Can you Read? Technical and Financial Literacy

2 Things Business Students Must Know

Managers in today’s economy cannot just be good at one thing. On the contrary, they need to have an exposure to almost every facet of the business that they are managing if they are to succeed. Does that mean you have to be a network engineer in order to run Cisco Systems, or a chef in order to run Nabisco? Certainly not. However, it’s tough to manage what you don’t know. Last year in the NU Entrepreneurs Club, I was the Director of our Startup Challenge, the largest division of the club. This year as President, I manage that Director, and 23 others. I know what they have to deal with because I did it myself before.

I believe that for any business-oriented student graduating today, in addition to whatever your major concentration is in business, you need to be literate in two key areas: technology and money. A lack of understanding of either is a gaping failure point for an organization. Let’s look at each one:

Technical Literacy

This means that you can talk the tech talk. Do you have to be the CTO? No. But, you need to understand the language, the acronyms and the terms that engineers use. You need to be comfortable speaking to engineers and have a solid understanding of how they think and how they work. You should be able to approximate about how long a technical project will take, and about how much it will cost. Advantages:

• Earn respect from the engineering team… engineers want to see business people who at least have the desire to understand tech
• Pay the right price for tech projects because you understand what it takes to complete them
• Gain opportunities to leverage technology that you understand to increase efficiency and reduce costs in your business

Financial Literacy

A balance sheet can be confusing. Do you know how to calculate comprehensive income or loss? Your company just bought a new server - how should we deal with the cost of that asset and how should we depreciate it? These are questions that should not be reserved for just your CFO or Controller. Advantages:

• Ability to talk to finance and accounting teams and understand their needs 
• Insight to know when there is a financial problem in your company, not enough cash flow, etc.
• Skills to review a company’s financial statements before your join the team to ensure it is in good fiscal health

Ready to become technically and financially literate? Great! Here are the action items:

• Consider concentrations in school like MIS
• Learn how to program (use Codecademy)
• Use a service like Mint.com to keep careful track of your personal funds
• Take a few accounting electives (especially managerial / cost accounting)

How to Choose a Great Startup Lawyer

As you are venturing into uncharted territory building a startup, having the proper legal protection and organization is not at the forefront of every entrepreneur’s mind. But after all of the building and planning and coding, making sure that your IP, partners and company are protected is absolutely paramount to ensure smooth sailing when you hit it big.

As you are seeking out a firm / lawyer to work with to form your corporation and initial IP protection documents, consider the following:

• Does the lawyer specialize in startups? 
• Does the lawyer have a strong track record in representing successful entrepreneurs?
• How involved are they in the entrepreneurial community?
• Have they ever started a company themselves or been deeply involved in a startup?
• Are they willing to defer fees until you raise capital?

Additionally, you need to consider how a lawyer is going to treat you. Do they have tons of clients that will get more attention than you?

For my last startup, I worked with Glen Caplan and John Fogg of Robinson Bradshaw in Chapel Hill, NC. They hit the nail on the head with every point I described above. I knew I was in good hands based on the following:

• Prompt responses: when I emailed Glen or John, I get a response back generally within an hour. 
• Insightful responses: when I asked a question, I didn’t get back a bunch of legal jargon. Instead I received detailed, insightful responses in language that I could understand.
• Culture fit: these were guys I would invite over to a BBQ… genuinely nice people that are a pleasure to work with.

Ultimately, you need to find a lawyer that is competent, values you as a client, and is someone that you can trust. And remember, it’s much cheaper to get it right the first time as opposed to cleaning up a legal mess later!