So you want to launch a business...

An entrepreneur has to be a pig.

Goals imply permission to fail.

How can that be?  Isn't a goal something to which I aspire?  Something I want?  Something I hope for?  Yes, but aspiring, wanting, and hoping are not typically sufficient for succeeding.

Andrea Chilcote introduced me to the power of "taking a stand", that is, making a firm and public commitment to accomplish a particular, clearly defined task that is a requirement for me to get "what I want", whatever that may be.  Commitment goes well beyond "positive thinking" or "intent". 

I remember a great wall plaque I once saw in a minister's office.  "If you're going to pray for potatoes, you'd better have a hoe in your hand."  And there's also that good old joke about ham and eggs.  The chicken, it says, is involved.  The pig, however, is committed.  Good old jokes are like common wisdom, by the way, which is common because it really is wisdom.  They hang around long enough to get old precisely because they really are good.

Once upon a time goals were a key part of my textbook approach to corporate planning.  Until just a few years ago I stood firmly by the following list:  Mission; Goals; Strategies; Objectives: Tactics.  Those terms provide a very nice progression from a broad statement of purpose to operational details.  And I still believe they offer a very useful framework, particularly for multi-location, multi-layer organizations, with more employees than will fit into one decent-sized room.

But for a start-up, with a simpler situation, and with survival at stake almost on a daily basis,  COMMITMENT simply has to replace any and all goal language.  Wanting and hoping are not enough when everything is on the line. 

Try it for yourself.  Select one serious requirement on your path to success, something that is do-able and measurable.  Now, go stand in front of someone whose approval you desire and respect, and tell them you will accomplish that task, by date certain.  Not that you intend to do it, or hope to get it done, or will have it substantially complete, but that you WILL DO IT.  Period!

Drop me a note and let me know how it comes out.

Common Wisdom - Features, Benefits, and Feelings

Anne Giles Clelland recently had this to say about the features of her blog Handshake 2.0:

"I love my product’s features.  Clients, my fellow Concept Camp attendees made very clear to me, will love the benefits."  She added, "I admit that the benefits of my product have huge business value.  But I love the art and craft of its features."

Anne is not alone.  Most creators seem to be romantically involved with their creations.  Given the time, energy, and "soul" required to create, that should not be not surprising, I suppose.  But when it comes to turning those creations into cold, hard cash, benefits have to trump features; and feelings trump benefits.

What?  Jim has to be kidding, right?  No, I'm not.

Common wisdom is common because, when tested, it generally turns out to be true.  The common wisdom on features, benefits, and feelings goes something like this:

Both large opportunities and big problems create feelings of discomfort.  Most people prefer comfort to discomfort.  To regain the comfort feeling, people tend to respond well to some set of product/service benefits that will permit them to feel that they have found a way to take advantage of the large opportunity or to solve the big problem.  The features merely deliver the benefits that enable the preferred feelings.

If you don't believe me, just search on "features and benefits" and see what pops up - common wisdom.

Riding the Wave

By far, the easiest path to entrepreneurial success is to ride the wave of a fast-growing market.  If the underlying growth fundamentals are strong, you can grab on, hold on, and be carried to prosperity.  You don't have to excel, just survive.  Even if you slightly under-perform the market, you'll be OK.

A good friend of mine sold his family's business a few years back and is living quite comfortably on the proceeds, thank you.  He had inherited the company from his father, managed not to wreck it, and can now devote significant time to civic and charitable causes.  The enterprise was a wholesale distributor of various disposable products such as paper towels, napkins, plastic-ware, light bulbs, and such. 

The founders took the plunge shortly after World War II, at a time when there was really no significant disposable industry.  Before the war, almost nothing was disposable except toilet paper.  The world was in economic depression.  Plastics were rudimentary.  Towels and napkins were cloth.  After the war, the returning GIs went to work in the newly booming auto and construction industries.  They had money to spend, and the necessary technologies were in place.  Paper napkins, and towels appeared, followed quickly by paper plates and cups.  Plastic forks and spoons arrived on the scene shortly thereafter.  The rest, as they say, is history.

My friend's father told him that he and his partner had done nothing particularly well except to pick the right industry at the right time.  Beyond that, their performance was painfully average.  Still, they prospered; and my good buddy is glad they did.

What newly booming market can carry you to prosperity?  Combine powerful market fundamentals with a compelling end-user need and you might hit a home run.

Two Important Questions

I have a great job.

Inventors who are exploring entrepreneurship come to see me and discuss their dreams.  They are without exception interesting and exciting people.  They swell with enthusiasm as they describe their visions for the future.  And almost all of them have something that is truly unique and intellectually fascinating - cool stuff.  I get to share in that excitement.

Unfortunately, many of them are missing a solid reason for taking their inventions to market; and it's also my job to point that out, to take some air out of the balloon.  They have mistaken "everyone can use my invention" for "my invention solves a very serious problem for a certain group."

Quite often everyone (or at least a significant number of people or companies) can, in fact, use the invention.  That they can use it, does not guarantee that they will choose to use it.  The inventor believes they need it; but they may not agree.

Successful product/service introductions typically address a compelling end-user need.

Here are two important questions:

• Do your targeted end-users clearly express an urgent need to solve a problem that they consider to be serious?  Key words - clear, urgent, serious.
• Does your product/service address that problem powerfully and directly?  Key words - powerful, direct.

If you can answer "yes, absolutely" to both these questions, then you may, in fact, have identified a solid Market opportunity.  There are other questions and answers that must follow, but you're probably on a path worth exploring, at least for a while.

Strategic Essence

VT KnowledgeWorks offers Concept Camps several times each year.  We take a handful of prospective entrepreneurs to secluded cabins at Mountain Lake Resort and explore the strategic essence of their business concept, the realities of entrepreneurial commitment, some business fundamentals, and the overall business start-up process.  What is strategic essence?  For practical purposes it's your elevator speech.

What's that?  Look at it this way.  It a way to explain your business in the time it takes to ride the elevator from the hotel lobby to your destination floor - perhaps a minute, probably less.  If you don’t get somebody’s attention in the first minute or so, you’ve probably lost them forever, even if they politely pretend to listen longer.  In describing your prospective business that amounts to communicating three things, clearly and concisely.

• What will you do? 
• For whom will you do it? 
• Why will they care?

Our campers prepare and deliver those speeches at least four times over the course of the two day retreat.  What's the big deal, you say?  How many times will I really ride that elevator?

The answer is "countless times".  Here's who is listening:  prospective partners, prospective employees, prospective investors, prospective allies, and, most important, prospective customers.  And, by the way, it's not a bad idea for the owner/founder/entrepreneur to be personally clear on the essence of the business, either.

Daniel Boone was an entrepreneur

Mentors

Daniel Boone, someone told me, was asked whether he had ever been lost.  Being both an entrepreneur and, apparently, a consummate spin doctor, he is said to have replied. "No, I've never been lost; but once I was bewildered for three days."

Ol' Dan'l was out in the woods with no one to provide him fresh information or directions.  You may be out in the woods, too; but there is plenty of help around.  Will you use it?

In my experience, few people are really interested in other people’s opinions; and almost nobody really wants advice, especially entrepreneurial types.  But as good as you are, you can’t possibly know it all.  We both know that.  You’re reading this, so you’re at least toying with the notion that you might be able to use some assistance.

Who will help you?  Mentors, that's who.  Mentors are one of the First Four Factors, along with Market, Magic, and Moxie.

Business assistance generally arrives in one of three forms - information, opinion, and advice.  Get the information you lack as quickly as possible. Listen to the opinions, even if you disagree with them.  Ask for advice, even if you don’t plan to take it.

You can’t do this alone. Get experienced help immediately – lots of it. The very best way to reduce your risk is to run your assumptions and strategies past lots of experienced people.

Of course, then you actually have to pay attention to what they tell you.  From time to time, I have found it useful to consider the remote possibility that I might be wrong, or at least mistaken.  You might find that useful, too.

Why start-ups fail...

Ouch...

The vast majority of newly-launched companies fail within the first year or two.  Numerous well-funded studies have investigated this phenomenon attempting to pin down why it is so.  Every vital component of the classic business plan has been poked, prodded, and x-rayed.  Was their timing bad?  Were they under-capitalized?

Consider this.  Perhaps they were simply started by the wrong person.

It is well-known that venture capital flows most easily to management teams composed of people with previous histories of success, not to earth-shaking ideas.  Great ideas are everywhere.

As you plan your own business adventure, self-examination is quite possibly a much more vital activity than a market survey.  Market information must be interpreted.  A biased interpreter, blinded by the romance of entrepreneurial visions, can easily see opportunity where none exists.  That same romance can fuel an early burst of energy that fizzles out, leaving the hard work unfinished.

Are you in danger of romantic blindness?

Do you have what it takes?  Persistence, as Calvin Coolidge said, makes more difference than any other factor.  Do the people around you have the same level of commitment as you?  Can your family take the heat?  Can your wallet stand the strain?

Acknowledging risk is the first step toward reducing risk.  How much might this adventure cost you, emotionally, financially, physically?  What is your tolerance for these risks?  What are the real consequences of failure?

Launching a company is patriotic

According to a recent government study , almost all the new jobs created come from "high-impact" firms.  Moreover, during the 1994–2006 period, firms with fewer than 20 employees represented 93.8 percent of the high-impact firms and 33.5 percent of job growth among high-impact firms.

In simple terms that means that small companies contribute about a third of all new jobs.

What could be more patriotic, then, than launching a small company?  I'll tell you.  Launching one that survives and grows.

Survival and growth depends, at a minimum, on the right person launching an enterprise that addresses a compelling marketplace need with a differentiable and defensible product or service and plenty of good advice along the way.  In my shorthand, that boils down to Moxie, Market, Magic, and Mentors.

START WITH MOXIE.

Introducing START WITH MOXIE - my very first post

Useful stuff presumably follows...

A friend once said to me, “You can’t convince anybody of anything.  You can only give them more information.”  And Plato quoted Socrates as saying, “I cannot teach anybody anything.  I can only make them think.”
 
This blog is intended to provide some information that may be new to some readers, and to encourage critical thinking.  My bold presumption is that the extra information and consequent critical thought will reduce the risk in your entrepreneurial adventure and increase your chances of identifying and obtaining what you really want.

The posts will be intentionally short.  I don’t believe that any business author can hold the attention of a true entrepreneur very long.  I am likewise convinced that the essence of most things can be boiled down to handy rules of thumb, which is quite useful to people in a hurry – most entrepreneurs.  Of course, the disclaimer is that life is never quite that simple and no rules work all the time, maybe not even most of the time.  Care is recommended.

What follows here will take three forms: information, opinion, and advice.  These are important distinctions, in my opinion.

• Information is neutral data.
• Opinion is someone’s interpretation of that data.
• Advice is instruction on how to react to that data.

In my experience, few people are really interested in other people’s opinions; and almost nobody really wants advice, especially entrepreneurial types.  Sadly, in the interest of brevity, clarity, and emphasis, I’ve decided to include both opinion and advice anyway.  I just couldn’t help myself.