George Mueller – CEO, Color Kinetics (2005.03.08)

George is a young entrepreneur (34 years old) that visited my New Enterprises class to speak with us on what it is like to build companies. It was an entertaining tale indeed. George's current company builds LED-based lights. You have undoubtedly seen LEDs before in clocks or watches, but George's company is taking them to a whole new level. Color Kinetics makes LED lights that can serve as light bulb replacements. A few attractive characteristics of LED lights over traditional bulbs is that they don't give off heat, they can be easily programmed to change colors, they are more energy efficient, longer lasting, etc. He brought in a demo and the lights looked really good. George views LED-based lights as a disruptive technology to traditional lights. They recently outfitted the external lights at a hotel in Vegas with LED-based lights. George made the seemingly boring topic of "lighting" interesting.

Notes:

Build the company around people

Would invest in B-rated business plan with A-rated people over A-rated plan and B-rated people

Manufacture in China, it is the only way to be competitive

Sales should lead the company. Focus on profits

Contract recruiters suck

Don't get hung up on failure

As an entrepreneur you run scared and are always worried about the big company coming in and taking your market share

Starting a company is a big hand waving exercise

George invested all of his money and run up $50K in credit card debt

Follow your heart

Now is the best time to start

To be an entrepreneur, you have to be comfortable with the unknown and comfortable with change

OOC (out of cash) should be your laser focus

Have a business plan? It is accepted. Visa is willing to invest. Get as many credit cards as you need

Believes strongly in using angel investing and credit cards to start a company

Had to talk to 150 people to get first 12 investors

Always ask for an order and always ask for a referral

Work multiple deals with VCs and don't tell them about each other

Always move from a position of strength

Raise more money than you need – takes 3 times as long and 3 times as much money as you think

Building a team should be a top priority (and it takes a lot of time)

Need to have a performance based culture

VCs fund 6 out of 6000 business plans each year

60% of funded high tech startups go bankrupts

Fewer than 1 out of 47000 business plans submitted to VCs go public

Under promise and over deliver

Must be persistent