonna know nuances that you're not gonna find in print. There are some industries where you think they're making their money in Area A and really, they're making all their money in Area B and they're not gonna publish that.

Katie: Right. (Laughter)

Laura: It's a closely-held secret.

Katie: Right.

Esther: Yes.

Laura: But, you know, a retired executive or a salesperson that used to work there, you know, might be able to share with you what really makes it run. So - and that's the toughest part for an entrepreneur, particularly if you're more the academic type or you don't have strong social skills - getting' out there, schmoozing, making friends, asking people for advice.

Esther: Networking.

Katie: Yeah.

Laura: You got it. You gotta -

Katie: Maybe you need a chatty sidekick or something' if that's you.

Esther: Yeah.

Laura: Absolutely.

(Laughter)

Laura: Absolutely. It's very helpful and then you can kind of earn advocates from those relationships. You know if people are advising you and you're showing them that you value their advice that makes them feel good too and they're more likely to be an advocate for you and that's always a good thing to have.

Esther: That kind of leads us to another point because even if you are your own boss and you're starting a company, you know, no man is an island as they say and where exactly should you look for these advisors?

Laura: You know, I'll tell you where I think you should not look. Lemme start there.

Esther: Okay.

Laura: I'm a firm believer if you are growing a business and you are considering that you may have to have capital or raise money from somebody else - maybe you need it from an angel investor or a venture capitalist or you wanna go to the government or you wanna go to some big company to find you. I always believe do not go to that source for advice until you really have your stuff together, 'til you really know what you're doing.

Katie: Oh, okay.

Laura: So you can rely on consultants. You know, usually most consultants will spend a round or two with you without charging you. It's just part of their courting process. You'll get some advice there. Oftentimes attorneys can, again, in this courting process, what can you do for me. They'll probably help you critique your business model. Probably the strongest advisors, though, would be somebody that's actually been in that business, in that sector and knows what the problems are, knows what people have tried before. When I'm talking to younger people, you know, out of college, maybe they just got an MBA - I tell them, you know, don't write off your parents' friends.

Esther: Yeah.

Katie: That's true. (Laughter)

Laura: There's just something with, you know, seniority that just gives you more of a sense of the ups and downs of a business and things to look out for. There's an old saying, you don't really learn from successes, you learn from mistakes and -

Katie: Right, too.

Laura: - older people have probably had more mistakes than younger people, so -

Katie: And they've just been around longer to see the patterns.

Laura: Exactly. You have to start out strong at the get-go with a potential investor and here's why. If they even think you're coming to them from advice - and this just boils down to money, frankly. You know if you're going to take investment, you're gonna have to give up something for that. Usually, it's a piece of your company. So if they feel that before that's ever happened that they've taken you from this little sapling and helped you develop into a tree, they're gonna think you owe them more.

Katie: Oh!

Laura: Whereas if you come in and present yourself as a hardy red oak or something -

(Laughter)

Katie: Right. (Laughter)

Laura: You know, you want them to wanna be a part of you.

Esther: Yes.

Katie: Okay.

Laura: So I -

Esther: Great advice.

Laura: - I really don't like to, you know, gear yourself up for a lot of indebtedness to somebody that is really who your end target is. You really should go to great lengths to get your stuff together and present your best foot forward at the get-go because the other old truism that first impression is what they're always gonna remember. That's always how they're gonna see you.

Katie: Yes.

Laura: So if I go in in June and somebody shoos me away, you know, an investor says, "Oh you don't have your story together,"

Esther: Oh, and I come - yeah.

Laura: And I come back six months later, they're still gonna remember you came in in June without having your stuff together.

Esther: Right.

Katie: Right.

Laura: Get it together first is my advice.

Katie: And what does that mean, really? I mean, you wanna make a solid impression to these VC guys. What should you have ready? I mean, are we talking like a 90-page business plan with, you know, accompanying hand puppets that you act out, you know, your business model? Or, like what is a good package or, you know, what do you bring?

Laura: I think it's really gonna vary greatly depending on what you're going after. I'll tell you if you're in the technology sector and you're in a industry where patents are prevalent, you gotta have your intellectual property protected.

Katie: Oh. Okay.

Laura: That's of foremost importance. So that's one of the first screening questions you might be asked. Beyond that, there are just standard elements to understanding your business you have to know. Whether you put it in a 12-page PowerPoint or a 120-page business plan, I don't think that is that important, what format you use, but there are things you have to have to have done. You have to know the market. You have to know your competitors, realistically. You know, not idealistically. (Laughter)

Katie: Right, right.

Laura: You have to have created a financial model of how you think your company will work and remember, if you're going to an investor or partner, they're wondering, "What's in it for me." So they wanna see a well thought structure, a well thought financial model, a general operating plan because in their minds, they're thinking, "Okay, if I put $200,000.00 in, when am I gonna get my $200,000.00 out and when am I really gonna get profit out?"

Katie: Right.

Laura: So about the only way to demonstrate that is show you've really thought the business all the way through via some means, whether it's a PowerPoint or Excel or business plan and that you understand how they're thinking. That they're in this to make money, most likely. So you have to breed that confidence that you are going to give them a return on their investment.

Katie: Excellent. So make money together. (Laughter)

Laura: That's the idea. That's the idea.

Esther: Very cool.

Katie: You're listening to Laura Capper of Cap Resources on The BusinessMakers Show. You'll hear more after this, so stay tuned. You're listening to The BusinessMakers Show, heard here and online at theBusinessMakers.com.

[Aflac Commercial]

Esther: Welcome back to The BusinessMakers Show, heard here and online at theBusinessMakers.com. We are back with our wonderful guest, Laura Capper. She is the CEO and Founder of Cap Resources. So you kind of touched on the business plan a little bit. Why does one need a business plan?

Laura: I see that as a means to establish your credibility. You know you could argue on one hand and say very few business plans are what actually ends up happening to the company -

Esther: And that would be the argument against them.

Laura: - if you look. Right. Five years from now I can guarantee you, (Laughter) whatever you're doing is not gonna comply with that business plan.

Esther: Right.

Laura: But if you look at it as an operating guideline for yourself. You set some milestones. You set some goals. You've thought about what kind of team you need to build, which is critically important - and then also it's - in a sense it's a marketing tool, so the investor gets to know how you think. Essentially, you want to establish credibility. They have to have faith that if they give you this money that you're gonna do something with it and so building that confidence and that credibility, you somehow have to document that and that's really what comes into a business plan. Also the disciplined approach in the business plan kind of forces you to think of these different aspects. You know if you're, say a scientist and you might have a brilliant idea, you might just focus on the technology. You might not think about manufacturing costs. You might not think about the market - what the competitive response might be to your product.

Katie: Okay.

Laura: And just by going through the standard elements of the business plan, you're gonna find holes and exposures. Things aren't gonna work - but that'll help you tighten up your plan. It's just - I hate to say this being in the business - it's kind of a necessary evil. If I'm writing a business plan with a client to raise money, I may have it look a little more cosmetically appealing but successful companies will typically lay out their next year. They have an operating plan. They have a budget. They have a hiring plan. So it's kind of a way of keeping your eye on the ball as well.

Esther: Very neat. I mean it's great advice, I think, for anyone trying to raise money. There's a lotta money out there to be had but it's just a question of putting yourself - it's like having a resume. You know, if you want yours to go to the top of the pile, better make it look good.

Laura: Exactly. And as terrible as this sounds, that old phrase, you know, you don't judge a book by the cover - well, you know, actually you do. That's usually why you pick it up. (Laughter)

Esther: Uh huh.

Laura: That cover got you to pick it up.

Katie: Yeah, sure.

Laura: Now once you've picked it up, you gotta have a little substance there but you do judge a book by the cover.

Esther: Absolutely.

Laura: So that kinda packaging does count.

Esther: I'm very curious. What would you say is your best advice to a budding entrepreneur?

Laura: A supportive and understanding family is a good thing. A personal situation which will allow you to fully commit yourself to the business is a good thing. Number one, I think, is keep an open mind and be willing to learn. I put that very high on the list. You have to be able to learn and adapt to be successful in business, period.

Esther: Yeah, adapting, I think, is really important. The market changes.

Laura: Yeah.

Esther: Every market changes constantly. You never know where it's gonna go and to believe that your business model can survive in any market, no matter what the climate is, just seems a little egotistic and short-sighted.

Laura: Well and if I - yeah, I thought of another important thing that I'd put as number one. I think I've got four number ones.

Katie: Awesome!

Laura: So is that right?

Katie: We'll take 'em. (Laughter)

Laura: The other is learn to appreciate the value that others can provide to you. If a super strong manager comes along or a super strong sales guy, don't be intimidated by their skills. Think about them as far as how their skills can make you stronger, make your company stronger. So a willingness to bring on really good people, in fact people that may have higher capabilities than your own is also the mark of a very good manager and that's just critical. Companies don't get going by luck. They get going by people working hard. (Laughter)

Katie: Ahh. Good quote.

Laura: So having good quality people surrounding you is just critical to getting the business going.

Esther: Well thank you so much. This has been super informative to me, know.

Katie: Thank you. Ah, me too. (Laughter)

Esther: I think our listeners are gonna love it.

Laura: Oh, it's been delightful. Thank you.

Esther: Thanks for taking the time. That wraps up our chat with Laura Capper, Founder and CEO of Cap Resources. You've been listening to The BusinessMakers Show, heard here and online at theBusinessMakers.com.