Musketeer as Entrepreneur (Part 7): Conclusion

In the previous installment, I left D'Artagnan and his newly-formed team at a port on the English Channel as they prepared to start their venture. It is a long, convoluted and entertaining story that has some parallels to the typical life of a tech startup.

Early in the story, I mentioned that one of three musketeers, Athos, would be a competitor to D'Artagnan's efforts to restore Charles II. They don't encounter each other until mid-way through the adventure at a time when Athos was in peril of losing his objective and also his life, and D'Artagnan was sure he had failed and was not assured of his own safety.

In the case of D'Artagnan, the reason for this low point was that, while he and his team brilliantly achieved the first objective of making off with Monk, Charles II did not respond to the "gift" as he expected. In other words, the customer wasn't buying what he was selling, despite its obvious great value. What startup hasn't dealt with this very problem? Despite feeling in his heart that the customer was making a grave error, he had little choice to behave as if the customer was right -- and they're always right, or so it's said. Instead of accepting the "product" D'Artagnan wished to sell, Charles instead demanded that D'Artagnan provide a custom "service". Products and services are very different things, and D'Artagnan knew this, but he needed to salvage something or risk losing his and Planchet's capital.

I am being deliberately vague on what actually transpired since I don't want to give any spoilers to those who might want to read the book. Suffice it to say, that the service D'Artagnan was asked to provide was successful, and much to his surprise he did eventually generate revenue that was in line with his revenue plan. That last fact alone tells us that this story is fiction; no startup meets its revenue plan, missing either on the low side, getting the time-frame wrong or, in the minority of cases, exceeding their wildest expectations. But getting it exact? No way.

Planchet's faith in the D'Artagnan was amply rewarded, and so both investor and entrepreneur did quite well in the venture. The employee mercenaries did well, too, according to their modest expectations, but then D'Artagnan never did reveal just how much the venture actually netted. He made sure that none of them were around when he collected and then carried home the cash. This, too, is typical. No, not the secrecy, but that employees do not get rich in startups; the salary they earn is in lieu of risky equity. Founders and investors also conspire to keep the lion's share of the winnings.

So with that I'll end this lengthy series. I'll leave you with a passage from Dumas that sums up the qualities of D'Artagnan and Planchet. Perhaps he did so as counterpoint to the comedy he made of their behaviour and interactions in telling their story, and from which I liberally quoted in this series. Dumas gets the last word.

They who have pronounced Don Quixote mad because he rode out to the conquest of an empire with nobody but Sancho his squire, and they who have pronounced Sancho mad because he accompanied his master in his attempt to conquer the said empire, - they certainly will have no hesitation in extending the same judgment to D'Artagnan and Planchet. And yet the first passed for one of the most subtle spirits among the astute spirits of the court of France. As to the second, he had acquired by good right the reputation of having one of the longest heads among the grocers of the Rue des Lombards; consequently of Paris, and consequently of France. Now, to consider these two men from the point of view from which you would consider other men, and the means by the aid of which they contemplated to restore a monarch to his throne, compared with other means, the shallowest brains of the country where brains are most shallow must have revolted against the presumptuous madness of the lieutenant and the stupidity of his associate. Fortunately, D'Artagnan was not a man to listen to the idle talk of those around him, or to the comments that were made on himself. He had adopted the motto, "Act well, and let people talk." Planchet, on his part had adopted this, "Act and say nothing." It resulted from this, that, according to the custom of all superior geniuses, these two men flattered themselves, _intra pectus_, with being in the right against all who found fault with them.

Musketeer as Entrepreneur (Part 6): Building a Team

In our previous installment, Planchet and Co. was formed with pen to paper, recording the term sheet and shareholders agreement between our Musketeer entrepreneur (D'Artagnan) and co-investor (Planchet). Since so much was accomplished and the hour was late, D'Artagnan retires to the room Planchet provided. However, our CEO was restless; there was a lot on his mind.

"..This is it," said he, sitting up in bed, supporting his elbow on his knee, and his chin in his hand; - "this is it. I shall seek out forty steady, firm men, recruited among people a little compromised, but having habits of discipline. I shall promise them five hundred livres for a month if they return; nothing if they do not return, or half for their kindred."

Having been a leader of men for many years and due to his gregarious and generous nature, D'Artagnan had built an extensive network among the nobility and also among the lesser lights. Since he must be stealthy and the enterprise, despite its noble goal -- the restoration of Charles II to the throne of England -- is one that many magistrates would frown upon, he must recruit his employees with care.

Not only is stealth required, the enterprise is difficult. D'Artagnan must choose exceptional, if unrecognized, talent. They should not be difficult to find since what engineer -- sorry, I mean soldier-mercenary -- would turn down an opportunity to join a startup with a celebrity founder, and the chance to redeem and challenge themselves, or at least to make some good money. Yet, how many people are truly exceptional and not merely aspirational?

"...Supposing that among my forty warriors there should be found at least ten stupid ones - ten who will allow themselves to be killed one after the other, from mere folly? No; it is, in fact, impossible to find forty men to be depended upon - they do not exist. I must learn how to be contented with thirty. With ten men less I should have the right of avoiding any armed encounter, on account of the small number of my people; and if the encounter should take place, my chance is better with thirty men than forty. Besides, I should save five thousand francs...Ah! stupid wretch that I am!" continued D'Artagnan, "I want thirty horses. That is ruinous. Where the devil was my head when I forgot the horses? We cannot, however, think of striking such a blow without horses..."

"...Three bands - that necessitates three leaders; there is the difficulty."

We see here that D'Artagnan has realized that not only does he need many good men, he will need managers. So he sketches out an organization chart in his mind and realizes the difficulty of running an enterprise. He is also coming to terms with his limited funds, which while substantial are not unlimited. Many a dot-com was too eager to spend their capital to build a large organization -- like the one the founders came from! -- and founder on the pyre of an excessive burn rate. D'Artagnan, accustomed to large armies, recognized the trap and deftly avoids falling into it.

"..._Mordioux!_ what things patience and calculation are! Was I not going to embark with forty men, and I have now reduced them to twenty for an equal success? Ten thousand livres saved at one stroke, and more safety; that is well! Now, then, let us see; we have nothing to do but to find this lieutenant..."

"...Yes, but a lieutenant must have my secret, and as that secret is worth a million, and I shall only pay my man a thousand livres, fifteen hundred at the most, my man will sell the secret to Monk. _Mordioux!_ no lieutenant. Besides, this man, were he as mute as a disciple of Pythagoras, - this man would be sure to have in the troop some favorite soldier, whom he would make his sergeant; the sergeant would penetrate the secret of the lieutenant, in case the latter should be honest and unwilling to sell it. Then the sergeant, less honest and less ambitious, will give up the whole for fifty thousand livres. Come, come! that is impossible. The lieutenant is impossible."

The larger the organization, the more impossible it becomes to know the hearts and minds of the entire staff. For D'Artagnan this could too easily prove fatal. He quickly assesses the flaws of his original plan and decides to proceed with a much smaller team, one composed of star players and with little maneuvering room to surprise their leader by going rogue.

"...A single corps - _Mordioux!_ a single one, and that commanded by D'Artagnan...

"I reduce myself then to ten men; in this fashion I shall act simply and with unity; I shall be forced to be prudent, which is half the success in an affair of the kind I am undertaking; a greater number might, perhaps, have drawn me into some folly...

"Fifteen thousand livres saved - that's superb - out of twenty!"

...Thus fortified by his laborious calculations, D'Artagnan stopped at this plan, and determined to change nothing in it. He had already on a list furnished by his inexhaustible memory, ten men illustrious amongst the seekers of adventure, ill-treated by fortune, and not on good terms with justice. Upon this D'Artagnan rose, and instantly set off on the search...

There you have it: a low burn rate and a small, crack team. Back in the 17th-century D'Artagnan discovered the winning formula that still eludes so many technology startups. It would be interesting to see how such a man would get on as the CEO of 21st-century startup. He will of course -- to the relief of his employees, I'm sure -- have to leave the sword and musket at the door. Except, perhaps, in Texas.

We will now skip right along and proceed to the sea port where he has asked his chosen few to meet for the company's first all-hands meeting. He chose to not inform any of the ten of the identities of the others, giving them no opportunity to share and compare stories, or to plan any side adventures. Now the team meets in an isolated spot, free of unwanted observers.

"Approach," continued D'Artagnan, "and let not the bird which passes over our heads, the rabbit which sports on the downs, the fish which bounds from the waters, hear us. Our business is to learn and to report to monsieur le surintendant of the finances to what extent English smuggling is injurious to the French merchants...The thing which puzzles me is taking with me a crew of stupid fishermen, which crew will annoy me immensely, whilst if, by chance, there were among you any who have seen the sea - "

"Oh! don't let that trouble you," said one of the recruits; "I was a prisoner among the pirates of Tunis three years, and can maneuver a boat like an admiral."

"See," said D'Artagnan, "what an admirable thing chance is!" D'Artagnan pronounced these words with an indefinable tone of feigned _bonhomie_, for he knew very well that the victim of the pirates was an old corsair, and had engaged him in consequence of that knowledge. But D'Artagnan never said more than there was need to say, in order to leave people in doubt. He paid himself with the explanation, and welcomed the effect, without appearing to be preoccupied with the cause...

D'Artagnan, not to create any jealousy with the others, made the rest go forward. He kept his two selected ones, clothed them from his own wardrobe, and set out with them.

It was to these two, whom he seemed to honor with an absolute confidence, that D'Artagnan imparted a false secret, destined to secure the success of the expedition. He confessed to them that the object was not to learn to what extent French merchants were injured by English smuggling, but to learn how far French smuggling could annoy English trade. These men appeared convinced; they were effectively so. D'Artagnan was quite sure that at the first debauch, when thoroughly drunk, one of the two would divulge the secret to the whole band. His game appeared infallible.

D'Artagnan not only keeps the secret of the enterprise from becoming widely known, he shrewdly even keeps his own staff in the dark. The above passage demonstrates his skill with people by preying on their own natures to ensure that the secret is not even sought for by his band. This goes beyond what most startups must do to remain stealthy although it is not uncommon for a stealth effort to be only partially disclosed to most staff on a need-to-know basis. After all, if you don't know, or if what you do know is a lie, you can talk all you want and never violate the NDA, which is difficult to enforce at the best of times. Trust becomes unnecessary.

This has been the penultimate chapter of the musketeer as entrepreneur series. It is not my intent to recount the entire story as cleverly crafted by Alexandre Dumas. For those interested, I suggest you read it yourself; the link to the Project Gutenberg text (free) was given in the first installment. In the next and final post, I will tie up a few loose ends.

Musketeer as Entrepreneur (Part 5): Legalities

Our heros, when we last left them, had come to a verbal understanding of the enterprise, its risks and its potential for financial reward. Now they must get into the details of recording a contract. Since both D'Artagnan and Planchet are honourable men and would be content with a handshake on the deal, they are agreed that a written contract has advantages.

No startup would or should do business this way, even in the rare cases where investors and founders are as close as Dumas' characters. Not only that, they do it without lawyers. Of course they lived in an age when there was no contract law and disagreements between gentlemen were often resolved with sabres in dark courtyards, and courts were hardly the impartial venues we rely upon today. In other words, a contract was frequently of little import in their world. So why are they going through with this? We'll come back to this point after we listen in as the contract -- a combined term sheet and shareholders agreement -- is drafted.

"...We shall, like two lawyers' clerks, draw up together an agreement, a sort of act, which may be called a deed of company."

"Willingly, monsieur."

"I know it is difficult to draw such a thing up, but we can try."

"Let us try, then." And Planchet went in search of pens, ink, and paper. D'Artagnan took the pen and wrote: - "Between Messire d'Artagnan, ex-lieutenant of the king's musketeers, at present residing in the Rue Tiquetonne, Hotel de la Chevrette; and the Sieur Planchet, grocer, residing in the Rue des Lombards, at the sign of the Pilon d'Or, it has been agreed as follows: - A company, with a capital of forty thousand livres, and formed for the purpose of carrying out an idea conceived by M. d'Artagnan, and the said Planchet approving of it in all points, will place twenty thousand livres in the hands of M. d'Artagnan. He will require neither repayment nor interest before the return of M. d'Artagnan from a journey he is about to take into England. On his part, M. d'Artagnan undertakes it to find twenty thousand livres, which he will join to the twenty thousand already laid down by the Sieur Planchet. He will employ the said sum of forty thousand livres according to his judgment in an undertaking which is described below. On the day when M. d'Artagnan shall have re-established, by whatever means, his majesty King Charles II. upon the throne of England, he will pay into the hands of M. Planchet the sum of - "

"The sum of a hundred and fifty thousand livres," said Planchet, innocently, perceiving that D'Artagnan hesitated.

"Oh, the devil, no!" said D'Artagnan, "the division cannot be made by half; that would not be just."

"And yet, monsieur, we each lay down half," objected Planchet, timidly.

"Yes; but listen to this clause, my dear Planchet, and if you do not find if equitable in every respect when it is written, well, we can scratch it out again: - 'Nevertheless, as M. d'Artagnan brings to the association, besides his capital of twenty thousand livres, his time, his idea, his industry, and his skin, - things which he appreciates strongly, particularly the last, - M. d'Artagnan will keep, of the three hundred thousand livres, two hundred thousand livres for himself, which will make his share two-thirds."

D'Artagnan understands the value of sweat equity, although Planchet is reluctant. Planchet had hoped to get 50% of the post-money valuation, but he must be satisfied with less since D'Artagnan will be awarded immediately-exercisable options on achieving the agreed milestone.

"Very well," said Planchet.

"Is it just?" asked D'Artagnan.

"Perfectly just, monsieur."

"And you will be contented with a hundred thousand livres?"

"_Peste!_ I think so. A hundred thousand for twenty thousand!"

"And in a month, understand."

"How, in a month?"

"Yes, I only ask one month."

"Monsieur," said Planchet, generously, "I give you six weeks."

"Thank you," replied the musketeer, politely; after which the two partners reperused their deed.

"That is perfect, monsieur," said Planchet; "and the late M. Coquenard, the first husband of Madame la Baronne du Vallon, could not have done it better."

"Do you find it so? Let us sign it then." And both affixed their signatures.

There you have it: a shareholders agreement with terms, and an exit strategy to liquidate the firm's assets among the two shareholders. There will be no ESOP (employee stock option plan), just performance-based salaries for the employees -- sorry, mercenaries -- D'Artagnan will hire. In the end he will wisely implement a profit-sharing plan as incentive to keep mouths tightly shut among his unsavoury helpers, however that episode will not be shown in this series of blog posts.

"In this fashion," said D'Artagnan, "I shall be under obligations to no one."

"But I shall be under obligations to you," said Planchet.

"No; for whatever store I set by it, Planchet, I may lose my skin yonder, and you will lose all. _A propos - peste!_ - that makes me think of the principal, an indispensable clause. I shall write it: - 'In case of M. d'Artagnan dying in this enterprise, liquidation will be considered made, and the Sieur Planchet will give quittance from that moment to the shade of Messire d'Artagnan for the twenty thousand livres paid by him into the hands of the said company.'"

This last clause made Planchet knit his brows a little, but when he saw the brilliant eye, the muscular hand, the supple and strong back of his associate, he regained his courage, and, without regret, he at once added another stroke to his signature. D'Artagnan did the same. Thus was drawn the first known company contract; perhaps such things have been abused a little since, both in form and principle.

Ah yes, the disposition of shares and assets should a shareholder pass away before the milestone is reached is a necessary part of any shareholders agreement. Today's entrepreneur will be most familiar with it and many pages of similar clauses. Most contracts, and shareholders agreements are no different, spend most of their time on dealing with the cases where things go wrong.

Lawyering is a lot like software design: much of the code must deal with exceptional conditions rather than what the application is ostensibly for. Bad code, like a bad contract, is unwittingly optimistic and thus useless.

In our next installment, the newly-minted CEO of Planchet and Co. will immediately take steps to launch operations. His first step will be to hire a team: the company's employees.

Musketeer as Entrepreneur (Part 4): The Financial Plan

In the previous installment, we left the point in mid-conversation where D'Artagnan -- our entrepreneur -- has just completed his business plan presentation to Planchet -- the investor -- in an upper floor room of Planchet's small business. He plans to slip into England and abduct General Monk from within the encampment of his armies. Monk, he has correctly ascertained (and confirmed by history, as Dumas certainly knew), is his main obstacle to returning King Charles II to the throne of his father, Charles I, who was deposed and executed by Cromwell.

Planchet wishes to know how taking Monk will deliver the promised return. That is, where the money will come from and how probable it is that the entrepreneur's financial projections are reliable. Let us listen in as D'Artagnan and Planchet continue their discussion.

"In the first place, I shall set a ransom on him."

"Of how much?"

"_Peste!_ a fellow like that must be well worth a hundred thousand crowns."

"Yes, yes!"

"You see, then - in the first place, a ransom of a hundred thousand crowns."

"Or else - "

"Or else, what is much better, I deliver him up to King Charles, who, having no longer either a general or an army to fear, nor a diplomatist to trick him, will restore himself, and when once restored, will pay down to me the hundred thousand crowns in question. That is the idea I have formed; what do you say to it, Planchet?"

"Magnificent, monsieur!" cried Planchet, trembling with emotion..."

With the investor placated and the presentation at a conclusion, D'Artagnan wastes no time in proceeding to close the deal. Speed at this point is critical since an investor with too much time to think will only worry and dream up hypothetical problems that will only delay or, worse, scuttle the entrepreneur's careful preparations. This must not be allowed to happen.

"...Now, do you find the business good, and the investment advantageous?"

"Too much so - too much so."

"How can that be?"

"Because fine things never reach the expected point."

"This is infallible, Planchet, and the proof is that I undertake it. It will be for you a tolerably pretty gain, and for me a very interesting stroke. It will be said, 'Such was the old age of M. d'Artagnan,' and I shall hold a place in tales and even in history itself, Planchet. I am greedy of honor."

"Monsieur," cried Planchet, "when I think that it is here, in my home, in the midst of my sugar, my prunes, and my cinnamon, that this gigantic project is ripened, my shop seems a palace to me."

"Beware, beware, Planchet! If the least report of this escapes, there is the Bastile for both of us. Beware, my friend, for this is a plot we are hatching. M. Monk is the ally of M. Mazarin - beware!"

"Monsieur, when a man has had the honor to belong to you, he knows nothing of fear; and when he has had the advantage of being bound up in interests with you, he holds his tongue."

Mazarin is King Louis XIV's Prime Minister, who holds the true power of the realm and keeps the young king weak and isolated. D'Artagnan knows Mazarin well, and though he despises the man he does not underestimate his intelligence or his long arm. This venture requires stealth, in France as in England. Stealth mode is a common attribute of modern, innovative start-ups and was also clearly necessary in D'Artagnan's venture.

They were not so wedded to the idea of employing lawyers in the middle of the 17th-century, so there were no formal confidentiality agreements or NDAs, but D'Artagnan knew he could rely on his investor's discretion: they were both honourable men, and their word was as good as gold. All he had to do was make Planchet understand the need for discretion.

In our next installment, Planchet and D'Artagnan will incorporate the company, write up the elements of the term sheet, and tie it all up in a shareholders agreement.

Musketeer as Entrepreneur (Part 3): The Business Plan

In the previous installment, Planchet (the prospective investor, or venture capitalist) is getting the pitch from his former boss, D'Artagnan (the entrepreneur, and until recently the Lieutenant of the King's Musketeers). His presentation -- all spoken, since this is long before the arrival of PowerPoint -- is rich in emotion and carefully spun to play on Planchet's inner desires.

From their many years together in times past, D'Artagnan knows his audience well and has tuned his proposal accordingly. He is also a great wit and he takes the opportunity to tease Planchet, who has perhaps gotten a little too comfortable in his new career. This humourous aspect of their conversation is not only entertaining, it demonstrates that D'Artagnan keeps control of the agenda; it is important for an entrepreneur to never let a potential investor wrest away this control.

We have now reached the point in the presentation where D'Artagnan must open the kimono and reveal his venture's objective and business plan. It is a grand one, and of great historical significance. Dumas is a master at twisting the pages of history so that he can weave his characters into the narrative while simultaneously making it credible that these same characters fail to appear in the historical narratives of later ages.

"Planchet, I have an idea."
...
"I wish to replace upon his throne this King Charles II., who has no throne..."

It would be an understatement to say that this is an insanely improbable venture. For one man, even one as accomplished and skilled as the inestimable D'Artagnan, this is truly audacious. Despite his complete confidence in his former master, Planchet is rightly concerned. He must carefully probe into the business plan since there are considerable obstacles. D'Artagnan must address these if he is to get a term sheet.

Planchet made a prodigious bound in his chair. "Ah, ah!" said he, in evident terror, "that is what you call a restoration! ...But have you reflected seriously?"

"Upon what?"

"Upon what is going on yonder."

"Where?"

"In England."

"And what is that? Let us see, Planchet."

"In the first place, monsieur, I ask you pardon for meddling in these things, which have nothing to do with my trade; but since it is an affair that you propose to me - for you are proposing an affair, are you not? - "

"A superb one, Planchet."

"But as it is business you propose to me, I have the right to discuss it."

"Discuss it, Planchet; out of discussion is born light."

"Well, then, since I have monsieur's permission, I will tell him that there is yonder, in the first place, the parliament."

"Well, next?"

"And then the army."

"Good! Do you see anything else?"

"Why, then the nation."

"Is that all?"

"The nation which consented to the overthrow and death of the late king, the father of this one, and which will not be willing to belie its acts."

"Planchet," said D'Artagnan, "you argue like a cheese! The nation - the nation is tired of these gentlemen who give themselves such barbarous names, and who sing songs to it. Chanting for chanting, my dear Planchet; I have remarked that nations prefer singing a merry chant to the plain chant..."
...
"I say that I borrow twenty thousand livres of M. Planchet, and that I put twenty thousand livres of my own to it; and with these forty thousand livres I raise an army."

Planchet clasped his hands; he saw that D'Artagnan was in earnest, and, in good truth, he believed his master had lost his senses.

"An army! - ah, monsieur," said he, with his most agreeable smile, for fear of irritating the madman, and rendering him furious, - "an army! - how many?"

"Of forty men," said D'Artagnan.

We now come to the competitive analysis part of the discussion. D'Artagnan has already given the matter some thought and is ready to answer the investor's pointed questions. His competitors are large, well-financed and comfortably established. Or so it seems to Planchet. D'Artagnan through his own research and greater insight into the industry -- the business of ruling England -- remains confident and able to respond to the investor's concerns.

"Forty against forty thousand! that is not enough. I know very well that you, M. d'Artagnan, alone, are equal to a thousand men; but where are we to find thirty-nine men equal to you? Or, if we could find them, who would furnish you with money to pay them?"

"...I shall fight no pitched battles, my dear Planchet," said the Gascon, laughing.
...
"We have set aside the nation, which prefers singing merry songs to psalms, and the army, which we will not fight; but the parliament remains, and that seldom sings."

"Nor does it fight. How is it, Planchet, that an intelligent man like yourself should take any heed of a set of brawlers who call themselves Rumps and Barebones? The parliament does not trouble me at all, Planchet."

"...Well, this M. Monk, who has England ready-roasted in his plate, and who is already opening his mouth to swallow it - this M. Monk, who says to the people of Charles II., and to Charles II. himself, '_Nescio vos_' - "

"I don't understand English," said Planchet.

"Yes, but I understand it," said D'Artagnan. "'_Nescio vos_' means 'I do not know you.' This M. Monk, the most important man in England, when he shall have swallowed it - "

"Well?" asked Planchet.

"Well, my friend, I shall go over yonder, and with my forty men I shall carry him off, pack him up, and bring him into France, where two modes of proceeding present themselves to my dazzled eyes."

"Oh! and to mine too," cried Planchet, transported with enthusiasm. "We will put him in a cage and show him for money."

"Well, Planchet, that is a third plan, of which I had not thought."

"Do you think it a good one?"

"Yes, certainly, but I think mine better."

"Let us see yours, then."

Our entrepreneur is doing well so far. He has quelled the investor's concerns about the competition with a business plan that has as one of its key features the intention of operating by stealth rather than meeting his formidable competitors on their ground. That is a wise approach. He has also deftly deflected the less-knowedgable investor in his attempt to meddle with the business plan. This, too, is important since having a micro-managing investor underfoot would only imperil the venture. D'Artagnan sticks to his plan just as he should since he, not the investor, has the expertise to develop a workable business plan and put it into action.

In the next installment, we'll continue the dialogue between Planchet and D'Artagnan and see the final part of the business plan and how D'Artagnan has arrived at his forecast of revenue and ROI (return on investment).

Musketeer as Entrepreneur (Part 2): Co-founders and Investors

Picking up from where I left off in the first installment of this fictional story of medieval entrepreneurship, I am going to omit a lengthy though important account of D'Artagnan's travels. What he does after resigning from the King's service is to attempt to build his A-class team of co-founders. These are the infamous three musketeers of the Dumas novel of that name: Athos, Porthos and Aramis -- the noms de guerre used by them while in military service to keep their true identities vague.

D'Artagnan has not seen any of these, his good friends, for many years and now goes to seek them out, rightly reasoning that the four together are a formidable force. In short, he could not pick a better team to accomplish his outrageously ambitious venture. In Dumas' hands, our hero is doing exactly as any entrepreneur should: choose a top-notch team that can not only execute better than any other but are certain to work well together and terrify anyone who would foolishly try to oppose them in any endeavour.

Regrettably for D'Artagnan, he can find none of them. The reader of the novel will know at this point that one of the three -- Athos -- has unintentionally become a competitor, while the other two do not play any role in this particular adventure. Now, before our entrepreneur can proceed to build a team that does not include his first choices, he needs to consider money. Indeed, lots of money will be needed, and he cannot self-finance on his modest savings from the military life. What D'Artagnan understands is that while his ex-musketeer friends would have joined him without any consideration of immediate funds, he is compelled to go with plan B and hire others. These others -- being mercenaries or employees, if you will -- will demand money as compensation for their efforts. That is why he is now in urgent need of an investor.

D'Artagnan knows where to find his ideal investor. He chooses Planchet, his former lackey (commoner servant). Planchet is flush with funds (of which D'Artagnan is aware) from his years spent as a successful small businessman since leaving D'Artagnan's service and also that of the military. D'Artagnan is well aware of this fact and, having invested his savings with Planchet, knows his man's financial acumen and greed. Further, these two men who are of similar age though of different classes know each other well and have many times had the other's life in their hands. They have never failed each other. In other words, here is a potential investor who knows D'Artagnan's qualities and can (perhaps) be persuaded to finance a very risky venture by his former master.

Therefore, D'Artagnan travels to Planchet's shop in Paris. Let's listen in as D'Artagnan makes his pitch:

"Ah! Planchet, it is very long and very hard to speak."

"Do speak it, nevertheless."

D'Artagnan twisted his mustache like a man embarrassed with the confidence he is about to make and mistrustful of his confidant.

"Is it an investment?" asked Planchet.

"Why, yes."

"At good profit?"

"A capital profit, - four hundred per cent, Planchet."

Planchet gave such a blow with his fist upon the table, that the bottles bounded as if they had been frightened.

"Good heavens! is that possible?"

"I think it will be more," replied D'Artagnan coolly; "but I like to lay it at the lowest!"

"The devil!" said Planchet, drawing nearer. "Why, monsieur, that is magnificent! Can one put much money in it?"

"Twenty thousand livres each, Planchet."

We see here a businessman who (as we learn) is accustomed to lending out his ready funds to needy clients at usurious rates, and he has become avaricious enough to want to do even better. This is an ideal venture capitalist for D'Artagnan's purpose: one with the necessary funds and ready to take on substantial risk for out-sized returns.

Now that the entrepreneur has explained the profitable exit for the investor it is time to speak about the business plan. It is an audacious one as you'll see in the next installment of this series.

Musketeer as Entrepreneur (Part 1)

Much has been written about the proper steps to starting up a venture-backed technology company, taking the new entrepreneur from the idea phase through to launch and execution. There are great many steps involved, yet some take to it like a fish to water while others stumble about, unable to master the process. It is true that some entrepreneurs are born that way, but for the rest of us, well, we need to learn how to do it.

Yet even without native talent, it is possible to learn how to be a passably-effective entrepreneur, and indeed many other skills we assume must have native talent as a prerequisite. To give an example, years ago I took a learn-to-draw class that promised that even a total incompetent can be taught how to draw. This promise intrigued me enough to give it a shot. Up until then my drawing ability was limited to barely recognizable stick figures. It wasn't easy, but with some diligent effort and paying close attention to the instructor I did manage some surprisingly decent portraits by course's end.

The purpose of this little sidetrack is that if a drawing incompetent like me could accomplish this small victory, surely we can all learn to be entrepreneurs. All we need is role models, good observational skills and a lot of hard work. This brought to mind an interesting role model, a historical but heavily-fictionalized character brought to life by the 19th-century French author Alexandre Dumas. The character is D'Artagnan, the fourth member of the group known as the three musketeers.

This set of several adventure novels -- collectively known as the D'Artagnan Romances -- follows this fellowship from the time that D'Artagnan, an unknown 18-year old son of a minor and impoverished Gascon aristocrat, entered the scene to make his fortune, through many adventures they had both together and separately, until the end of their lives. If you are at all interesting in adventure novels with accurate period depiction and strong character development, you should take the time to read the entire set. The plot lines are highly-tortured historical fiction that catch the essence and issues of the times that manage to illuminate true historical characters and events. The torture part comes from the extreme license Dumas took to weave his fictional characters and adventures into the historical record.

The selection of these books I will focus on comes from The Vicompte de Bragalonne -- in particular Chapters XIV through XXI -- which begins with D'Artagnan who, at the age of 54 is Lieutenant of the King's Musketeers and responsible for the security of a youthful Louis XIV, decides that after 35 years of service, much of it quite uninteresting and beneath his considerable talent (all very true), decides that it time to set out on this own to find his fortune elsewhere.

This is much like talented career junior executives in a company like Nortel who, while comfortable and making a decent living, are afraid that life and the road-less-travelled is passing them by. Unlike most, this particular junior executive has decided to act. The last straw was seeing his master humiliated by his own Minister -- Mazarin -- who hold the real power and wealth that by rights belongs to the king. Louis, barely twenty, like many ineffectual CEOs, sheltered from real power all his life, does what his Minister tells him to do since he is, as they say, without a clue. D'Artagnan, no longer willing to wait for Louis to grow up and assert his power (and thereby elevating D'Artagnan, or at least making his role greater than that of a babysitter), forces an interview with Louis. His objective is to tender his resignation. This is easier for you and me to do than it was for him since it is no easy matter to quit the king's service. Let's listen in to some key passages from our hero's side of their conversation.

If I were vain enough to believe only half of your majesty's words, I should consider myself a valuable, indispensable man. I should say that a servant possessed of such brilliant qualities was a treasure beyond all price. Now, sire, I have been all my life - I feel bound to say it - except at the present time, appreciated, in my opinion, much below my value.
...
For five years together, I was a hero every day; at least, so I was told by persons of judgment; and that is a long period for heroism, trust me, sire, a period of five years.
...
Oh, sire! what a word! - later! Thirty years have I lived upon that promising word, which has been pronounced by so many great personages, and which your mouth has, in its turn, just pronounced...So I change my formula, sire; and when any one says to me 'Later,' I reply '_Now_.'

Here we see that D'Artagnan, pushed beyond his limit, is prepared to walk out of a sure sinecure into the unknown. However he has known poverty before, and so does not greatly fear the loss of his salary. He also has some small savings, and friends, on which he can rely upon to get him by for a time, and which could finance whatever he might turn his energies toward. D'Artagnan is embracing the risk of an uncertain future since he has no clear plan as yet although he has developed a passion for an audacious idea that had come to him only minutes before his interview with the king.

That is another attribute of a entrepreneur: speed. Notice how he gets the idea, an insanely-difficult one at that, decides that he has what it takes to make the attempt, and acts immediately to begin his adventure. He does not dawdle and, importantly, does not spend the time to first develop a detailed business plan before leaving his employer; he has seen the market opportunity, is confident in his abilities and he now needs his freedom to apply his full energies to the problem.

Having achieved his freedom to act, in the next of several installments to this long blog post we will follow D'Artagnan as he attempts to recruit co-founders and approaches an investor with the funds to finance his nascent enterprise. We will also learn what his enterprise will attempt and how he expects to earn a return on investment.

New Startup Fund

I was surprised when I stumbled across this article about Terry Matthews spearheading a new fund for technology firms. This should be positive for Ottawa even though the article states that the fund will invest in firms throughout Canada.

It is of course too soon to know exactly what stages of companies will be targetted by the fund, especially whether it would invest in angel rounds. Yet knowing Terry's continuing interest in fomenting activity at the earliest point in a company's life-cycle I have some hope that the fund will address this gaping hole in the present startup situation here in Ottawa. Angel financing is critical to getting many excellent product concepts off the ground and running sooner and more effectively. Too many now die in the bud or move too slowly because the founders can't afford to leave their salaries behind to focus their energies on their nascent businesses.

All I can do is wish him luck with closing this $100 million fund. I know people and ideas that could use this fuel to build momentum for their dreams.