Archive for category Book
Maybe you are staring at the blank screen and don’t know where to start. Or it could be when you are looking at your phone and don’t know who to call next. How about when your beta customer tells you something isn’t working and you don’t have the skills to fix it. Or maybe you see an article and you learn that someone is “in your space”.
All of these and thousands of other scenarios are examples of when an entrepreneur must look in the mirror and recommit themselves to the mission that they have committed themselves to. Just like anything the entrepreneurial journey is one with peaks and valleys. But because the entrepreneur tends to personalize everything associated with their business these peaks tend to be higher and the valleys lower and they come at you fast and furious. It can be quite a roller coaster ride.
Sometimes it hits you 3 days before your closing, when you have already committed the money to new projects and the Venture Capitalist calls you to tell you that they are pulling out of the deal. Or it could be when your distribution partner decides to end your key distribution deal. These are the times that the entrepreneur has to dig deep and decide how committed they are to their mission.
Each of the 5 C’s (Conscious, Curious, Creative, Customer Focused, and Committed) are important. However, there are examples of entrepreneurs who have been successful who lacked one or two of the first four. Maybe they created a new technology and hired someone who was customer focused. Maybe they had a vision and was able to find someone creative to figure out how to make the business model work. But to reach their goal everyone has had to be committed to their cause. They have had to overcome obstacles to achieve their vision. These obstacles may have been small ones like having a key recruit back out of a job or they may have been big ones like having a major competitor enter your arena.
It’s ironic that this has been the hardest blog post to write in 3 years. Some work stuff came up, it’s summer which means I am taking time away from the lake and I haven’t seen any other “Update” posts in a while so I wonder if anyone is out there. These things cause you to ask yourself, why should I keep going? That’s what happens to the entrepreneur. They begin to question all of their basic assumptions. Are we really building something my customers want? Do my employees believe in our mission? Is my family really supportive? These doubts are normal and exactly when the committed entrepreneur breaks through.
However, there is a fine line between committed and stupid. We all hear romantic stories about Fred Smith and how he spent his family’s money without their permission to prop up FedEx in the early days. But we don’t hear about the guy who squandered his wife’s trust fund on bad investments and a Porsche dealership. The woman who was supposed to be set for life is now 76 and working as a nurses aide.
No matter how committed you are you have to know when to throw in the towel. There are three constituencies to look at when evaluating this decision. First, are my customers (not just one group, but all of your different customer bases) supportive and willing to pay for what I am delivering? Are my investors fully informed and willing to keep supporting me? Do my employees continue to support the mission and what we are trying to accomplish? If all three of these are true then you aren’t crazy. If you lose one group for an extended period of time, maybe it’s time to throw in the towel.
Your consciousness has put this little nagging idea in the back of your head. It’s your curiosity that gets you to the point of deciding if it’s a good idea and even more importantly if it is one worth pursuing.
This curiosity comes to life thru an endless stream of questions. Each question gets you a little more information and helps you add color to your idea and to define if and how you move forward.
Basic questions like:
- How did it get this way?
- Has it always been like this?
- Why do they do it that way?
Help you gather deep background information on the industry and possible competitors.
As you begin to develop an understanding more complex questions are asked. These might include:
- How much does that cost to do?
- What are the cost drivers?
- What are people paid?
- What are the margins?
- Where does that come from?
- What skills are required?
- How do they acquire customers?
- Who are their suppliers/partners?
- Who else does this?
- Who are competitors?
These questions give your target detail and help you decide if you should continue to invest your time. Many of the answers might be guesses which will be revised later sometimes many times. Answers might also not be readily available but they help raise the entrepreneurs consciousness for things to be on the lookout for in the future.
An example of this is a company that I am working on with some of my students. The company is called “nomo” and it is an app that gives college students a place to find out everything that is happening on and around campus. This includes sporting events, club meetings and even parties. All of the content is entirely user generated and kept away from administrative control.
The idea came from one student making the comment that the “administration needs to fix the website because you can’t find out when anything is happening.” This lead to question “how do you find out what is going on?” being asked informally of many students on many campuses. As the onion was peeled back and the question why was asked it became apparent that there was a wide spread problem that cut across every campus in the US. As a follow up some quick financial questions about how much this might cost to develop and run. And who would be interested in gaining access to these students gave answers that demanded that further work be done.
There are similarities between how this curiosity guides you and the six sigma process. Many doing the six sigma process advocate using the five why’s. This informal process involves asking the question Why do you do that? Or Why is it that way? and when you get an answer you ask Why? again. Each successive time you get deeper and deeper into the problem until you are theoretically at the root cause.
As an entrepreneur it is by peeling back these layers that you develop an understanding of the strengths and vulnerabilities of a company or industry and gives you the tools and knowledge to capitalize on your idea.
Next Month: Creative
A Kauffman Sketchbook that describes the Entrepreneurial Community.
It gives a great overview of what it takes to nurture entrepreneurs and it only takes 4 minutes.
In his new book “The New Expert” by Robert Bloom, US CEO Publicis Worldwide – Retired, the author states that loyalty is dead but that there are 4 Decisive Moments that you need to focus on and plan for to grow your business. Is this true? Is loyalty dead?
With smartphones and mobility and the new ways of shopping loyalty might be severely wounded but I don’t think that it is dead.
Loyalty is given to the company that uses these same technologies to satisfy the customers wants and needs to create a competitive advantage or a barrier. If you are selling solely on price, you can’t expect loyalty. But if you have another selling proposition that loyalty is within your reach.
Think about what happened to Netflix last summer. First they raised their prices by about 30%. Customers were very unhappy but they settled down and the defections were not that bad. Then, about 4 weeks later they announced that they were going to split into two companies – Netflix for streaming and Flixster for via the mail. This is what caused customers to abandon the service en mass. Customers walked because they didn’t want to have to manage two sets of data. Part of the value that Netflix provided to them was to manage their queue and their history and even to provide ratings. If the customer now had to manage that on their own through two different sites it was no longer worth it to them. So they dropped the service.
Luckily for Netflix they realized the mistake they made and decided not to split into two companies (although prices still went up) and customers have now come back.
Loyalty isn’t dead, but how are you competing on something other than price to earn it?