So you want to launch a business...

Mistakes

"Experience is the name everyone gives to their mistakes."  

                                                         Oscar Wilde

But some experiences are best avoided in the interest of time, money, and pain.  I suggest you consider avoiding some of the most common mistakes made by entrepreneurs.

DO NOT...

• Ignore market information that does not conform to your preferred view of the world.The Market is always right.

• Crash ahead in spite of strong and obvious reasons to stop, or at least to review strategies.  Sometimes the Magic just doesn’t work.

• Think too small. Some businesses just won’t work below a certain critical mass.Review your Model, both Market-wise and Money-wise.

• Think too big.  Companies like Microsoft and Google only come along once every 20 years.  Modesty is always in vogue.

• Insist that a product be perfect.  Excellent is good enough, requires less Money,and may actually get to Market.

• Hire a résumé instead of a person.  Teamwork is essential to success.  Perhaps the most critical Management skill is hiring.

• Fail to get professional assistance.  You wouldn’t remove your own appendix.  Don't try to practice law.

• Compromise your principles.  Your self-respect follows you everywhere.  And you can only lose your reputation once.

• Lose track of your Motivation.  Your business should be an extension of your needs and wants, not the other way around.

Bonus points

"Treasure your relationships, not your possessions."

   
Anthony J. D'Angelo

If an entrepreneur earnestly engages with the various people who are willing to help her, she will receive not only the help she seeks but also lasting bonds of trust that transcend the current moment.  She has at that point recast her entire future.

Keith Ferrazzi's new book, Who's Got Your Back: The breakthrough program to build deep, trusting relationships that create success - and won't let you fail, points out that success requires a dependable team of Mentors. 

He is not the first, nor the last, to celebrate such bonding.

When you find a Mentor, you not only find the information you need to address your current situation; you enrich your life with a friendship.  And you receive the opportunity to enrich another in return.

Those are bonus points.

The first day of the tournament

"You can't win a golf tournament on the first day, but you can definitely lose it."

Anonymous

Tiger Woods reinforced this old saying last week.  The four shots he surrendered to par in a four hole stretch in the first round of the PGA Championship cost him a finishing round tie and a chance to win.

The same holds true for starting a business.  You can't guarantee success at the beginning; but you can certainly make failure very, very likely.

How, you ask?

By falling short on one or more of the Four Fundamental Factors: Market, Magic, Mentors, or Moxie.

In the Market area, you can select a target group with little or no built-in growth potential.  Or you can fail to address a truly compelling need or want.

If your product carries no Magic, is not unique or powerful in some way, no one will notice anyway.

Mentors provide a wealth of information that will enable you to lower risk at every turn.  Without them you are totally on your own - not a good idea.

And finally, there's the Moxie.  Ah, the Moxie.  Without a generous supply of it, you will most likely just give up.  You will surrender.  The challenge will cease to excite you and will instead wear you down and then defeat you.

If you are thinking about launching a business, it's the first day of your big tournament.  Put yourself in a position to win!  Review your chances right now.

Magic, Mutuality, and Moxie

"Good ideas alter the power balance in relationships, that is why good ideas are always initially resisted. Good ideas come with a heavy burden. Which is why so few people have them. So few people can handle it."

Hugh Macleod

"Relationships of trust depend on our willingness to look not only to our own interests, but also the interests of others."

    Peter Farquharson

It's really tough to work your Magic on a Market, even one with a truly compelling need of some sort.  There's typically somebody who stands to lose when you win.  In the strange and wonderful world of business writing, we most often call those losers competitors or substitutes.  But, to be honest, that's a bit too simple and obvious to deserve any extended commentary.  There are, however, other important groups of potential losers that should be considered by innovative entrepreneurs.  They are lurking in the bushes waiting to derail your magical train.

Take, for example, suppliers to the competitors.  If your entry stands to hurt them, they will work against you.  Period.

And what about distributors of the competitors' products?  Same story.

And, horror of all horrors, individual customers may be personally wedded to the competitor by a bond forged in the "old" technology.  The internal client expert may have bet his or her career on your competitor's product line.  To switch to yours may invalidate a lifetime of subject-matter-expertise.

What to do?  These impediments to your success cannot simply be overwhelmed by your Moxie.

Build relationships with them.  Align with the potential losers.  Figure out how to make them winners, too.  Use your competitor's supplier.  Make a sweet deal with his distributors.  Transform the internal technical gatekeeper into an expert in your technology.

In a complex, competitive environment it's well-nigh impossible to make everyone into a winner.  But you can quite often prevent some of them from being losers.  That frees you to focus your Moxie on your strategic center.

“Entrepreneurs are simply those who understand that there is little difference between obstacle and opportunity and are able to turn both to their advantage.”

Niccolo Machiavelli

One deal at a time...

"In the modern world of business, it is useless to be a creative original thinker unless you can also sell what you create. Management cannot be expected to recognize a good idea unless it is presented to them by a good salesman."
                                                                                                        David M. Ogilvy

Please, please, never count on capturing 5% of the Market.  There is no such thing as 5% of a market, any market.  Market share is just a convenient way of counting up many, many individual transactions.  And each transaction proceeds (or does not proceed) according to its own unique set of parameters.

The most puzzling and challenging of those parameters is the set of people who are party to the deal.  And the person who figures out how to make all those parties come to agreement is called a salesman.

Figure out how to facilitate many transactions and you will be known far and wide as a rainmaker.

And true rainmakers never forget that every deal is a new one.

Motivation matters!

"We are told that talent creates its own opportunities. But it sometimes seems that intense desire creates not only its own opportunities, but its own talents."

                                                                                                    Eric Hoffer

Prospective business founders often worry about protecting their inventions.  They fear that someone will steal their idea and beat them to the payoff.  I do my best to assure them that they are much safer than they suppose.

That something can be done does not mean that it should be done.  And it most certainly does not assure that it will be done.  I think it is safe to assert that people attempt difficult actions only under the most compelling circumstances.  And starting a business qualifies as a difficult action.  That's just plain true.  You can look it up.

My experience told me long ago (Yes, I'm getting on in years.) that most people lack the MOXIE to take action even on their own greatest ideas.  So, by logical extension, I never fear that someone might pilfer my creative thoughts and act on them. 

Ideas do not automatically transform themselves into financial success.  What really matters is the motivation that fuels the MOXIE that delivers the energy and persistence required to turn ideas into actions that ultimately create value for a client.  (Wow, that's a long sentence.  I'll get some heat for that from Mr. Clarity.)

And, never forget, even with lots of MOXIE, you still have to address a real Market with some powerful Magic and the wisdom of any number of solid Mentors.

Core Competency

"A Core Competency is a deep proficiency that enables a company to deliver unique value to customers."                                                                                                                                         Darrell Rigby, Bain & Company

Thoughtful review of this simple sentence points us to some powerful fundamentals.  Let's start at the end and work backward.

Customers.  Who are Customers?  They are members of some market group who have acted (or will act) on a specific compelling need, either a problem or an opportunity.  Find them and you find your own particular Market - one of the Four Fundamental Factors governing your success as an entrepreneur.

Unique Value.  What is Unique Value?  It is the combination of ingredients that causes a Customer to choose your offering to address that compelling need.  Define that Unique Value and you have found your Magic - the "unfair competitive advantage" that will set your start-up apart from the competition - another one of the Four Fundamental Factors.

Deep Proficiency that Enables.  That's clear enough.  It's how you get that Magic that you just defined.  If you do not already possess that Deep Proficiency, you'll have to cultivate it before you launch.  Here's how.

Make at least three copies of the simple outline that appears below.  You fill out one of them.  Ask two or more of your Mentors to do the same.  (Mentors, by the way, are the third Fundamental Factor.)

I’m facing a wall.  Success is on the other side.  If my new enterprise is to succeed, to penetrate the wall, it must excel at each of the following Three Dominant Competencies:

1.     
2.     
3.     

I will gauge progress toward the Mastery I seek according to these clear Measurability criteria:

1.     
2.     
3.     

If there is some level of disagreement on your Three Dominant Competencies (and that is highly likely), debate the issues until opinions converge.

The fourth and most important of the Four Fundamental Factors, in case you were wondering, is MOXIE.   More on that in other posts.