Nature vs. Nurture
Let’s settle this once and for all: IT’S NATURE. No one can teach you to have entrepreneurial passion. You can’t learn how to grow a burning, unquenchable desire for business. No one can train your attitude or make you intelligent. This is all stuff that nature has either given you or hasn’t.
You better have the entrepreneurial bug in you or you’ll struggle to have even a modicum of success. You can water the soil all you want, but you won’t grow a tree unless there is a seed first. If you have it naturally, then it can be nurtured into something great.
There is an important thing to note about nature; it doesn’t always present itself at birth or even in the early years. Sometimes your natural thirst for entrepreneurialism beats out of your chest when you’re twenty years old. Other people don’t feel it until they are collecting social security.
Nature’s calling. Answer it.
Go with Your Gut, Not Your Logic
Your beliefs are your core emotional responses; they are NOT based on logic. In other words, your beliefs are the thoughts behind your thoughts. If you are saying out loud, “I will succeed,” but your gut is saying, “You can’t, ‘cause you suck,” your gut will win out, and you will suck.
We all achieve what we believe deep down inside – this ain’t hocus-pocus, this is the science of how humans operate. Be very mindful of the thoughts behind your thoughts… your gut.
Join the Right Mob
Changing your beliefs doesn’t typically happen with a snap of the fingers. But one very effective method for changing your beliefs is to identify the people already achieving what you want and entrench yourself in their group. If you measure the common traits of your five closest acquaintances, you are equal to that.
Ignore or Adore
Don’t ignore the naysayers if they are your prospective clients or trusted individuals who have already tried what you plan to do. Do ignore them if they are just trying to stand in your way or are speaking from a vantage point of ignorance.
The best feedback is from people who have already done what you are doing.
Focus Small To Get Big
Name a company that launched to superstardom without a narrow focus. Can’t think of one? That’s because it’s never happened. Look at Microsoft: it skyrocketed to success on DOS, a simple program that made a computer more functional. Today it is a different animal, making software, video game systems, and computer hardware. But when it took off, it was due to its focus on DOS.
Google launched on a search engine. Now look at all the crap it does. Intel did it on processors. Cirque du Soleil did it on circus acrobats. Ford did it on the Model T. Procter & Gamble struggled with candles and then launched when it focused on soap.
To be a market leader, your company must excel in one laser-beam-focused area. Be better than anyone else, and continue to focus on improvement in that area, or you will be left behind.
Who’s Your Ideal Customer?
Starting a company is all about serving your needs, your beliefs, and your values first. You need to define your customer so well that you can pick him or her out of a crowded room of thousands of people.
This list of questions is far from complete and is simply a starting point.
- Where do they live and why?
- What do they cherish? Why?
- What do they hate? Why?
- What is their favorite TV show? Why?
- they even watch TV? Why not?
- What would they not be caught dead doing ?
- What is the most important part of their daily routine?
- they own a car, and if so, what is the make and model? If they own a car, how aggressively do they drive it?
- What pisses them off over and over again about your industry?
- Are they married or single? Are they gay or straight?
- How old are they? How old do they look? How old do they act ?
Recognize that by knowing one group so well, you will not know other groups at all. You may actually upset some people. This is OK. It is actually desirable. People who love you now will have a reason to defend you, further entrenching their adoration because you share a common “enemy.”
Create a Prosperity Plan
A Prosperity Plan is the overarching, never-changing (but often tweaked) document that describes what your company is all about. It is your written commitment to your company goals and the standards you will abide by to achieve them.
Here are the key elements of a visceral, motivating Prosperity Plan:
- Life Mission – What is your life’s purpose? Not your company mission, but your LIFE mission.
- Destiny – Once you know your life’s mission, you need to identify your Destiny. Think of your Destiny as your ultimate goals and those of your company.
- Immutable Laws – You have certain hardwired beliefs that can’t, won’t, and shouldn’t be changed. These beliefs are something we are all born with, and they continue to intensify over time.
- Community – The community is the people you are serving. You will be delivering something to them that is 100% consistent with YOUR Life Mission, is 100% moving YOU toward YOUR Destiny
Remember, your Prosperity Plan does not have to be realistic by today’s standards. In fact, it absolutely should NOT be realistic according to what we know to be true today. Nobody believed a man would walk on the moon; it seemed impossible, the stuff of science fiction or fairy tales. And yet a man did walk on the moon. So think and dream big, and don’t let concerns about how you will pull it off influence your Prosperity Plan.
Every Day, Review Your Metrics
Now that you know where your destination is, and you have your vessel tacking to it, you need to monitor the ongoing conditions.
Daily Metrics are the handful of numbers that instantly identify the health of the company, day in and day out. Is cash flow tight? The Daily Metrics can identify that. Are sales trends strong? The Daily Metrics can identify that. Is internal productivity dropping significantly? The Daily Metrics can identify that, too.
There are hundreds of options for your Daily Metrics, and a simple Google search on the terms “Financial Ratios” or “Business Ratios” will give you a hundred.
The key is to find a simple number that accurately indicates your current business health and predicts the future for your cash, sales, and inventory. Other important aspects that are worthwhile but a bit more difficult to track are client satisfaction, employee morale, and other non-tangible aspects of your business.
“No” Your Way to Success
Until you close some doors, it’s impossible to open others! Great business growth requires saying “No” way more often than you say “Yes.”
Saying “No” is all about sustaining your absolute focus. When you are starting and growing a business, the unimportant stuff keeps creeping in – the distractions, from reading every email every second it comes in (and clicking the send/receive button a hundred time just to check), to constant instant messaging fests, to “working” on “opportunities” that are not in your niche, to time-chewing meetings that don’t help anyone. You need to say “No” to this stuff and focus on what is important.
Haven’t Been There, Haven’t Done That
If you actually knew everything that would be expected and required of you to start your own business, you might actually be smart enough not to do it. That would be a shame .
Imagine if the Founding Fathers of the United States thought about every variable and planned out every detail of the American Revolution. If they had thought it through, they surely would have known it was foolish even to try.
The impossible become very possible because the Founding Fathers weren’t bogged down by what they didn’t need to know. They hadn’t been there and they hadn’t done that. Thank God. The learning and the tweaks and the changes all happened as they moved along. The only constant was their vision.
Just in Case You Haven’t Started Yet, Here’s How
It’s not enough to simply say that you should take action; you actually need to do it. Even if your actions are not greatly productive at first, at least you are doing something. Yapping about your ideas and dreams doesn’t count; get off your ass and get moving. Here are a few tricks to get you started:
- Capture Your Action Items – As the ideas or thoughts of what you need to do cross your mind, write them down on a list. There is comfort in knowing you have a record of what needs to be done. That alone can help you focus and start taking action.
- Prioritize – A lot of things you need to do are small, quick items, but they can swallow up time just by wasting an eternity winding up and down from them. Prioritize a list of the important stuff first and group together the smaller stuff to be done in one shot later. Or better yet, have someone else do the smaller stuff.
- If it Only Takes Two, Do – Sometimes tasks are so simple and quick that the time you would take to get them recorded and prioritized would take longer than just doing them in the first place. If you have tasks that clearly can be completed in under two minutes, do them right away. Don’t waste any time trying to manage these things.
- Eliminate Time-Wasters – Some tasks just aren’t worth it. Scratch them off your list and forget about them. Don’t delegate them to someone else either, and waste her time. If it’s a waste of time, it’s a waste of time.
- Go in Spurts – Many people perform better by working in shorter segments, taking a break from the action, and then starting up again . Try it. Go into a task with the promise that you will both take breaks as needed and get right back to it when break time is over
Sometimes You Need To Borrow
Bootstrapping is the hardest road to travel, but it greatly increases your chances of arriving at the castle a very, very wealthy king.
Starting a company takes guts, persistence, tenacity, and passion, but stupidity is not part of the formula. You need to have some money to live. Your job is not to prove to the world you can make it on your own by becoming homeless. There are times when you might need to borrow cash. There may be other times you have to work at the Burger King just to keep cash coming in – but every other waking hour must be devoted to launching your company, paying back your debts, and driving toward success.
Bankers Are Anchors
The first source of money entrepreneurs traditionally think of is bankers. That’s the old school approach and is probably the last place you should go. Bankers aren’t bad people; they just don’t easily understand non-traditional business plans and are risk-averse by nature. Banks are looking for simple, low-risk investments that offer consistent return. A new startup rarely fits the bill.
So where should you go? The best sources of funding are the people who know you and know your capabilities. Who knows you better than you ? Nobody! So the first place to borrow money from is you.
- eBay – Look through the attic, garage, and every crevice of your home. From baseball cards to old toys to your collection of slightly soiled porno mags, somebody wants your crap and will pay good money for it.
- House – If you own a house, consider refinancing and pulling the equity out. If historical trends stay true, your house will continue to increase in value over the long term. Just make sure you can afford the new payment, and avoid frequent refinancing, which may cost you dearly in the long run
- Car – But what if you don’t own a house? You may have a car. Did you know you could refinance your car? You can, if you own it. Just be careful. Since cars decrease in value over time, borrowing against them is a financial risk
- 401K & IRA – While 401K, IRA, and other investment-account money is intended for retirement, there are situations in which you can borrow from yourself penalty-free.
Watch Out for VIPs (Very Inordinately Paid Specialists)
Don’t give away equity or lots of money to bring in VIPs. VIPs are perceived to be of tremendous value because they have big names, or add credibility to your company, or have key contacts, or bring some other value to the table. More often than not, however, they don’t deliver. It’s simple, really. VIPs don’t deliver because they don’t have to. They receive the reward (money or equity) before doing anything . Think about it. Would you have started a business if you were already receiving the money, success, and effect that you want to achieve? Probably not.
Know that for your business, you are the VIP. It’s your blood, sweat, and tears, damn it, and for that you should be rewarded, not some freeloadin’ VIP.
Ideas Are Worth the Time Spent on Them
New business ideas are easy to think up and even easier to dream about. sIdeas don’t make money, effort does. Some ideas require a tremendous amount of effort and time. Think cool invention, working prototype, patent and salivating customer base. Add monumental effort and hard work, and your business may be worth something.
Gauge the value of your idea on the effort, not on the idea alone.
Angels and VCs Suck (Kinda)
Let’s get real here. VCs and Angels are putting money in your business as an investment. They fully want and expect to get a significant return, and fast. They are NOT philanthropists; they are in the business of making money. I’m not saying that these are bad people or even that there is no value in working with them; you just need to have absolute clarity about what their objective is.
Have you ever bought stock in a public company, maybe on the NYSE or NASDAQ? What mattered to you most? That the stock went up, and quick, right? Your goal was to sell quickly for big gains. Right?
Did you care about the cohesiveness of the management team or employee morale? Were you concerned about the personal fiscal health of the top decision makers? Did you wonder if the President had enough time to make it to the family reunion that weekend? Hell no! That stuff probably never, ever even crossed your mind. Your goal was to invest, make good money, and get out. That is the behavior of 98% of the VCs and Angels out there.
There is an appropriate time to consider seeking out VCs and Angels, though, and this is typically once you are already bringing in millions in revenue. At a certain point your growth can be rapidly boosted through an injection of money. That’s when you should consider this type of investor
The Right Way To Balance Equity & Partnering
Are you still convinced that you can’t go it alone, that you will be more successful with the right partner? You may be right. It worked for Sergey Brin and Larry Page. Here are the right ways to choose a partner for your business:
- Rather than go in 50/50, let the partner who is performing at the highest level have the majority of the company. Performance-based equity distribution motivates both partners to work hard and creatively for the success of the company and rewards the partner that excels.
- Determine specific metrics and critical goals for the company’s growth. These may include sales volume, billable hours worked, purchase savings, customer feedback and products/services developed. Have at least three performance variables but no more than five. Then, every quarter for the next two and a half years, review the achievements and split 10% of the equity. At the end of these ten quarters the entire 100% of company equity will be assigned, and the partners will be fairly rewarded for their contribution to the overall success.
It’s a Big Deal To Be Small
Partner or not, funded or not, you will start small. This is a very, very big deal. And you can use it to grow big.
Would you call Wal-Mart an intimate experience? Not at all! The mega-stores and mega-businesses have an important place in the business world, but they don’t have the only place. It is a big deal being a small business. The world needs you.
This is your advantage in being small, and you need to exploit it big time .
- Not Much to Lose – Think about it: you have very little to lose. This is quite possibly your biggest advantage. If an idea has potential you’ll go for it because you’ve got nothing to protect.
- The Underdog – Everyone loves to root for the underdog. Take college football. The nation went crazy over Appalachian State’s win over Michigan
- Speed – You can move faster and more nimbly than the big guys. All the red tape, back-stabbing, political games, and bureaucracy that occur at big corporations don’t happen within a small company, especially when it is just you.
- It Matters – If you have ten clients and you lose one, that’s ten percent of your business. If a mega-store loses one, it doesn’t care. It cares about the overall trend.
- Break the Rules – The big boys have been around the block so many times that they adhere to rules they no longer need. A small, nimble competitor like you can identify the industry rules, take what you need, and then break the rest wide open.
