Jul 112017
 
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Being An Entrepreneur Is The Only Way To Control Your Destiny

One of the perks of being an entrepreneur is that you control your own destiny.

Well, sort of.

In reality, regardless of what you do to make a living, there will be factors beyond your control. Those factors may, of course, have an impact on your destiny.

When compared with other ways to make a living, though, it’s hard to find options that give you as much control as being an entrepreneur.

If, for example, you work for someone else, your destiny is largely in that person’s or that organization’s hands. The reality is that tomorrow, or even a minute from now, your employer could notify you that your services are no longer needed.

Your employer may tell you this because you’re not doing a good job, over which you do have a large degree of control, of course.

However, they may also tell you that your services are no longer needed due to all sorts of other factors.

For example, your job may be “offshored” or outsourced to some other place in the world. Or, due to no fault of your own, and perhaps even due to no fault of your employer, the company’s sales may be declining and the company may no longer be able to afford to have you on the payroll.

So, how is being an entrepreneur different in terms of controlling your own destiny?

Well, in some ways it’s very different, and in other ways, it’s similar to working for someone else.

Let’s look at the differences and similarities.

When you are an entrepreneur (i.e. self-employed, as a simplified definition in this article — I realize there are varying views on the definition of “entrepreneur”), you’ll see the following “control” differences and similarities, compared to working for someone else:

  • You control your schedule. Your employer doesn’t control your schedule, at least, as you do not have an employer other than yourself. That said, you do have all sorts of constituencies that will have an impact on your schedule, including customers, investors, partners, employees, service providers, etc. So, in a nutshell, you’ve traded your employer for a series of other “bosses”.
  • You control how much you make. In reality, how well your company does controls how much you make. So, you can’t just say I want to be paid a million dollars per year and the money shows up on your doorstep. You have to be strategic and you have to be willing to work hard, but the good news is that if you work hard enough for a million dollars to come in, you’ll likely be keeping a lot more of it (with controlled expenses) than you would have if you were on someone else’s payroll.
  • You control how hard you work. Well, to be clear, you largely control how hard you work if you’re working for someone else, too. Once you become accustomed to being an entrepreneur, though, you realize that you don’t mind putting in long hours when it’s for your bottom line and not for someone else’s.
  • You control your stress level. Again, regardless of whether you’re an entrepreneur or an employee, you are in charge of controlling your stress level. As an entrepreneur, you may have a bit more flexibility in structuring your schedule and your activities, so that you’re better able to manage your stress level. However, in many cases, since you’re the “chief cook and bottle washer” (i.e. the buck stops with your for everything), often your stress level will actually go up relative to what it was as an employee.  As with hard work, though, you’ll likely not mind more stress so much when it’s for your business, rather than for your employer’s business.
  • You control whom you work with. This may be one of the biggest perks of being an entrepreneur, especially when you reach a level of success that gives you some flexibility. You have the last say on who works at your company, the customers you do business with, the service providers you use, etc. This is very liberating! It gives you the opportunity to only work with and help people that you like. This isn’t true for all businesses, of course – if you have a retail business dealing with the public, for example, you may not like every customer that walks through the door. If you own a service business, on the other hand, you typically can “fire” (or never “hire”) clients who you don’t want to help, for most any reason.
  • You control what happens when you retire. This assumes, of course, that you’ve built a business that can survive without your presence. If you haven’t, then the business will close when you decide you’re done. If you have, then you’ll be able to retire knowing that your business will continue to serve others, in the hands of the subsequent owners. It’s satisfying to know that you’ve built a business that not only provided for you and your family, but also that will continue to serve customers into the future, and may even continue to support your family, depending who the subsequent owners are and how the deal is structured when you sell your business.
  • You control whether you get fired. Bringing the story back to the beginning of this article, where we talked about the fact that your employer can fire you at any time, being an entrepreneur is no panacea in this regard. Subject to the terms of your agreement, clients can also “fire” you at any time. That said, for your sake, I hope that you will not have just one client or just one customer! If you build a diversified set of customer and clients, then if just one fires you, your business is not done. The same cannot be said for the situation where your (one) employer fires you – in that case, your “business” is done and you must find another job.

This list could go on, but you get the idea: As an entrepreneur, you have more control over your destiny.

That does not mean that things get easier than when you’re an employee, but it does mean that you are in charge – and you get all the good and bad things that come with being the head honcho. The sky is the limit, but the downside is yours as well. If that works for you, then being an entrepreneur is absolutely the way to go!

 

Paul Morin

paul@companyfounder.com

www.companyfounder.com

 

 

 

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Dec 172012
 
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entrepreneurship

Entrepreneurship Never Promised You A Rose Garden

It always surprises me when people tell me that entrepreneurship is tougher than they thought it would be!

In some ways I guess it’s not too surprising.  In the media, we hear a lot about extraordinarily successful entrepreneurs like Richard Branson.  We hear how they’ve made billions of dollars and we get a glimpse into the lives of luxury they’ve earned through their entrepreneurial toils.

What we don’t see as much in the media are the stories about the countless times such entrepreneurs have been knocked down and gotten back up.  Thus, the image we see in the media glorifies entrepreneurship and skews our perspective on what it takes to become successful as an entrepreneur.  That media image tends to underemphasize the importance of persistence in the stories of every successful entrepreneur.

So if entrepreneurship is not a “rose garden” but rather a constant and never ending challenge, why do we do it?  Answer this question honestly in your own case.  If you’re an entrepreneur, why have you signed up for a lifestyle that gets glorified, when in fact, for most entrepreneurs, it presents challenges beyond what they likely ever would have seen in a 9-5 job?

In my case, I’ve signed up to be an entrepreneur for a variety of reasons.  Here are a few that come immediately to mind:

1.)     I’ve been an entrepreneur since I was a young kid.  I’ve never seen myself as anything else.

2.)     I feel more comfortable as an entrepreneur than I do as an employee.

3.)     I’ve never bought into the notion of “job security”.  There may have been a time when you could expect to reach “gold watch” (upon retirement) years at one company, but those days are long gone.

4.)     I like the idea that my success or failure is driven in great part by the thought and effort I put into my endeavors.  Notice I didn’t say that it’s driven exclusively by my efforts, as I’m aware that in order to succeed as an entrepreneur, you need the help of a lot of people.

5.)     I like to work hard (and smart) and it gives me more satisfaction to know that the extraordinary effort I invest in my ventures will benefit me directly, rather than indirectly.

6.)     I’ve always felt like entrepreneurs are “my people”.  I admire and respect those who are willing to come up with an idea, launch it, and drive it toward success, even if the journey is not direct and there’s always some course correction necessary along the way.  I’ve always wanted to be one of those people.

7.)     I believe that without entrepreneurship our world would be a much less interesting place.  Think of one product or service you love and “can’t live without”.  A company that was started by an entrepreneur or a team of entrepreneurs provides that product or service.

8.)     I’ve always believed in free market economics.  There is no more effective force than competition to bring the highest and best products and services to the market, at a price the market is willing to pay.  The entrepreneur has to navigate that complex landscape.  That’s a great challenge and one that I enjoy.

9.)     As an entrepreneur, especially as one who has achieved some success, you have a tremendous opportunity to contribute to society and have a positive impact on a large number of people.

10.)   Life as an entrepreneur is hardly ever boring.  This is especially true if you are competing in a dynamic market, where the competition is constantly adapting to new customer demands.  Such an environment tends to bring a great deal of challenge and potential reward (financial and beyond), both of which appeal to me greatly.

If anyone ever promised you a rose garden as an entrepreneur, I hope you didn’t believe them.  But if you did, by now you’ve undoubtedly realized that their promise was unrealistic.  Hopefully you’ve also found that, despite the many challenges entrepreneurship brings, or perhaps because of them, being an entrepreneur is a great way to make a living and a meaningful contribution to society.  If not, I hope you are able to hang in there until you find a venture that brings you the satisfaction that entrepreneurship has brought me in my career.

I look forward to your thoughts!  Please leave a comment (“response”) below or in the upper right corner of this post.

Paul Morin

paul@companyfounder.com

www.companyfounder.com

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Sep 292011
 
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entrepreneurship - science or art?

Is Entrepreneurship Art Or Science?

I have heard and participated in this debate for as long I’ve been involved in entrepreneurship.  I have friends and colleagues who will argue until they’re “blue in the face” that entrepreneurship is either art or science.  In an effort to answer this question, if you observe entrepreneurs and particularly those who have been successful, you quickly realize that there is no “right” answer.  Sometimes entrepreneurship looks more like art, sometimes more like science, and sometimes, it looks like an equal mix of the two.

Before going further, let’s define “art” and “science,” so that we’re all on the same page.  In the online Merriam-Webster dictionary (www.merriam-webster.com), there are several definitions of both “art” and “science”.  I have chosen one definition for each – see below – so we can look at them more closely in the context of entrepreneurship.  Note:  I also included the definition of “scientific method” to make the “science” definition clearer.

Art:  The conscious use of skill and creative imagination especially in the production of aesthetic objects.

Science:  Knowledge or a system of knowledge covering general truths or the operation of general laws especially as obtained and tested through scientific method.

Scientific Method:  Principles and procedures for the systematic pursuit of knowledge involving the recognition and formulation of a problem, the collection of data through observation and experiment, and the formulation and testing of hypotheses.

So which of these sounds more like entrepreneurship to you?  If you’re more of an engineer or “scientific type,” you’ll probably lean toward science and the scientific method.  If you’re more of an artist (or “poet”), you’ll probably lean more toward the art definition.  One talks more about imagination and creativity, the other more about data and “hypothesis testing”.

In reality though, regardless of which side of the spectrum you gravitate toward, if you’ve had much experience with entrepreneurship, you’ll realize that most businesses are part art and part science.  How much of each is involved typically has a lot to do with the type of business and the particular entrepreneur or entrepreneurial team involved.  It also is often correlated with the stage of the venture.

In early stage ventures, there often is not a lot of “hard data” available, thus there tends to be a lot more “art” and intuition needed to keep the business moving forward in a positive manner.  This reality brings us back to the saying that venture capitalists and other early stage “risk capital” investors would almost always rather put their money into “an A team with a B idea” than “a B team with an A idea”.  Why is that?  Because at the early stage of any venture, there’s not much certainty about the correct direction to take and a more intuitive or “artful” management team is needed to navigate through dangerous waters.

This is not to say that those “intuitive” and “artful” entrepreneurs will not be using the “scientific method,” nor is it saying that they’re lacking strong left-brain, analytical capabilities.  To the contrary, such “A team” entrepreneurs and managers often have very strong analytical capabilities, and moreover, they usually have a track record of experiences that allow them to naturally mix art and science, frequently without even realizing it.  Such “A” entrepreneurs have usually been through several early stage ventures and have seen the good and bad results of both “artistic” and scientific approaches to various early stage venture issues and scenarios.  The good ones are then able to rely on pattern recognition and apply their previous experience through an “intuitive filter” and lead the venture through challenges and opportunities.

One of my colleagues at Wharton Entrepreneurial Programs used to call it moving from the intuitive to the intentional.  I’m not sure it’s necessarily a “progression” from intuitive to intentional; rather, I think it’s a progression from intuitive (art) or intentional (science), to intuitive and intentional.  No matter how scientific or proactive an entrepreneur would like to become in growing and leading their venture, and no matter in which business lifecycle phase they may find themselves, situations frequently arise where there is no certainty regarding the “correct” answer and intuition must play a key role.

So, in the end, entrepreneurship will always be part art and part science.  What changes, based on the entrepreneur or entrepreneurial team, the particular venture, the lifecycle stage, and so on, is the required balance between art and science.  Make sure that in your entrepreneurial life and ventures, if you tend to be too heavily weighted toward the artistic or the scientific, you find a way to arrive at a balance that makes sense.  Depending where you are on the spectrum, this may involve bringing in more “professional managers,” who by definition are usually more scientific in their approach, or it may involve bringing in more creative and intuitive types.  Of course, there will never be a perfect balance, but some businesses and management teams are so heavily weighted toward one end of the spectrum, that they are exposing themselves to the risk of being “blindsided,” for lack of orientation and competence toward the other end of the spectrum.  Find a balance; don’t allow yourself or your business to be blindsided.

I look forward to your thoughts and questions.  Please leave a comment (“response”) below or in the upper right corner of this post.

Paul Morin

paul@companyfounder.com

www.companyfounder.com

 

Don’t miss an issue of Company Founder! Subscribe today.  It’s free.  It’s private.  It’s practical information for entrepreneurs and leaders interested in taking it to the next level.

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Sep 182011
 
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Can entrepreneurship be taught?

Can Entrepreneurship Be Taught?

A question I get quite frequently is, “Can entrepreneurship be taught”?  It’s a tough question and the answer is highly dependent on how you define “entrepreneurship,” so let’s start there.  If you look in Webster’s dictionary online (http://www.merriam-webster.com), there is no separate definition for entrepreneurship, but here’s the definition you find for entrepreneur:

One who organizes, manages, and assumes the risks of a business or enterprise.

Frankly, I find that definition a bit lacking, as it’s very dry and does not embody any of the spirit or mindset it takes to be an entrepreneur.

If you take a look at first the definition of entrepreneur on thefreedictionary.com it’s similarly unexciting and dry, but a bit further down there is another definition that is more in line with the way I think about entrepreneurship.  That definition is:

The owner or manager of a business enterprise who, by risk and initiative, attempts to make profits.

This one appeals to me a bit more, because entrepreneurship is all about taking initiative, and the motivation for taking that initiative and assuming the related risks, is usually to make profits.

We could wordsmith the definitions of entrepreneur and entrepreneurship all day long, but the definition above should be sufficient to allow us to think more about the question at hand: Can entrepreneurship be taught?

The short preview of my opinion is that I believe certain aspects of running a business can be taught very well; however, the “entrepreneurial mindset” is difficult to teach and correspondingly tough to learn, but for the most part, it is possible.  In order to look at this aspect of the mindset a bit further, let’s review my list of the 5 Key Character Traits To Be Successful As An Entrepreneur.  Though I acknowledge that this is not an exhaustive list, in my opinion, the five key traits are as follows:

1.)  Perseverance

Having been in the entrepreneurship game for more than 30 years now, I have learned that, without a doubt, if you don’t have perseverance, you are highly unlikely to achieve any meaningful level of success as an entrepreneur.  Although you may plan and do your best to predict the future, I haven’t met anyone who can do that with 100% accuracy.  Therefore, there are going to be unforeseen challenges and you will need to persevere in order to overcome them.  The good news is that, like many of the key characteristics of successful entrepreneurs, this one can be learned — you don’t need to be born with it.

2.)  Goal Setting

I’m not sure this is one that I would always have included on this list, but over time, I have learned that the ability to set goals correctly, monitor progress toward those goals, adjust course as necessary, and make sure they are completed regardless of the obstacles you encounter, is critical to the success of most entrepreneurs.  The alternative is to not set goals, but where does that leave you?  As the saying goes, if you don’t know where you’re going, you’ll probably end up somewhere else.  Setting goals and keeping them on your radar on a regular basis can also help to keep you motivated and on track when times are tough.

3.)  Tolerate Uncertainty

One thing most successful entrepreneurs I know do very well is to tolerate uncertainty.  They are comfortable and very often stimulated in situations of uncertainty.  Unlike many other traits, this is one that may be difficult (but still possible) to learn — to some extent, you’re either born with it, or you’re not.  Those of you who have sought certainty and predictability in your careers and elsewhere in your lives may find it very challenging to be in the relatively chaotic world of entrepreneurship, particularly at the early stage of a venture.  In your case, you would be wise to associate yourself with others you know who perhaps have more of a tolerance for those situations, so you can lean on them a bit when the inevitable chaos and uncertainty arrive.  You may also want to take a role in the venture that allows you to deal with some of the tasks that are a bit more routine and predictable.

4.)  A Strong Desire to Succeed

Most of the great entrepreneurs I know have an extremely strong desire to be successful in everything they do.  They are usually quite competitive, sometimes to an annoying degree and sometimes regarding tasks that, at least on the surface, don’t seem very important.  This drive to succeed is what pushes them to be the pioneer, to take the proverbial arrows, while others are content to sit back and fall into a routine.  If you don’t have such a strong desire to succeed, this may be another one that is a bit difficult to learn — but I do think it’s possible.

5.)  Different Definition of Failure

Hardly any entrepreneurs in the history of time have achieved great success without a failure, usually many, many of them.  Sure, a few have done it, but some people have hit the lottery as well.  It happens, but it’s highly unusual.  Much more common among successful entrepreneurs, are stories of repeated failure — sometimes 10, 20 or more failures — then what appears to be a sudden success that came out of nowhere.  The reality is that it did not come out of nowhere; it came from the ability to learn and course-adjust, based on previous approaches that did not work.  As with achievement in most disciplines, mindset is everything as an entrepreneur.  This is best illustrated by a comment made by Thomas Edison, when someone asked him if he had failed on a particular experiment.  His response was to the effect, “no, I just eliminated another way that does not work.”

So, let’s take a look at each of these traits in a bit more depth at it relates to “teachability”.  In the case of perseverance, perhaps the most important trait, let’s say it can be learned but cannot be taught.  A coach or other third party may be able to help you push your way through difficult situations (i.e. persevere), but the drive to do so must come from inside.  Another person can teach you how to set goals correctly.  They can also teach you and encourage you to monitor your progress toward those goals and to course-correct along the way.  A third part cannot teach you to have a personality or mindset that tolerates uncertainty well, at least not easily.  Your risk and uncertainty tolerance is something you’ve developed over a lifetime, so it’s not easy to change.  It’s possible, but only with concerted effort and incremental progress, mainly on your part.  A coach or mentor can encourage you in this process, but the desire to change will need to come from within.  If you are to develop a strong desire to succeed, that too will have to come from within.  Again, outside parties can encourage you, however, the desire will have to come from you, and it will likely be based on how important your goals are to you.  You need to set goals that really get you “fired up”.  You can redefine your definition of failure and this is something that can be taught.  It may take some time, but it is vital to your success as an entrepreneur.  If you are going to look at every small bump in the road as a failure and allow it to cause you to get off track, rather than learning from it and moving on, entrepreneurship is going to be a very tough road for you.

In summary, in my opinion, many aspects of entrepreneurship, include some parts of the “entrepreneurial mindset” can be taught and learned.  For all aspects though, the desire to learn and continue becoming a better and more successful entrepreneur will need to come from within.  You will need the drive to succeed that leads to the willpower to overcome obstacles and “make it happen”.  If you don’t have, or can’t muster this drive and willpower, no amount of teaching or learning is likely to allow you to become a successful entrepreneur.

I look forward to your thoughts and questions.  Please leave a comment (“response”) below or in the upper right corner of this post.

Paul Morin

paul@companyfounder.com

www.companyfounder.com

 

Don’t miss an issue of Company Founder! Subscribe today.  It’s free.  It’s private.  It’s practical information for entrepreneurs and leaders interested in taking it to the next level.

Go to the right-hand navigation bar near the top of the page, enter your email and click subscribe.  We respect your privacy and will not sell your email address.  Note:  once you subscribe, if the confirmation email doesn’t arrive, check your spam filter.  It usually makes it through, but we’ve had a few get caught up in the filter.

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Sep 172011
 
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Struggling small business? Don't give up!

Struggling In Your Small Business? Don’t Give Up!

If you are struggling in your small business, take heart; you are not alone and you should not give up.  The potential reasons for your struggles, some of which we’ll discuss below, most likely have both a “macro” and “micro” foundation.  As long as you’re willing to be honest with yourself, there’s a good chance you can course-adjust and get your business back on track.  If not, you should at least be able to make a rational decision of “where to go from here”.

The first step in determining what you should do if your business is struggling is to assess whether you have a “good business” to begin with!  Whether you’re running a business that’s been around for seventy-five years or one that’s been around for a month, it’s important to take an honest look at what you have.  It’s sad to say, but some businesses shouldn’t have been started in the first place, and some businesses that were great at the beginning, have been passed by due to “human progress” (“buggy whips” come to mind) or poor management, or both.

Let’s focus on the case of a relatively mature small business that has run into hard times.  If instead you are looking more for a discussion of the characteristics you’ll want to consider in screening a startup, see Startup Basics – The Difference Between Ideas and Opportunities.

First, I want to make the point that I’m a huge fan of the entrepreneur (and any kind of achiever) who has the “never-say-die” mentality.  I applaud it.  I try to emulate it as much as possible.  I believe it is what leads to more progress in our world than almost any other single trait.  All that said, it’s important to be “realistic” too.  I am not saying to lose your never-say-die attitude.  Rather, I am saying assess the situation rationally, do what needs to be done, then channel your enormous willpower and energy in a direction that’s not tantamount to “rearranging deck chairs on the titanic”.

What are the questions you should ask yourself to determine whether your small business has “hit an iceberg” and become the equivalent of the Titanic?  Here are a few thoughts.  This is not an exhaustive list, but it should get your mind moving in the right direction.

Struggling Small Business Honest Self-Assessment Question #1

Has the industry taken a completely new direction, in which we are not prepared or equipped to go?

Take as an example the corner video rental store a few years ago.  Everyone could see the writing on the wall regarding the stiff competition from pay-per-view cable and Netflix, among other movie sources.  If you had owned a chain of video rental stores at that point, what would you have done?

Struggling Small Business Honest Self-Assessment Question #2

Have our margins been squeezed to the point that it’s impossible to make money on the bottom line?

In many industries, there is a tendency toward “commoditization,” which has very negative effects on gross margins, due to severe competition on price, without a commensurate reduction in costs of production.  A good example here would be most segments of the computer hardware manufacturing business.  The prices have come down far faster than the costs of production.  It’s now to the point where you need to be a very large player, doing a huge amount of volume, to have any hopes of making money in that business.  This is where commoditized industries end up.

Struggling Small Business Honest Self-Assessment Question #3

Do we have the right leadership team in place to grow our business?

I have seen this issue in non-family and family businesses alike, but it seems to be more prevalent in family owned companies.  What happens quite frequently is that someone has been with the company a long time, so they’re awarded a senior position, without any real assessment of whether they are the person who will be able to handle those responsibilities as the company grows.  It happens in sales, in marketing, in finance, in operations, even at the CEO and Board level.  The business simply outgrows some people.  It’s inevitable and it’s a difficult situation, but it must be dealt with, or the entire business is put in danger.  It is better to deal with the uncomfortable situation of having to demote or fire someone who cannot “make it happen” than it is to ignore the problem and bring the whole company down in the process.  I understand and fully agree with rewarding loyalty, but not to the detriment of the company, all its other employees, its shareholders, and other constituencies.  If your company and/or industry has outgrown you or other key members of your senior management team, acknowledge it and fix it as soon as possible.

Struggling Small Business Honest Self-Assessment Question #4

Should we be looking at a different part of the “value chain”?

Quite a few years back, I read a book by a couple of BCG (Boston Consulting Group) guys called Blown To Bits.  I don’t recall the exact terminology they used, but one important concept from the book has stuck with me.  They talked about how mature players will have to constantly defend attacks from insurgents who want to come in and “cherry pick” the most profitable pieces of the value chain.  Where are you in the “value chain” that brings value to your customers and solves their problem(s)?  Industries that have many layers of intermediaries en route from production to putting the products in the hands of consumers, these days are frequently seeing entire layers cut out of the chain.  This happens due to the ability of the manufacturer to go directly to the consumer.  Don’t become “disintermediated” (a term used in Blown to Bits, if I recall correctly)!  If you are in one of the layers that is not adding much value, you are in great danger of being cut out.  An example here would be auto insurance.  Geico simply cuts the broker out of the picture.  For other types of insurance, particularly complex business insurance, that’s not quite as easy to do.  Take a close look at your own situation.  Examine the “value chain” all the way from production to the consumer’s hands.  Where is the value being added?  Where is the money being made?  Where are you?

Struggling Small Business Honest Self-Assessment Question #5

If you conclude the future isn’t bright, you’ll need to answer the question: What should we do then?

If you ask yourself some of these questions and don’t like the answers you’re hearing, you will need to decide what to do.  There are typically several choices, including:  close the business, downsize the business, sell the business, change the market focus, upgrade the manufacturing capabilities, upgrade the senior management, etc.  In other words, there are a lot of possibilities and many of them are not mutually exclusive.  For example, upgrading the senior management and changing the market focus or overall strategic direction, would often be logical complements.  The key is that you must do something.  The worst thing you can do is nothing and just continue along a path that you know does not end well.  The other key is to be honest in your assessment.  If your business is struggling, there are reasons for it. It doesn’t just happen.  Most likely some of those reasons are related to macroeconomic issues and others are related to micro issues within the business itself.  In any case, you must take action to address the issues that you have control over.  For the remainder, you will need to do your best to be proactive and navigate around the “storms” in your immediate vicinity and those you see on the horizon.

I look forward to your thoughts and questions.

Paul Morin

paul@companyfounder.com

www.companyfounder.com

 

Don’t miss an issue of Company Founder! Subscribe today.  It’s free.  It’s private.  It’s practical information for entrepreneurs and leaders interested in taking it to the next level.

Go to the right-hand navigation bar near the top of the page, enter your email and click subscribe.  We respect your privacy and will not sell your email address.  Note:  once you subscribe, if the confirmation email doesn’t arrive, check your spam filter.  It usually makes it through, but we’ve had a few get caught up in the filter..

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Aug 242011
 
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Are Entrepreneurs Gamblers?

I often get asked the question, “Are entrepreneurs gamblers”?  I think how you answer this question has everything to do with how you define “entrepreneur” and how you define “gambler,” so let’s start there.

For me, an entrepreneur is someone who starts a business with the intention of growing it, in order to make a profit.  Further, an entrepreneur takes pleasure in creating something that previously didn’t exist and growing it into something that “matters”.  Clearly, it is possible to be “entrepreneurial” in non-profit organizations and in for-profit organizations that already existed before you showed up – there are various types of entrepreneurship.  The simplest definition of an entrepreneur is “someone who looks for business opportunities and invests time, money and/or other resources to take advantage of those opportunities”.  You most often hear the word “entrepreneur” used in the case of startup businesses, but that is not the only scenario where the term is applicable.

Now, a “gambler,” for me, is someone who places bets, hoping to win by chance, usually against the odds.  There are various types of gambling, not all of which happen in a casino, but even within a casino, there are many different forms of gambling.  If we look at a casino as the place we most often find “true gamblers,” we quickly realize that, usually at least, when they’re playing against the house (the casino), in such games as blackjack, craps, roulette, etc, they have to get quite lucky to win on any particular occasion.  Further, if instead we look not at a specific occasion, but over a period of time and several occasions, unless they are cheating or exploiting some other advantage that is against casino rules, their probability of winning is almost zero.  The games were created that way, by the casinos.  No wonder the odds are stacked in favor of the house.

Ok, so back to the question:  Are entrepreneurs gamblers?  Based on the definitions I laid out above, I think you’d have to say, no, entrepreneurs are not gamblers.  Entrepreneurs may count on luck just as gamblers do, but I don’t think we can say that over time entrepreneurs’ probability of succeeding is almost zero, as it is for gamblers as defined above.

So if entrepreneurs are not gamblers, what are they?  They are risk takers.  To be more specific, good entrepreneurs are calculated risk takers.  They see an opportunity and like gamblers, they place a bet.  They bet their capital, their time, and other resources that they will be able to exploit the identified opportunity and create a successful business based on it.  They do depend on luck to some extent, but if they are experienced and/or have good partners and advisors, they know how to “stack the deck” in their favor, so that they don’t have to depend on luck so much.  I guess if you wanted to compare them to gamblers, you could compare them to those gamblers I mentioned above who use “card counting” or other techniques that go against the house rules.  They do not enter the game, or in the case of entrepreneurs, the venture, without some advantage or set of advantages that they, and their investors if they have any, believe will allow them to succeed in that particular business.

Frankly, I don’t really like hearing entrepreneurs compared to gamblers, at least not given the definitions I provided above.  I don’t think such a comparison does the entrepreneur, at least not the “good” entrepreneur, justice, as it has too many connotations of “shooting from the hip” and just hoping to get lucky.

As one of my close entrepreneur friends says, “without risk, there is no reward”.  It is inevitable that anyone who dares to initiate anything, including a new business venture, is taking a risk.  They are “risk-takers,” by definition.  They’re not “gamblers” though, at least not per my definition of the word.

If you are just starting on the entrepreneurial path, or even if you’ve been on it for a while, make sure you’re a “good” entrepreneur – a calculated risk taker, not a gambler.

P.S. You may have seen me compare entrepreneurship to a poker tournament elsewhere.  This is because poker is not a game you play against the house.  It is played against other players.  It is still a form of gambling, but not the type of gambling I referenced above.  While it absolutely does involve some luck, it also involves strategy and allows you to be more of a “calculated risk taker” than games against the house.

I look forward to your thoughts and comments.  Please leave a comment below or in the top right corner of this post.

Paul Morin

paul@companyfounder.com

www.companyfounder.com.

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Jun 232011
 
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Don’t Fear Making Mistakes

Don’t fear making mistakes; fear not making enough of them. Let’s consider two scenarios: 1.) The person who hardly ever makes mistakes; 2.) The person who makes A LOT of mistakes, but is careful to learn from them each time. Who do you think will accomplish more in their chosen endeavor (and in life in general)?

In my experience, chances are very high that the person who is willing to make mistakes, but also very careful to learn from each one, is likely to accomplish significantly more than the person who is not willing to make mistakes. Let’s look at a simple scenario to understand why this is so.

Let’s say you are an entrepreneur and you are launching a new product. As a good entrepreneur, you have developed the product because you saw an unmet need in the market and validated your perception by talking to potential buyers and even receiving substantial orders in advance of the release. In fact, the pre-launch orders were so substantial that you decide, for the time-being at least, not to seek other channels of distribution or pursue other potential customers for your new product. You feel comfortable with the $2,000,000 million in first year sales due to pre-launch orders and don’t want to risk going after other potential markets/customers that are not a “sure thing”. In other words, you’d prefer not to make a mistake and decide you are satisfied with the results of your initial foray.

Across town is another entrepreneur, a competitor of yours, in fact, who has developed a similar product. It only does about 80% of what your product does, but that competitor is confident that it is the “80% that matters” and that it will not limit the ultimate success of the product. Because the product does not have all the bells and whistles that yours does, your competitor only achieves $500,000 of pre-launch sales. Not satisfied with this, your competitor aggressively begins to explore alternative markets, uses, and distribution channels for the product. At first she finds little success, spending several months with very little to show for her incessant efforts. In the fourth month post-launch the competitor hits “pay-dirt” and strikes a relationship with a then little-known (in America, at least) Asian distributor of similar products. The relationship yields first year sales of $4.25 million, with strong profit margins, despite the distribution cost, as it turns out the Japanese demand is through the roof, permitting higher prices. The exchange rate also helps your competitor out.

So, in the end, your competitor achieves more than double your first year sales on a similar, competing product. What happened here? First, your competitor was not content with the pre-launch sales achieved, whereas you were. Second, for a wide variety of reasons, potentially including having a strong enough level of self-confidence to not be daunted by the prospect of encountering a bunch of “failure” before success, your competitor pressed on in looking for alternative markets and sales channels. Finally, your competitor viewed every “mistake” as an opportunity to learn and a step in the direction of their ultimate goal of maximizing sales and profitability of the newly launched product.

This situation repeats itself endlessly in the business world and in all other endeavors. Certain “players” become content with their achievements very quickly, long before achieving their ultimate potential. They become comfortable. They become afraid to make mistakes. Their ego is not strong enough to take any hits. They like their position as it is and they like the recognition they are receiving, so they don’t want to risk making mistakes and damaging their self-perception and the positive opinion others may have of them.

On the other hand, there are players who experiment endlessly, enjoying their successes, learning from their “failures,” but never completely content that they have achieved all that they can. They see mistakes and “failures” as opportunities to learn, not as a hit to their sense of self-worth. They learn to make as many mistakes as possible, as quickly as possible, so they can achieve their goals more rapidly and not stagnate. They understand the importance of making incremental progress and make smaller mistakes where possible — mistakes that will not “kill the company”. They’re not indiscriminate risk-takers betting the farm at every chance they get. Rather, they take a constant series of incremental risks, in order to learn, gaining whatever insights they can from each mistake, and then moving on. They do not dwell on mistakes.

Do you fear making mistakes, or do you see them as an opportunity to advance toward your ultimate objective(s)?

I look forward to your thoughts and comments.

Paul Morin
paul@CompanyFounder.com
www.CompanyFounder.com.

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Jun 222011
 
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How To Set Goals So You Will Achieve Them

Assuming you agree that setting goals is a worthwhile step, it is key to understand how to set them in a way that will increase the likelihood that you achieve them. The best and simplest model I have seen and used for setting goals effectively is the S.M.A.R.T. approach, which encourages you to set goals with the following characteristics:

[S]pecific: The goals you set for yourself should be as specific as possible. So, for example, you wouldn’t say “I want to have a profitable business”. Instead, you’d say I want to have a business that generates $2 million in sales and 25% EBITDA by year-end 2013. If you are setting a goal for yourself in the area of marathoning, you wouldn’t say “I want to run a fast marathon”. Rather, you would say, “I want to run a 3:10 marathon, with a 1:30 half split, by November 2012”.

[M]easurable: The goals you set should be measurable. That is, they should have a numeric or quantitative element that is measurable, rather than just be qualitative. If you cannot come up with a numeric element, you should at least come up with something that a third-party, objective observer could look at and relatively easily say whether you have or have not achieved that goal. For example, in business, it may be hard to specifically measure “empathy,” a desirable characteristic particularly for sales people, however if you’re working with a coach or mentor, they may be able to observe whether your demonstration of empathy toward prospective and current clients has improved over time. In sports, it may be hard to measure “awareness” of overall scenarios during a game; however, you may be able to come up with a proxy statistic that gives you a sense of the improvement in your awareness. Such a statistic in hockey or basketball, for example, may be assists. Where possible though, you will want to make as many of your goals as possible directly measurable. Examples in sports would be x number of assists, goals, wins, runs, etc. Examples in business would be sales, new accounts opened, net income percentage, etc. Chances are that in your endeavor, whatever it may be, you have a good sense of the metrics that you should be measuring and striving for.

[A]ttainable: It is important that the goals that you set for yourself are “attainable” or that you at least believe strongly that you can attain them and can put a plan in place to do so. If you are simply throwing down huge, unreasonable goals with unreasonable timeframes, you are setting yourself up for failure. I’m a huge fan of “stretch” goals and I strongly believe that you should challenge yourself as much as possible. That said, it is important that you set incremental goals along the way, so that you can see a clear path to your ultimate objective(s) and so that you can experience some successes along the way. If you structure your goals in such a way that you cannot experience success until the very end, you run a great risk that you will lose interest and/or belief in the process. So, in sum, challenge yourself with your goals, as that is the only way to achieve greatness, however, you should do so in such a way that you are able to experience incremental successes along the way.

[R]elevant: Often times I’ve seen the “R” of the S.M.A.R.T. acronym for goal setting used to represent “realistic,” but as far as I’m concerned, that is too similar to “attainable”. For this reason, I prefer to use “R” to represent “relevant”. Given that if you are focused on becoming great at your endeavor, you are undoubtedly a very busy person, it’s important that your goal setting be not just effective, but also efficient. It does not make sense to pursue goals that are not relevant to obtaining your ultimate objective of greatness. This idea relates closely to the concept I covered elsewhere of “taking out the trash,” or doing those things that you may not necessarily love doing, but you know need to be done. For example, in the context of goal-setting, it does not make sense to note goals for concepts or activities you have already mastered, even though it may feel good and be squarely in your comfort zone to do so. Rather, you should focus your efforts and your goal-setting on mastering those things you need to work on to accelerate your journey toward greatness in your chosen endeavor(s). There are exceptions, of course. For example, in tennis, if getting your first serve in is absolutely critical to success, there’s no harming in noting a first service percentage goal, even if you are already a great server. The point is, don’t do so to the detriment or exclusion of, for example, setting lateral and forward quickness goals, even if those may be areas that you don’t enjoy quite as much.

[T]ime-sensitive: Make sure that ALL the goals you set have a deadline or target date associated with them. This is of critical importance. A deadline usually forces us to become more focused. It ignites our competitive spirit and usually makes us achieve more, more quickly. Without a deadline or target date, a goal is more like a wish and it is far less likely to be accomplished. On the subject of time, it is also important to bear in mind that you should set short-, medium- and long-term goals for yourself. There are a couple of major reasons for this. First, as mentioned above, if you have some short- and medium-term incremental goals, this is more likely to permit you to enjoy some successes along the way to your ultimate goals. This should help with your self-confidence. Second, having incremental goals along the way is more likely to allow you to “course correct” on the path to achieving your ultimate goal(s). If you simply have one long-term goal out on the horizon, it makes it a lot more difficult to know if you are on the right track and make sensible adjustments if you are not.

It is important to set goals for yourself in all areas of your life. In particular, it is important to do so in the area(s) where you are trying to achieve “greatness”. It allows you to enjoy incremental victories en route and it also makes it easier to determine whether you’re on the right path and make course corrections as necessary. Make sure that as you develop your goals, you do so in a S.M.A.R.T. way.

I look forward to your thoughts, comments and questions.

Paul Morin
paul@CompanyFounder.com
www.CompanyFounder.com.

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Jun 202011
 
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Where Does Greatness Come From?

Let’s focus in on human greatness here, as there are a lot of types of greatness in the world. So, where does human greatness come from? No one knows exactly, but I will give you some ideas of the steps to get there, based on my in-depth study of over 250 of the all-time great historical figures in a variety of fields, as well as my interviews and conversations with a large sample of contemporary greats, in fields ranging from entrepreneurship, to the military, to science, sports and many others.

The first and most important lesson is that generally speaking, people are not “born great,” simply knowing from the very start that they are gifted in a certain area and that they will become one of the “greats” in that area. As previously discussed, as much as there’s a great deal of folklore and exaggerated stories out there to that effect, most human beings do not become great at something from one minute to the next, without a huge, concerted and inspired effort. The common wisdom now is that it takes roughly 10,000 hours of deliberate practice to move from beginner to expert in a particular endeavor. That does not necessarily make you “great” of course, but usually, if done correctly, it will at least get you to “expert” status. You will know more and be better at your chosen endeavor than the vast majority of the remainder of the human population.

So if it’s relatively clear what it typically takes to become an expert in a field, is it also clear what it takes to achieve “greatness” in a particular endeavor or field? Unfortunately, not really. In my experience as an advisor and coach and in my research, I have found a wide variety of paths to greatness. That’s good news and bad news, as the saying goes. It’s good news, since even if you are not or have not been on a particular path, it doesn’t, de facto, mean that you cannot become great in your chosen field or endeavor. It’s bad news because it doesn’t give us one well-defined path to zoom in on in an effort to achieve greatness. That being said, in my experience and my research, I have found some common threads of the path to greatness. I will lay out those commonalities in the form of a ten-step process to become great at anything. There are no guarantees, of course, as most of the hard work rests on your shoulders, but by using this approach, in my opinion, you will maximize the probability that you can become “one of the greats” in your endeavor.

The first step is to identify the area of greatness that you are pursuing. You should be as specific as you can, given that the more nebulous you leave it, the more difficult you will find it to make focused efforts toward achieving your goal in the steps that follow.

The second step is to uncover the key requirements to become great in your chosen endeavor. The four main approaches you will pursue in uncovering these requirements will be the following:

a. Go directly to the “horse’s mouth”. That is, you should contact one or several people who have already done what you’re trying to do – become great in your field – and ask them how they did it. Try to get as many specifics as possible.

b. Talk to one or several coaches in that domain. These could also be referred to as subject matter experts (SMEs) or maybe even SMEs with a bit extra, as they have chosen to be coaches and thus are likely oriented toward understanding how to maximize performance in your particular endeavor.

c. Read books by experts in the field. Reading appeals to some folks and does not appeal to others. There are also many books on tape now, which you can listen to when you are driving or exercising. If you are more oriented toward learning from video, you should also be able to find plenty of resources in that medium.

d. Watch true professionals in action. If what you’re trying to become great at is a sport, watch as many events as you can, but don’t just watch as a fan or casual observer; watch as a student of the game. Likewise, if your focus is in business or another area, become a curious student of all that happens in your field.

The third step is to take stock of your natural abilities. Take a look at your physical and mental attributes. Don’t judge yourself or determine whether these attributes are good or bad at this point, just take stock. Are you exceptionally tall? Are you great with numbers? Etc.

The fourth step is to look at your strengths and weaknesses relative to what you’ve determined that it takes to be great in your chosen endeavor. You’ll want to go into great depth here, as understanding where your weaknesses are, for example, will allow you to structure your practice in a way that helps you to optimize your use of time and accelerate your road to greatness.

The fifth step is to focus in on your “why”? That is, why do you want to become great at this endeavor? What is it that’s driving you? Is it a “strong why”? In other words, do you think it is sufficiently strong to drive you to put in and maintain the extraordinary effort and concentration level that will be required to become great?

The sixth step is to set goals for yourself. You will want to set short-, medium- and long-term goals that take into account the requirements to become great, as well as the specific areas you’ve determined where you need to make improvements. Monitor progress toward your goals and make sure that you set a timeline for completion of each goal.

The seventh step is to constantly reinforce your belief that you can attain the goals that you’ve set for yourself to become great in your endeavor. This belief will be reinforced regularly if you have set your goals in a way that they are achievable on an incremental basis. Allow yourself to achieve small victories along the way, as this will nurture your belief. As with the later step of maintaining calm, you will also want to use positive self-talk and visualizations in this step.

The eighth step is to develop a detailed preparation schedule that is oriented toward reaching your goals and achieving greatness. Regardless of what your endeavor is, you may want to work with a coach or other qualified third party to ensure that your preparation schedule makes sense in terms of getting you to where you want to be without burning you out in the meantime.

The ninth step is to make sure that you have in place a calming mantra and approach for when you get into stressful situations on the road to achieving your goals. If you are trying to become great at anything, no matter what the field, it is inevitable that you will encounter some, maybe even a huge amount of stress along the way. You need an approach to deal with fear and stress and keep progressing toward greatness. That approach will likely involve extensive use of positive self-talk and visualization.

The tenth step is to constantly work on and nourish your will to succeed and concentrate. In fact, based on my experience and research, this may be the most important step and factor in your success. There are very few exceptions among the historical and contemporary greats that did not have to exercise enormous power of will and concentration, usually on many, many occasions. Becoming an expert is challenging enough. Becoming great is another whole level and it almost always requires many instances of calling on massive willpower to overcome the inevitable obstacles that lie in the path to greatness.

We’ll go into each of these steps in much more detail, but this summary gives you an idea of the path you need to follow to move from beginner to expert, and then, if your “why,” your belief and your willpower are strong enough, on to greatness.

I look forward to your thoughts, comments and questions.

Paul Morin
paul@CompanyFounder.com
www.CompanyFounder.com.

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Jun 162011
 
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How To Succeed – Doing What Needs To Be Done

Once you have determined what it takes to succeed and become great in your endeavor, business, or sport, you need to do it. Sounds simple, right? Then why do we so often have a tendency to do other things, instead of what really needs to be done?

The reality is that, as human beings, we tend to do the things we like to do, rather than the things that need to be done. The term “comfort zone” arose from this tendency. We like to stay in our comfort zone as much as possible. Some naturally don’t mind venturing outside their comfort zone, but they are rare animals indeed. For everyone else, there are tricks to get you to “do the right thing” with greater frequency.

It all starts with ensuring that you understand what “the right thing” is. Have you carefully determined, as much as possible, exactly what it takes to be great at your endeavor? If you skip this step, you are shooting in the dark and leaving it largely to chance whether what you do and what you become good at have much relevance to becoming great in your endeavor. In startup entrepreneurship, for example, you may have heard that it’s important to raise capital, either via loans or from equity investors. So you become very good at raising capital and bring several million dollars of investments into your startup. You then quickly realize though that having sufficient capital on hand is only part of the picture and you squander the investments you’ve received. You must understand and strive to master as many of the key requirements as possible, not just the one that gets the most press, or the one you like the best.

If you’ve taken the time and put in the effort to truly understand what it takes to become great in your endeavor, you’ve created a very good foundation for reaching your goals. Speaking of goals, and we’ll talk about this more elsewhere, have you put any in place? If not, how will you know if you’ve succeeded? What will you use to motivate you to do all the things you need to do for success, rather than just some of them? Be sure to set goals that are well-defined, have a timeline, and are attainable. Set smaller goals along the way, so you can feel “successes,” however small they may be, which help you gain confidence and will further motivate you to “take out the trash” – to do those things you don’t necessarily like to do, but that you know need to be done in your preparation.

Ok, so now that we’ve brought up “taking out the trash” or doing what you don’t necessarily love to do, let’s go back to the example we used elsewhere – trying to become a great clay-court singles tennis player. Let’s take another look at the simple requirements/strengths/weaknesses table that we used in that example.

self assessment matrix - tennis

In this example matrix for becoming a great clay-court singles tennis player, our previous focus was on first understanding the requirements for becoming great, estimating their relative importance, and then assessing ourselves against those requirements, potentially with the help of a coach or other third party. The idea was then to prioritize our actions, giving higher priority to those areas of greater importance where we were not currently as strong. An example above would be working on improving our forward speed – it has an importance of 9 on a 1-10 scale and we assess our strength in that area as a 6 (also on a 1-10 scale). Our coach assesses our strength in that area even a bit lower. This would be a great area to focus in on, given that it has significant potential to impact our ability to achieve our goal of becoming a great clay-court singles player.

Continuing with this example of improving our forward speed, which would come very much in handy on a clay court, where opponents tend to hit a lot of drop shots, let’s say that you really dislike running drills. Then, to use the terminology from above, this would be an example of “taking out the trash” – doing something that you don’t necessarily love to do, but you know needs to be done. Given that your lateral speed in the example matrix above has similar importance and was also assessed as a relative weakness, it wouldn’t be too surprising if you truly viewed running as “taking out the trash.” What would most people do in this case? Quite frankly, they would do absolutely nothing. They would find every excuse not to “take out the trash” and they would continue to be mediocre at best with their forward and lateral speed. Those that were truly determined to become great, on the other hand, would do as much speed and running work as they could to overcome this known deficiency. They would also do the same with any other known deficiencies, thus giving their opponents less weaknesses to pick on and giving themselves more confidence to proceed en route to achieving their goals.

So what is “taking out the trash” in your endeavor? If you’re an entrepreneur, is it making phone and in-person sales calls to new prospects? If you’re a musician, is it practicing a certain note that constantly gives you problems? If you’d like to become a veterinarian, but don’t love math and sciences, is it somehow learning how to love them so you can achieve your dreams? If you’re an aspiring basketball player, is it shooting free throws? You get the idea. If you’ve done your homework to understand the requirements and been honest with yourself in assessing your abilities versus those requirements, you’ll know what needs to be done. Some of it you’ll enjoy doing. That will be what you want to do most of the time. Some of it you won’t enjoy doing; in fact, you may really dislike it. It may however be very important to your success. This will be the “trash” you need to take out.

Do you care enough to “take out the trash” as much as possible? Can you stomach going outside your comfort zone and doing whatever it takes to succeed?

I look forward to your thoughts, questions, and comments.

Paul Morin
paul@CompanyFounder.com
www.CompanyFounder.com.

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