So you want to launch a business...

Beware of MOXIE goggles!

"Consult your friend on all things, especially on those which respect yourself. His counsel may then be useful where your own self-love might impair your judgment."

- Seneca

 

A few months ago Anne Clelland asked me how an aspiring entrepreneur might tell when it's time to quit, when the handwriting on the wall has reached billboard proportions.

"How, indeed?" I replied via her blog.  "What if they stop too soon?  What if they continue, for apparently valid, but faulty reasons?"  [Read more at Handshake 2.0.]

Here's a related question, connected to one of the most common entrepreneurial mistakes.  "Is my enthusiasm clouding my judgment?"  

Unfortunately, I regularly meet people for whom the answer to that question is a resounding "YES!"

Inventors really love their inventions.  In fact, they often love them so much that they cannot recognize apathetic responses from their intended buyers.  It's not just that they don't believe negative feedback. They cannot process it at all.  Their beliefs are so strong that they exclude from consideration any and all information that might generate doubt.

A Market is an identifiable population of individuals or organizations that shares some compelling situation - a need or want.  Yes, it's that simple.  A population with a situation.

The MOXIE-blinded inventor sees a population where none exists, or a situation that is anything but compelling.  

That's why Mentors are one of the Four Fundmental Factors common to successful entrepreneurs.  Honest Mentors can/should improve clarity of vision for the over-enthusiastic inventor.  

So, if you are the inventor, find yourself a mentor who is not MOXIE-blind.

If you meet an entrepreneur on the street, check for MOXIE goggles.  If they are in evidence, smash them!

 

@nametagscott goes for the throat!

Three Tweets from @nametagscott...

LET ME SUGGEST THIS: If your idea is your passion, but doesn’t have a viable market, you lose.

LET ME SUGGEST THIS: If your idea is intrinsically appealing, but something you suck at, you lose.

LET ME SUGGEST THIS: If your idea is sellable, but something you would hate doing for thirteen hours a day, you lose.

If you're an entrepreneur, or might-be entrepreneur, or wanna-be entrepreneur, and you haven't stumbled on @nametagscott, you're missing a great chance to be profitably uncomfortable.

Scott Ginsberg tries his best, and usually succeeds, to jolt people out of their warm, fuzzy places, and to enable them to take a fresh view of reality.  He's a little bit crazy, but that's what makes him memorable.  And he knows he's a little bit crazy.  That's what makes him effective.

A while back I posted about mental mildew, its effects, and some ways to combat it.  Where mental mildew is concerned, Scott and others of his ilk, are full strength Lysol.

So why did I pick these particular bon mots from among Scott's 3,569 tweets to date?  To be honest, they first caught my eye because they were all tweeted together, and had a nice symmetry of construction.  They were well-constructed from a presentation and persuasion standpoint.  (I said Scott was a little bit crazy.  I didn't say he hadn't mastered his craft.)  Once they had caught my eye, however, I noticed that they validated my own assertions for entrepreneurs.  That was flattering to old Jim Flowers, believe me.

Validated how, you ask?  Here's how. 

Scott, the Mentor, tweeted a set of three go-for-the-throat assertions that landed squarely on Market, Magic, and Moxie.  Yep!  Every successful startup involves a real market, not one the entrepreneur dreams up.  And the new company has to execute in a magical manner that sets it apart from the crowd.  And the founder give everything to the venture.  He has to outwork his competition.

Thanks, Scott.

There really isn't that much new stuff in the world of business.  But there can always be new ways of expressing the ancient truths.  And those new ways can provide moments of high insight to people who have been lulled to sleep by the old words and phrases.

Four ways to make sure your startup flops

"Fail fast.  Fail cheap.  Live to fight another day."

- Anonymous

Well, these four tips, if you follow them carefully, can almost guarantee that your startup business will fail.  Fast and cheap are always relative.

• Come late to the party.  It's scheduled for 8.  8:30 or 8:45 should be no problem.  You have plenty of time to wash the car before you get cleaned up.

You've probably managed to arrive late for a party at some time in your life.  I have.  What was it like?  See if this sounds familiar.

First, nobody notices that you have arrived.  The host is no longer hovering by the door to greet you.  All the timely guests have formed closed groups and are engaged in earnest conversation.  The best hors d' oeuvres are gone.  And everyone is at least one drink ahead of you. 

Palm Pre was late to the smartphone party.  Need I say more?

• Copy the most successful competitor.  It's the music that sells, not the band.  I have hundreds of CDs by bands I've never seen in person.

See if this is who you want to be.  I just grabbed it off the web.

"Almost Famous is one of the best cover bands around today. That's a bold statement, but it's exactly what you'll be saying after you experience one of their shows. With a completely fired-up & kickass stage show, Almost Famous combines pure hedonistic rock & roll debauchery with some of the most talented musicians in the NY Metro Area...the majority of whom have been signed to major labels or recorded & toured with major acts around the globe."

And now they're almost famous.  I'll bet they're almost rich, too.

And don't forget the all the rich Elvis impersonators.

• Don't sweat the details.   Attorneys and accountants are always crying wolf, just to grab some big fees.  Charge ahead.  You can always clean up any small messes later.  Right?

OOPS! 

"BlackBerry maker Research in Motion agreed to pay $612.5 million to patent holding company NTP to settle a long-running dispute that had threatened to shut down the popular wireless e-mail service for its 3 million users." Their PR team tried to spin that as a reasonable licensing fee.  Um hm.

And there was Enron, etc, etc.

• Don't try very hard.  After all, the libraries are full of biographies of famous people who became incredibly successful by dabbling in things on a part-time basis.

Yeah, right.

OK, I'll re-state the obvious, just in case. 

• Find a Market you can enter early, so you can ride the growth wave.

• Create some Magic that sets you apart from the ho-hum competition.

• Enlist a good batch of Mentors who can point out all the possible not-so-obvious pitfalls.

• And bring along enough Moxie to see you through the tough times that always come.

How to deal with lawyers

Question from a reader:  I just got a $3,000 bill from my lawyer that I wasn't expecting.   What should I do?

Above all, remember this.  Good legal advice is a good investment.  Time and again I hear sad stories of good companies seriously damaged, or even destroyed, by the fine print.  We all wear seat belts when we drive.  Your attorney is one of the seat belts of your business.

Unfortunately, unlike seat belts, attorneys are not simple to operate; and they do not come come with owner's manuals.  The good news is, however, that they are like computers.  They will do what you tell them to do - quite literally.  Clear and precise instructions are crucial - in writing.  And the instructions have to be clear to them, not just to you. 

If you tell your attorney to protect you from any possible danger, you will get a document for the ages, and a bill to match.  Seat belts do not protect us from infectious diseases.  Likewise, complex contracts cannot remove all business risks.

Here's what I do.

First, I do my homework.  The business deal belongs to me, not to my lawyer.  It's my responsibility to get it right.  So, I rough out the agreement I think I want, usually just with bullet points.  Then I ask my lawyer to review the points, to let me know whether they are reasonable, and whether there are any specific issues I may have overlooked.  That doesn't take long and doesn't cost much.  Sometimes I even specify the number of hours I want her to devote to the review.

Once the review is complete, and I have a complete list of bullets, I ask how long it will take and how much it will cost to create an appropriate legal document incorporating all the bullets.  I do my best to avoid open-ended work assignments for my lawyer.

Any request I make to an attorney is a work order.  Attorneys sell time.  The hourly price depends on the experience level of the particular attorney.  I try to remember that I am buying hours of work, just as if I were hiring a teenager to do odd jobs around my house.  So I set boundaries, in writing.

If I have a surprise, like an unexpected bill, I remind her of the boundaries.  Her firm can make a client service mistake, and they can also correct it.  But, if it turns out that I was the one who inadvertently modified the boundaries, because I gave bad instructions, I pay the bill.

My lawyer wants my business.  I want reliable legal counsel.  We work together to create a relationship that is mutually comfortable and sustainable.

You and your attorney can do the same.

Seven-minute safety net for entrepreneurs

"All you need in this life is ignorance and confidence; then success is sure."

    Mark Twain

I sometimes wonder how far Mark Twain could jam his tongue into his cheek. 

Launching a business from a position of ignorance will not assure success.  That's obvious.  Entrepreneurs clearly have confidence.  It's part of what I call Moxie.  But they absolutely must avoid ignorance.  Duh.

Here's what I like to think Twain might have said, if he had been a business consultant, instead of one of the greatest humorists and social commentators of all time.

The Century of the Entrepreneur

"You can carve this in stone: the 21st century is the Century of the Entrepreneur. And the world is a better place as a result!"

Jim Blasingame

A few years back Jim Blasingame declared that we were entering the "century of the entrepreneur."  He listed four principal factors contributing to his conclusion: rapid advances in technology; an expanding view of market risk as exciting; a cultural shift in the definition of an appropriate work venue, with home now included; and broader public understanding of the power of equity participation.

Now, only ten years into the new century, we find ourselves in the midst of global turmoil.  Equity markets are undergoing major re-structuring.  Traditional weather patterns are now unreliable, disrupted by climate shift; and famine lurks.  Political and religious unrest abounds,including organized terrorism.  Piracy is most definitely back.  Yikes!

Was Blasingame wrong?

No, he was absolutely correct; but I'd like to offer a handful of of amendments to his list of entrepreneurship accelerators to be considered.

Technology shifts clearly stay at the head of the class.  Some specifics, however, are worthy of note.  In the industrial 20th century the ability to communicate globally began at near zero, but ended at universally available at almost no cost.  A business necessity that once demanded large corporations with economies of scale is now available to you and me, from any location.  And, on top of that, modest quantities of just about any product can now be economically transported around the globe in hours or days.

There are also some additional, less visible, but quite powerful, changes in the entrepreneurial landscape.  For example, computer-assisted design and manufacturing advances have radically reduced the time and cost of creating new products.   Once again, the scale factors required of 20th century industrial giants have been made available to individuals and small enterprises.  And the internet.  Ah, the internet.  Cheap marketing and advertising resources have never been so accessible.

BUT, the increasing cost of energy for transportation is driving many types of production, once centralized for economies of scale and moved around the world chasing cheap labor, to be re-de-centralized to be nearer to supplies of raw material and/or consumer markets.  (Sorry about the double hyphenation.  It just seems right, but only this once, of course.)  This is particularly evident in emerging trends in food production. Decentralization implies smaller units of production, which translates into the opportunity for entrepreneurial entries into markets formerly dominated by large organizations.  Global distribution of centrally, mass-produced goods (which was essentially a 20th century invention) is already falling out of favor, for straightforward energy cost reasons.

Risk is, of course, as Blasingame pointed out, exciting.  But it's still risk.  However, the recent economic shakeout definitely changed the relative attractiveness of entrepreneurship.  It suddenly became less risky.  What?  Yes.  Those stable, secure jobs in large industrial and financial institutions just aren't as secure as they once seemed.  The relative risk of personal entrepreneurship as compared to traditional employment options has been drastically reduced.  Which is better: being at risk and in the dark; or being at risk and calling the shots?

So, the 21st century entrepreneur can design and produce sophisticated products as quickly and cheaply as a large company, communicate with clients instantly, anywhere, and transport goods in small quantities on a global scale, all at a lower relative personal risk than ever before.

The Market is there.  The ability to perform Magic is more widely available than ever before.  If you have the Moxie, go find some solid Mentors, and give entrepreneurship a try.  Jim Flowers agrees with Jim Blasingame.  This is most definitely the century of the entrepreneur.  And making the world a better place should be a piece of cake.  There's unbelievable room for improvement.

Here's to the crazy ones...

Here's to the crazy ones, the misfits, the rebels, the troublemakers, the round pegs in the square holes... the ones who see things differently -- they're not fond of rules... You can quote them, disagree with them, glorify or vilify them, but the only thing you can't do is ignore them because they change things... they push the human race forward, and while some may see them as the crazy ones, we see genius, because the ones who are crazy enough to think that they can change the world, are the ones who do.

    Steve Jobs

Some people never go crazy. What truly horrible lives they must lead.

    Charles Bukowski

Part of being sane, is being a little bit crazy.

    Janet Long

Do something. If it doesn't work, do something else. No idea is too crazy.

    Jim Hightower

You have to forget about what other people say; when you're supposed to die, when you're supposed to be lovin'. You have to forget about all these things. You have to go on and be crazy. Craziness is like heaven.

    Jimi Hendrix

Some (maybe most) people don't understand MOXIE.  They shake their heads in disbelief when apparently intelligent, clear-thinking people decide to chase entrepreneurial dreams instead of finding good jobs that promise stability and security. 

This presents a special problem for all you start-up founders.  Not only must you identify and overcome all the obvious business challenges, you must also deal with all the skeptics among your friends, family, and the investment community.  All too often they fail to understand that you only look crazy - from their perspective, certainly not from yours. 

Sometimes they're right, though.  So it's not crazy to do one more re-check of the data, one more test of your assumptions.  Make sure you're intelligently audacious, not actually crazy.

Are you attacking a real Market, not one you have imagined?  Do you have some powerful Magic that will attract spell-bound clients?  Have you surrounded yourself with seasoned Mentors who can provide the information and perspective that you lack?

If your business concept can pass the Four Fundamental Factors test, you might even be able to convince the skeptics.  And sometimes the Magic really works.

And that's when Jimi is absolutely right.  "Craziness is like heaven."

Experts Agree. Best MOXIE Posts of 2009.

The polls are closed.  The readers have spoken.

The most popular, and presumably most useful, MOXIE posts from the past year are presented below.

1. How to eat a five hundred pound marshmallow.

The vast gorge that lies between noble intent and significant achievement is, of course, quite real, and widely documented.  Lofty goals are commonplace.  Noteworthy achievement?  Not so much.  And this is particularly true for entrepreneurs and their ambitious startup plans.  (More...)

2. Four really useful habits.

I'm pretty darned sure that these four things will take most anybody a long way down the road to achievement and contentment: clarity of vision, commitment to relevant action, adherence to noble principles, and focus.  (More...)

3. Success - Ten Traits Supporting Four Fundamental Factors.

"Success or failure of a new venture is determined very early, on the strength or weakness of only a few fundamental factors, four to be exact.  Those four factors are Moxie, Market, Magic, and Mentors."  (More...)

4. I'm not losing.  I'm learning.

For a scientist, an experiment that does not confirm the hypothesis is not a failure.  It is a useful stepping stone to a fresh hypothesis.  For a musician, a bad review provides clarity on how the performance can be improved.  For an entrepreneur, a rejected product is a clear message about the true needs of the marketplace.  (More...)

5. Secret Revealed!  How to Get What You Want...

One of the most common reasons given for pursuit of entrepreneurship is the need for autonomy, the need to be in charge.  Over and over again, unfortunately, I meet people who have become slaves to the businesses that were supposed to give them freedom.  That's just plain sad.  (More...)

6. The inconvenient truth about competitors.

A sadly pervasive startup mistake is the presumption that a market leader will not react forcefully or cleverly to the entry of a fresh competitor - or that there will not be yet another entrant, complicating the situation even further.  (More...)

Start-up Success - Four Fundamental Factors

I've been hanging around start-ups for a while - roughly forty years and counting.  Over that time the information I've collected has clustered together to convince me of three things. 

1. Success or failure of a new venture is largely determined very early on the strength or weakness of only a few fundamental factors, four, to be exact.

2. Those four factors are Market, Magic, Moxie, and Mentors.  If these are not "right", nothing else really matters.  It's not that a business with some weaknesses in these areas can't survive; but it's highly unlikely that it will flourish.

3. The most important of these factors is Moxie - the energy, conviction, and determination of the founder/entrepreneur, the leader.

There are always noteworthy exceptions to rules of thumb; but the fact that they are noteworthy means that the general rules are reasonably valid.

I test business concepts proposed to me on those Four Fundamental Factors; and I encourage potential entrepreneurs to test themselves in the same manner.  Similar encouragement applies to people considering association with early stage businesses - employees, investors, strategic allies, clients.

And I always, always look first to the fire behind the eyes of the leader.  I always START WITH MOXIE.

You can test your own entrepreneurial ideas against the Four Fundamental Factors by using my simple Four Factors Self-Check.

You can also watch and listen to me talk about all this on YouTube. 

I'm not losing. I'm learning.

"Life is like playing a violin in public and learning the instrument as one goes on."

    Samuel Butler

Breaking news.  You heard it here first!  Unskilled violinists don't receive much applause.  And off-target products and services don't sell. 

So, what happens to the aspiring violinist who cannot move his audience?  What happens to the entrepreneur whose first product flops?

My son is a musician.  His career choice has exposed me to all sorts of people and situations that would have otherwise been forever hidden from me.  A few years ago, we were visiting a college as part of the audition tour required of every music major.  During such visits the aspiring performer is interviewed and then demonstrates his skill for the professors who will be charged with transforming him into a reliable applause generator.  The parents wait in the hall.

The halls of these music institutes are festooned with all sorts of flashy concert posters and album ads, of course.  But they are also home to a wealth of inspirational materials.  Here is a keeper.

"Amateurs practice until they get it right.  Professionals practice until they can't get it wrong."

Wannabee entrepreneurs (and musicians) try only until they hit the first serious obstacle.  Then they lose, precisely because they believe they are losing. 

Winners keep at it until they succeed.  They win because they understand that they are not losing, but that they are learning.

For a scientist, an experiment that does not confirm the hypothesis is not a failure.  It is a useful stepping stone to a fresh hypothesis.  For a musician, a bad review provides clarity on how the performance can be improved.  For an entrepreneur, a rejected product is a clear message about the true needs of the marketplace.

Product acceptance is disappointing?  You have two choices.  Declare defeat and go find a job.  Or address the current biggest complaint and try again.  Then repeat the cycle as long as your Moxie holds out.

Ultimately, you will learn so much about your Market that you can't get it wrong.  You will have mastered your Magic.

By the way, the musicians and the scientists all have Mentors.  They are built into the system.  I'm just saying...

Good company leads to good company.

"When the character of a man is not clear to you, look at his friends."   

Japanese Proverb

In business, as in the more private parts of my life, I am known, at least in part, by the company I keep.  I am also supported and encouraged by those around me - or not, depending on who they are.  And I am informed and advised by those around me - sometimes to my delight, other times to my dismay - again, depending on what sort of people I have chosen to place at my side.

StartupBooster, Guna Deivendran, asks and answers some serious questions about our networks.

How many true friends do you have? Are you in touch with them on a daily basis? I believe many entrepreneurs don’t take this particular subject seriously before they go about starting their own new business. If you maintain your relationships, it will be one of the best tools you can tap into when you launch your new startup. In most cases, this will not cost you a penny. These are the people you can count on to provide you with some feedback for your new website, new service or a product. They are the people that can spread the words about your products and services. They are your free marketers when you are ready to launch your next startup.

I encourage every company founder who comes to see me to examine, cultivate, and expand that close circle of fellow travelers on the very, very bumpy road of entrepreneurship.  There actually is safety in numbers. 

What do other have to say about this topic?  As you might imagine, it is a very rich subject. Here is a tiny sampling.

"Friendship is born at that moment when one person says to another: What! You too? I thought I was the only one."

    C. S. Lewis

"If a man does not make new acquaintances as he advances through life, he will soon find himself alone. A man should keep his friendships in constant repair."

    Samuel Johnson

"You can make more friends in two months by becoming interested in other people than you can in two years by trying to get other people interested in you."

    Dale Carnegie

"My friends are my estate."

    Emily Dickinson

And, perhaps best of all, my friends, if they are truly friends, constant replenish my supply of Moxie.  They renew me with their spirits, so that I can stay focused on my vision, and committed to the actions that will make it real.

Now that's just plain cool.

Who you know is what you know.

It's not what you know, it's who you know...  because who you know is what you know.

Jim Flowers just become a real fan of Karl Fisch.  Read what follows and you may, too.  Here's a excerpt from a recent post on Karl's blog.

As I was thinking about this the other day for some reason an old phrase popped into my head.

    It’s not what you know, it’s who you know.

Now, I’ve never really liked that phrase because it seemed to elevate connections over competence, but I’ve also always realized that there has been some truth in it (whether I liked it or not). But for some reason my brain connected it with my musings about an “elevator pitch” for PLNs, [personal learning networks] and what came out was:

    Who you know is what you know.

Let me be clear, I’m not saying that there’s no need to know things – we all still need to know quite a few things, and how to do quite a few things. But I think that phrase is increasingly becoming true, that who you know – your PLN – more and more defines what you “know” and are able to do.

If you have a well-developed, well-nurtured learning network, and you have the access and the skills necessary to utilize it, then you “know” more than someone who does not. You truly have the ability for “just in time” learning. You can reach out to your PLN with a question, with something you want to know more about, and they can help you learn about it. Even if someone in your network isn’t an “expert” on the topic, more than likely someone in your network knows someone who is.

Thank you, Karl, for this incredibly useful clarification.  It bears directly on something I recently blogged on Startup Professionals Musings.  Relationships are unbelievably powerful tools for entrepreneurs - and for the rest of us, too, of course.  Every relationship is a potential Mentor, someone from whom I can receive interpreted information - not instructions, mind you - but the information I need to make better decisions.

Karl echoes and amplifies what my friend and colleague Anne Clelland says in her Handshake 2.0 tag line, "It's still who you know!"

Success - Ten Traits Supporting Four Fundamental Factors

"Innovation is the specific instrument of entrepreneurship."

                                                                        - Peter Drucker

"I'm convinced that about half of what separates the successful entrepreneurs from the non-successful ones is pure perseverance."

                                                                        - Steve Jobs

"Success or failure of a new venture is determined very early, on the strength or weakness of only a few fundamental factors, four to be exact.  Those four factors are Moxie, Market, Magic, and Mentors."

                                                                        - Jim Flowers

Entrepreneurship definitely does not equal innovation, but they sure do complement each other in powerful ways.

Here are some behaviors/traits/skills that support innovation, according to Professors Jeff Dyer of Brigham Young University and Hal Gregersen of Insead...

• Associating - a cognitive skill that supports connections across seemingly unrelated questions, problems, or ideas.
• Questioning - an inclination to ask "what if", "why", and "why not" questions that challenge the status quo and open up the bigger picture.
• Observing - the propensity to closely observe details, particularly the details of people's behavior.
• Experimenting - regularly trying on new experiences and exploring new worlds.
• Networking - connecting with smart people who have little in common with them, but from whom they can learn.

These do not match up well with the various lists of entrepreneurial traits that pop up in online investigation of the topic.  Recurring themes in definitions of an entrepreneur include...

• Clarity - true entrepreneurs absolutely "know" where they are headed.
• Focus - successful entrepreneurs stay on task - period.
• Persistence - they refuse to give up. 
• Self-confidence - they never doubt their ability to succeed.
• Courage - they take risks that most others would not take.

These entrepreneurial traits may be applied to an innovative vision, to be sure.  Apple, for example, was both innovative and entrepreneurial.  They may also be applied, on the other hand, to a perfectly common vision, such as opening a snack bar or an auto repair shop.

My simple-minded shorthand for all the entrepreneurial traits is MOXIE.  And the innovative traits relate directly to the other three Fundamental Factors: Market, Magic, and Mentors.

Ignorance is risk

"Ignorance gives one a large range of probabilities."

                      George Eliot

"Nothing is worse than active ignorance."

                                             Johann Wolfgang von Goethe

"Never let your persistence and passion turn into stubbornness and ignorance."            

                                Anthony J. D'Angelo

To be an entrepreneur is, by definition, to risk.  Risk management is all about reducing uncertainty, somehow minimizing the number of possible outcomes.  There is no greater risk, therefore, than to take aggressive action in the face of serious uncertainty.

To translate that into the terms I commonly use in this blog - don't let your Moxie override your Mastery of Market and Magic.

Here's a simple test for the level of ignorance-risk inherent in your startup plan. 

• Are you entering a Market in which you have never done business?  Yes or No.

• Is your Magic (product or service) something truly new to the world?  Yes or No.

"Yes" answers suggest that your Mastery of the Market or the Magic are probably questionable.  Two "yes" answers suggests very high risk.  One "yes" suggests more moderate risk. 

Good news!  Ignorance can be corrected, starting with location and recruitment of Mentors who have deep personal knowledge of your Market and/or your Magic.

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.

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.

Top 10 Questions for Entrepreneurs

OOPS.  Make that the Top 11.  Or is it 12?

My colleague and fellow blogger, Anne Clelland, pointed me to a great post for prospective entrepreneurs.  On Read, Write, Start, Bernard Lunn recently complied a list of the top 10 questions you should ask before starting a new venture. 

Given my experience with entrepreneurs, the ten questions were all right on target.  But one was conspicuously missing, as least from my viewpoint.  In fact, I just posted on this vital topic a few days ago.  The authors from whom Lunn selected his list apparently failed to value the simplest question of all, "Why?"  That has to be Question 11.  Or perhaps it should really be Question 1.

I am absolutely convinced that the strength of the answer to the question "Why?" is a dominant factor in entrepreneurial success.  Without a clear understanding of the expected payoffs and a powerful commitment to those payoffs, entrepreneurs simply run out of gas.  Even the biggest tanks of enthusiasm and perseverance run dry.

Here's the issue - plain and simple.  As I posted before...

In a recent post on Inc.com, Joel Spolsky recalls asking Jessica Livingston (author of Founders at Work) to speak about why start-ups fail.  "That would be boring," she told him. "They all fail for the same reason: People just stop working on their business."

Spolsky goes on.  "The more I thought about it," he says, "the more I realized Jessica was onto something. Why do start-ups fail?  As she pointed out, it's usually a collapse of motivation -- everyone wanders back to civilian life, and the start-up ends, not with a bang but a whimper."

Think about that.  "People just stop working on their businesses."

Wow.  They just plain run out of gas.  They exhaust their supplies of MOXIE.

And, as Anne regularly points out at Handshake 2.0, your network is also crucial.  "It's still who you know," she reminds us.  Or, in my words, Mentors are among the Four Fundamental Factors governing success.  So, Question 12 might well be, "Who do you know?"

The power of questioning...

"In physics, the term observer effect refers to changes that the act of observation will make on the phenomenon being observed. This is often the result of instruments that, by necessity, alter the state of what they measure in some manner."   

Wikipedia entry

For example, measurement of the properties of electric current requires attachment of some device to the circuit being studied.  The presence of the device in the circuit changes the characteristics of that circuit, which affects the properties of the current being measured.  A casual observer can see, for instance, a battery connected to a light bulb by a few wires, which may be interrupted by a switch.  But ammeters and voltmeters are necessary if one is to understand the hidden electronics of the system.

What does this have to do with a start-up business?

Buried under any observable strategy are numerous assumptions about marketplace size and expected behaviors.  These assumptions commonly vary in validity from widely observed and accepted statements of fact to casual hunches.  The number of people in a developed country, for example, is reasonably well known and reliable.  The number of them who may have a compelling need for a particular product is much more difficult to measure.

Open-minded and thorough questioning of the validity of strategic assumptions is almost certain to induce a change in the overall launch strategy.  Weakly validated assumptions are extremely dangerous.  They may be, in fact, correct.  But what if they are not?  What if their opposites are true?

Serious questioning of founder assumptions is one of the most powerful services that can be provided by Mentors - another reason why Mentors are one of the Four Fundamental Factors.  It amounts to a deliberate application of the "observer effect."  In the case of a pre-launch business plan, encouragement of change in the system through measurement of underlying properties is a really good idea. 

It is almost guaranteed to reduce risk.