Looks can be deceiving

Filed in archive Entrepreneurship on May 21, 2007

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In a comment on a previous post about starting that new business venture at home sans office, sans employees, sans all, James Chen, senior advisor for CXO Ventures, Sacramento, CA, and a director of CXO Private Equity and American River Capital Group pointed out:

Most people starting a new business tend to think that they should "appear" larger than they are - renting an office space, getting a mailbox address, hiring someone to answer the phone, having a jazzy website. I tell all entrepreneurs the same thing - do not waste your time and money appearing larger than you are. We will find out what is behind the smoke and mirrors no matter what. We actually favor entrepreneurs who don't have an office, only use their cell phone, and outsource or hire sparingly. This is for several reasons - the most important being that a good entrepreneur knows that what matters the most is the real business, not the appearance of the business. If you look at Ebay as an example, you will see one of the most well run and profitable web companies with perhaps the ugliest and most horrible looking website! Functionality is sufficient and they are smart not to mess with a good thing. Another simple reason why we look for these types of entrepreneurs is that when it comes to selling your business, your acquirer will take a close look at your debts and future obligations. No lease? No full time employees? No contracts? All great things that will make the transaction occur very quickly.

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