Bill Reichert doesn't have anything against MBAs. Heck, he has an MBA from Stanford. But the president of Garage.com has some pointed advice for his peers: get your noses out of the textbooks. In the second installment of his top ten myths of venture capitalists, he shoots holes in the "gap analysis" taught by business schools and deflates four common misconceptions. "I piss off just about everybody," he says with a hearty, unmistakable laugh.

Myth No. 5: Find a need and fill it.

The reality: Anticipate a need and invent a market. As the great hockey pro Wayne Gretzky said, "Skate to where the puck is going to be."

Mr. Reichert calls it his "anti-MBA business model." Too often, entrepreneurs get caught in the standard "gap analysis" they're taught in business school. That framework urges business people to research a market, identify gaps between what customers want and what the market provides, and then fill the gaps. Seems like a reasonable approach. The problem is that in today's high-speed Internet economy, gap analysis doesn't go far enough.

You must look beyond the gaps to where that puck is headed. Getting trapped by "gap analysis" won't get you there. "The gap in the market right now isn't going to be a business opportunity in 18 months," Mr. Reichert says. "If the gap is that visible or that important, someone is going to address it faster than you or leapfrog it altogether."

Remember that the problems of gap analysis may emerge later in the development of a company, not just at the business-plan stage. Mr. Reichert recalls a board member who came back from a tradeshow and was high as a kite about interactive TV and wanted the company to change its strategy. "There was huge pressure on us to shift the model to interactive TV, but fortunately we resisted," he says.

Myth No. 4: If you build it, they will come.

The reality: Anyone can build, but can you execute?

"As opposed to the MBA-driven business model, this is the engineer-driven business model," he says.

This may sound old hat, but don't get caught up in gee-whiz technology. Mr. Reichert says the problem still is very much with us. Even when it isn't readily apparent, it's bubbling below the surface. Based on my correspondence with entrepreneurs, I agree.

"Entrepreneurs are trained well enough so that they say, 'No, no, no. We're not technology driven,' or 'this isn't a field of dreams,'" he says. "But deep down in their heart of hearts, they feel that if their idea sees the light of day, the world will beat a path to their door."

The bottom line -- as you've heard time and time again -- great technology isn't enough. Steve Jobs has a great technical mind, but he's also a hell of a salesman. Too often Mr. Reichert sees entrepreneurial teams that lack the person or people who can sell ideas to new employees, business partners, customers, and investors. "You've got to sell all the time, and that's what makes the difference between a success and a failure."

As Garage.com cofounder Bill Joos says, "It's not enough to build a better mouse trap. You must really want to kill mice."

Myth No. 3: Someone will steal my idea.

Reality: They already have your idea -- and the next one.

Entrepreneurs keep making the same mistake on this count. I usually get at least one email from an entrepreneur every one or two weeks asking how he or she can protect his or her killer idea when VCs won't agree to a nondisclosure agreement. That's the risk you take. If you pitch your idea to a VC, you're right to be concerned about someone ripping it off -- or the VC distilling the information and passing it along to a company he or she already funds in your space. However, if you don't pitch the idea, you're never going to get funded, and your company will forever be a bunch of words scribbled on napkins.

Mr. Reichert laughs when he recounts a "favorite" story underscoring his point. A bright-eyed entrepreneur approached him at a conference. She said she had an amazing idea and was recruiting a team. "That's great," he replied. "Why don't you send along your executive summary." She wouldn't do that unless he signed a nondisclosure agreement. So he said, "OK, then just tell me the name of your company so I can keep an eye out for it if you decide to pitch it." She wouldn't do that either, explaining: "If I told you, it would give it away." (Rim shot!)

It's not enough to have a great idea. You need some kind of "unfair advantage." "You should be able to articulate a compelling business idea that you can win, even if the entire world knows you've got this idea," he says. "You've got to have some unfair advantage -- domain expertise, a relationship, a technology, or something else other than the uniqueness of your idea."

In a previous gig at The Learning Company, Mr. Reichert's unfair advantage was the company's backing by Josten's Learning. It wasn't enough that The Learning Company had a great idea to develop online instructional materials for colleges and universities.

Myth No. 2: VCs don't get it.

The reality: Unfortunately, they do. Make sure you understand their feedback.

"Generally, VCs are pretty smart people," he says. "They know a lot more about certain things than you do. So you should take advantage of the opportunity to learn and not just dismiss them as bozos."

The main point here is that it's too easy to blame VCs if they take a pass on your idea. "Oh, they just don't get it," is a frequent refrain. I won't go so far as Mr. Reichert to say that all VCs get it, especially these days when starting a VC firm is as trendy as Regis Philbin's monochrome shirts and ties. You need to do your homework and know who you're talking to.

I agree with Mr. Reichert's advice: When you're going to pitch a VC, take someone with you whose sole purpose is to observe and take notes. That person should write down the exact questions that were asked, the body language of the VCs, what piques their interest, and any other clues about the concerns of a business plan. Even if you don't get funded, you have invaluable information that you can use when you pitch to the next VC.

Myth No. 1: Our projections are conservative.

The reality: "Lies, damn lies, and business plans."

This is just a short piece of advice to keep entrepreneurs from embarrassing themselves or losing credibility with investors. Mr. Reichert has a lengthy list of things you should never say to a VC, including "our projections are conservative," "there is no competition," "we're going to sign a contract with XYZ company next week," and "ABC competitor can't move fast enough."

VCs have heard these claims over and over again. "Entrepreneurs don't realize that these are big red flags for investors," he says. Do yourself a favor and don't repeat them -- even if you honestly believe they're true. Just focus on the fundamentals of your company and how you're going to win. Don't make statements on which you can't deliver. For example, if you don't have a contract in hand, don't suggest that your inches away from landing Cisco as a customer.

NEXT TIME: Mr. Reichert will field readers' questions. Send them in as soon as possible.

EDITOR'S NOTE: Forgive me for putting on my marketing hat again. I'm trying to spread the gospel about our new daily VC newsletter, Dealflow. It isn't an amalgamation of retyped press releases, like other newsletters. Our reporters call VCs and CEOs to get the real story. Check it out and let me know what you think. If you subscribed last week, when I first plugged Dealflow, drop me a line and let me know your honest opinion. Get your free Dealflow in your email by subscribing here.

Do you disagree with Mr. Reichert's top 10 list? Are VCs, for example, really bozos? Let us know in the VC P.S. forum, or visit the forums home page.

	SNAPSHOT
	COMPANY		Garage.com
	HEADQUARTERS		Palo Alto CA
	FOUNDED		1998
	TOP MANAGEMENT		Guy Kawasaki, founder, CEO, and chairman; Bill Reichert, president
	DESCRIPTION		Helps seed- and early-stage technology companies raise funding from a qualified pool of venture capital firms, angel investors, and corporations
	TRACK RECORD		Helped 40 startups raise more than $101 million in 1999
	SAMPLING OF INVESTOR MEMBERS		ETrade (Nasdaq: EGRP); Advanced Technology Ventures; Mayfield Fund; Ben Rosen, chairman of Compaq (NYSE: CPQ); Federico Faggin, CEO of Synaptics; and George Gilder, egghead and president of Gilder Technology Group
	NOTEWORTHY		In February, the company filed a registration statement with the Securities and Exchange Commission to go public. That same month, it raised $27 million from a lengthy list of top-tier investors, including Seqouia Capital, Goldman Sachs (NYSE: GS), and MSD Capital, Michael Dell's private investment firm.
	MR. REICHERT'S RESUME		Mr. Reichert spent five years as a consultant, doing stints at McKinsey as well as joining two ex-McKinsey alums to start their own consulting firm. He also cofounded five companies, one of which went public (Academic Systems) and one that was sold (New Venture Consultants). He also helped turn around The Learning Company. Not everything he touched turned to gold. He fell into the pen-based computing hoopla with Infa Technologies and got burned like everyone else.
	PERSONAL		The Chicago native is married with three kids. A closet curler, he was the "skip" of the "rink" that made it to the Illinois state junior championship final.