Category Archives: Entrepreneurship

Marketing author Seth Godin, who I respect a lot, recently published a new book. I want to point out a theme in his blog interviews (which he did instead of a media tour; I haven't read the book itself yet). With Gretchen Rubin there's this exchange:

Q: If you had to sum up in one sentence what you want a reader to understand from reading Linchpin [Seth's new book], what would it be?

Seth: The world wants you to be a faceless, replaceable cog in the vast machinery of production — but if you choose, and you work at it, you can become the sort of person we really need, an indispensable linchpin, a person who matters. The marketplace needs and embraces artists, creatives, initiators, challengers and movers. You have that skill, the challenge is unearthing it.

I.e.: Everyone is an artist, you just need to look within yourself and choose to be one.

With Chris Guillebeau there's this:

Q: According to Linchpin, how do I become an artist? (What if I don’t know what I’m really good at?)

Seth: You do art when you make change that matters, and do it via a connection with an individual. A great waitress or conductor or politician can make art. So can David, who cleans the tables at Dean and Deluca. Art isn’t the job, it’s the attitude you bring to the job and work you do when you’re there.

It's the attitude you bring to the job. The next question:

Q: Are we all really geniuses? If so, what do we do to stop choosing stability over genius?

Seth: Well, if a genius is someone who solves a problem in a new and original way, then sure, you’re a genius. And the first step to making that choice is to know it’s available.

You can't disagree: the first step to solving a problem is knowing you can solve the problem. Again, attitude.

But to actually solve a problem in a new and original way requires much more than just thinking you can do it. For example, to change the world, you need to become really fucking good at something. Yet, unlike Cal Newport's thorough analysis of deliberate practice, the best-selling self-help books don't analyze the research of becoming exceptionally good at something. They stick to attitude. Which is necessary but hardly sufficient.

Here's the paradox: the folks who really need an attitude improvement are probably not aware of alternative mindsets. They do not know they have a "problem," so they are not reading books and blogs about a solution to a problem they don't know they have. The folks who are reading books about how to "crush it" and become a linchpin, by the very fact that they're sought them out, are displaying initiative and spirit. What they need is not another attitudinal pep talk — they need help on step two and three and four.

So who is buying these books? Thesis: Already-motivated people who think just a tiny bit more motivation and inspiration will make the difference. But I'm not so sure it will.

Hence, entrepreneurship must not require as much risk-taking as people think. This is James Kwak's short, persuasive argument, with more substance of course. He's a former McKinsey consultant who co-founded a company, and he does a nice job poking holes in Malcolm Gladwell's latest piece (abstract only) about entrepreneurship and risk-taking while not disagreeing with its essence.

The talk about risk-taking and entrepreneurship is an issue of perception: people think to start a good business requires betting the farm, or that the personalities attracted to the game are sky-diving flame throwers. Not so.

But false perceptions aside, how the heck do we encourage more of the risk-taking that's good and calculated and leads to real innovation? Here Kwak says:

The best encouragements to productive risk-taking are measures that limit the cost of failure for people who are actually creating something new, and this is one reason why Silicon Valley has been so successful. The financial risks of starting a company aren’t that big, for most people. High-tech companies are typically started by people who could pull in low-six-figure salaries working for other companies, so they’re giving up a couple of hundred thousand dollars in opportunity cost; the rest is typically angel investor or venture capital money. More importantly, there is (historically, at least), little stigma attached to failure, so there’s little reputational downside to a failed startup. In a world full of risk-averse people, that’s very important.

I bolded the sentence that is most critical. It is America's secret cultural sauce.

In the early days of a start-up forming an advisory board can be a great way to formalize and regularize the feedback you receive from experts.

I think an ideal advisory board contains big names with no time (whose name, by association, offers credibility in the sales or fundraising process) and no names with plenty of time to give you specific advice.

Among the no names who actually give you advice, I think an ideal mix in the early days emphasizes customer-centric folks — people with deep knowledge of the market you’re selling to. Perhaps even potential customers themselves!

The opposite of customer-centric advisors is “random business experts.” These are folks who are smart and experienced but don’t have specific experience in the niche your company is going after. They don’t have relevant experience in the exact market you’re playing in.

On day 1 of a start-up, perhaps 80% of the advisory board should consist of customer-centric folks, and 20% “general” experts.

As a company matures so does its understanding of the mind of its customers. And newer, different issues arise, and the composition of the company’s supporters and advisors evolves accordingly.

That’s why you see many publicly traded companies’ boards of directors filled with general business experts and executives from different industries. But you never see start-up boards filled with random big-shot attorneys or CEOs of companies in unrelated industries.

Bottom Line: The most effective start-up advisory boards seem to consist of big names with no time, and no names with plenty of time, and the no names have deep, specific experience in the specific customer niche of the start-up.