Life is complicated. People like and need to simplify their lives by allowing symbols and metaphors to heavily impact their impressions of the world that surrounds them. Use this tendency to your advantage. Realize that brands are powerful – they are a surrogate for all sorts of due diligence that would otherwise need to be performed in an effort to ascertain credibility of a particular person, company, or offering. Build your brand. Make sure it is memorable and stands for what you want your company to be known for. Do everything in your power to protect your reputation and that of your brand. Leverage the credibility of symbols that are meaningful to your target market. As mentioned previously in the lesson regarding advertising, it takes a great deal of repetition and reinforcement, on an ongoing basis, to solidify your message in the minds of your target market. Never forego an opportunity to reinforce what you, your company, your brand, and your logo stand for.
This is a fundamental rule in consulting and in fact, in any business – be certain to set expectations correctly, so that you can over-deliver, always. If you promise the moon and don’t deliver it, at a minimum, you will have an unhappy customer; at worse, you will have litigation and a very unpleasant, costly situation. That is not to say that you should constantly promise so little that you can’t help but exceed your promise – that will impress no one. It is to say however, that you should be very careful in setting the expectations of your clients and customers. Perhaps more important, you must stay in touch very regularly during the course of the project / ongoing relationship, and make sure that you have your finger on the pulse of progress and the mood of your client. If you do not, you will receive that call that no entrepreneur wants to receive – that of a disgruntled customer. If you do receive that call, especially if it’s from a critical customer, you must do everything in your power to rectify the situation. As you know, new client acquisition is typically the most difficult and costly aspect of most businesses. Don’t commit the cardinal sin of losing a client due to over-promising and under-delivering, or perhaps worse yet, not paying attention to the changing needs of your customers.
This is a funny one, but one that you should bear in mind. We tend to like our own ideas – if they’re our ideas, then they must be right, right? But don’t kid yourself – make sure you have plenty of objective advisors who will challenge your ideas. As mentioned above, this one is highly related to the “don’t business plan in a vacuum” rule. The key takeaway for this rule is, since it will be very difficult to “keep yourself honest” as you plan and work to build your business, make sure you surround yourself with partners, employees and other players who will not be shy about challenging you and your ideas. You don’t want to allow yourself to be lulled into thinking that you have all the answers, and this can easily happen, especially if you begin to encounter some level of success. This one can kill your company, if you get lulled into believing all of your own ideas. Don’t drink your own bath water.
The fact of the matter is that many small businesses should not be started in the first place. They suffer from a weak business model, an excessively competitive market landscape, soon to be obsolete technology, or a host of other potentially fatal flaws. Sometimes, worse yet, they are not fatally flawed, but they are only compelling enough to break even or sustain a small loss, systematically draining the owners and managers of time and resources, but never producing any real wealth. Venture capitalists refer to these as the “walking dead” – in fact, for a venture capitalist, a walking dead company could even be marginally profitable, but difficult to exit due to lack of upside potential or strategic relevance for a potential acquirer. I don’t include this lesson to discourage you, rather it is here to remind you that not all businesses are exceptionally successful; in fact, many never even reach profitability. You should still believe in your dreams and persevere, but if you are sitting on a dog or thinking about starting one up, at some point you need to stop kidding yourself and apply your considerable energy, talent and other resources to an endeavor that has the upside potential that warrants such exertion and risk. Be honest with yourself when you make this assessment. Your future wealth and happiness are tied to how honest you are with yourself on this topic.
I continue to see it on an ongoing basis. You meet someone who seems like they’d be a great partner or employee. You have lunch with them. You interview them. You call their references. Everything checks out. They seem intelligent, engaging and capable. Then you take it to the next step – you begin negotiating with them or you work with them on a complex and stressful project, and you quickly realize that they are not as connected with reality as you initially thought. In fact, you begin to think that they are self-delusive, or just plain crazy in one or many ways. But then again, you’re not so sure … they appeared so grounded and sane in your initial interactions. You begin to wonder whether you’ve lost touch with reality. So you describe the situation or interaction to people you trust, both your friends and other disinterested parties to make sure you are getting an objective opinion. When all or most of the opinions you respect come back the same, you realize that you are correct – the person you’re dealing with is nuts. When this happens, don’t waste any time; figure out the most practical and expeditious way to distance yourself from this person, permanently. Trust me on this one, if you don’t, you will waste all kinds of time, money and other resources in dealing with this person. Don’t do it. Just get rid of them as quickly and decisively as possible.
Not to get overly-philosophical on you here, but in the end, how important is each one of us in the scheme of the universe? The reality is that our own personal world is extremely important to us, as it is what we spend most of our time focusing on. But when you get into tough situations in your small business, try to keep things in perspective; it will make it a lot easier for you to keep your blood pressure down and make better decisions. Many if not most entrepreneurs are perfectionists, so this only feeds the tendency to take things too seriously. You should always be prepared of course, but bear in mind that if something small (or even large) does not go exactly as planned, the world is not likely to come to an end. Don’t use this perspective as an excuse; rather use it as a way to keep your sanity in the crazy world of entrepreneurship.
It never ceases to amaze me that some people think you have to be cutthroat and treat people badly to be successful financially in business. Nothing could be further from the truth. In fact, in my experience and observation, entrepreneurs that treat people well end up better off typically. And at the very least, they sleep well at night and don’t have to feel lousy about the way they are conducting their lives. This is not to say that you should be a pushover, but it is to say that you should treat people fairly, reward them for a job well done, and remember that “what goes around, comes around”. That being said, if someone tries to take advantage of you or does something that is totally wrong toward you, your company, or your employees, then you should not think twice about protecting your interests. Business can be tough from time to time, just don’t treat people badly for sport – it is likely to come back and bite you.
I can’t tell you how many exceptionally bright people I’ve worked with, partnered with, hired and fired, who although they had remarkable native intelligence, couldn’t “play well with others”. I’m sure you’ve experienced it yourself – beyond a certain level of intelligence, there seems to be a negative correlation between smarts and the ability to work well and communicate with others. Similar to the “Don’t Hire Prima Donnas” rule, this rule is meant to encourage you to take a close look at people’s attitudes and “emotional intelligence”. In the end, you will be much better off focusing on this issue rather than “smarts”, assuming you can count on a certain level of intelligence in your candidates. Testing for the ability to play well with others is a bit more difficult before people are on board, but again, the best way to go about it is to put them in scenarios (particularly stressful ones) they are likely to encounter in your company/industry. All the better if you can introduce team issues into the pre-hiring scenarios as well. Don’t be overly impressed by IQ – in the end it is not nearly as important a factor as the ability (and desire) to handle and make the most of people issues.
There are a lot of people out there that have great stories to tell, look very good on paper, and may even have a few references (friends) who will say great things about them, but when you dig not too far below the surface, you may find out that they are completely useless. I know this one sounds overly negative, but I have experienced it too many times to not want to point it out to you. It has never ceased to amaze me how someone can have a stellar resume and appear to have many outstanding accomplishments, then be unable to perform relatively basic functions in a business. I don’t have to point out to you that we are dealing with the highly idiosyncratic human race, so it’s no surprise that there are surprises. The key point is that great achievement in one company, in one area, or even in one era doesn’t necessarily translate to the task at hand today. The main lesson to take away is that until you’ve known someone a long time (like several years) and had the opportunity to see them operate in situations similar to those you are asking them to manage, do not entrust them with too much of your empire – you may be dealing with a poser that could cause you and your business serious harm.
The liability of newness/smallness are terms my early mentor Mac (Ian MacMillan) uses, which I think very well describe the challenge that most startup and small companies face: they lack a track record of accomplishment and an infrastructure that will give prospective buyers a comfortable feeling when they are considering doing business with them. Buyers, especially those from larger companies, tend to be highly risk-averse in their buying decisions. They realize that if they go with a new and/or small company and for whatever reason that company cannot deliver, their job and reputation are on the line. You need to overcome this liability by partnering with larger firms, and by making certain that your communications (web, phone, written, etc.) are 100% professional and credible. With technology as it is today, it’s easy to appear larger than you are, until such time as you can become truly large and credible. Money, time and effort you spend here will be very well rewarded; if you cannot get past the credibility gap, you cannot “pass go” and your business will go nowhere.