Category Archives: Entrepreneurship

Recently I was at a dinner with a few successful and experienced serial entrepreneurs and the discussion covered topics such as:

• How to deal with failure
• How to assess the caliber of a person you might want to hire
• How to make sure candid feedback is flowing through the organization, especially from the lower ranks
• Work-life-balance
• How to listen to customers without listening too much

The following night I was at a dinner with a few first-time entrepreneurs, young and green. The discussion covered topics such as:

• How to deal with failure
• How to assess the caliber of a person you might want to hire
• How to make sure candid feedback is flowing through the organization, especially from the lower ranks
• Work-life-balance
• How to listen to customers without listening too much

The questions and issues at both dinners were the same. What differed was the sophistication of the answers and the depth of the specific examples to buttress an opinion. But fundamentally, the experienced entrepreneurs were struggling with the exact same issues as the first-time entrepreneurs.

It's like in basketball. From third grade to the peaks of the NBA, coaches talk about the same stuff: footwork, ball-handling skills, boxing out, two handed passes, and so on and so forth. The fundamentals. You'll sometimes hear commentators talk about a struggling basketball team too enamored with fancy plays, scouting reports, or esoteric training regimens. The great John Wooden, they'll say, just coached the fundamentals over and over and over again.

In business the same is true, I think. Smart entrepreneurs, even as they accumulate experience and wins, still obsess over the key principles taught in Business 101: build stuff that people want, tell a story, hire amazing people, go after a big market, fail forward, iterate, and so on. They re-read Peter Drucker instead of the latest management guru. They still practice layups and free throws.

Eric Ries writes an excellent blog on start-up tech entrepreneurship called Lessons Learned. It's one of the few very good instructional blogs in the entrepreneurship category.

A lot of people struggle to understand why people buy silly icon-gifts on Facebook or purchase different product features in online virtual worlds. Eric's most recent post in a sentence: If you're trying to understand the economics and psychology around virtual goods, remember that you already buy virtual goods.

As he says, all "real world" products — like the jeans you're wearing — contain a virtual goods component, such as the premium you pay for the cool brand that offers no additional practical value.

Every product's value consists of the following tangible and intangible elements, he says. The more your product can tap into the "virtual" benefit chain (like Apple products becoming part of the customer's identity) the better off you are:

I do not choose to be a common man. It is my right to be uncommon – if I can. I seek opportunity – not security. I do not wish to be a kept citizen, humbled and dulled by having the state look after me.

This, with my family and friends, I have done. All this is what it means to be an entrepreneur.

Author unknown, via Dave Asprey.

How can you contribute value to someone who knows more than you about the topic at hand, someone who’s the “insider” when you’re the “outsider”? Though there are a million life examples, this is notably a challenge all board directors face when interacting with their CEO who’s closer to the details.

Ask good questions.

But asking good questions is very hard. So here’s one type of question that almost always helpfully provokes: a probe on alternative causal explanations.

The CEO says: “We didn’t close the deal because our competitor undercut us on price.”

Question: “Are you sure it was price and not a poor sales presentation or the product lacking necessary functionality?”

The best advice (or should I say, the kind of advice most listened to / followed) is often given in a form of a question, and the best questions often make the person re-consider assumptions.

Bottom Line: People — especially entrepreneurs — can be quick to jump to clear cut causal explanations for events. An easy way to be helpful when asking questions is to probe on alternative explanations for why something happened.

My friend Josh Kaufman runs PersonalMBA.com, a great resource for those who want to improve their business knowledge via books. Today Josh issued a challenge to his readers to do a side project in 2009. I'm a huge fan of side projects (something you do alongside your full-time day job) and have a long article coming out soon on this topic. Here are Josh's guidelines:

1. Treat it like an experiment. The best reason to take on a side project is that you’re curious about a certain topic and you want to learn more about it. There’s no need to freak out over “committing” to something – you’re being an adventurous explorer here, not committing yourself to years of drudgery. [BC: And it doesn't have to have anything to do with work. Take a risk and try something new on the side!]
2. Make it positive. A project is some achievement you want to move towards, not something you want to move away from. Avoid phrasings like “I’m going to stop doing ________________”; use words like “I’m going to accomplish / create / build / improve ________________.”
3. Make it immediate. A project is something you’re working on now, not something you “plan to work on” at some indeterminate point in the future. Avoid phrasings like “in ________________ months” or “someday I’d like to”; use words like “by ________________ date” or “I’m devoting ________________ hours to this each day”.
4. Make it concrete. A project has a tangible result in the real world. Avoid ambiguous phrasings like “improve” and “better”; use words like “I’ll have,” “I’ll achieve,” or “I’ll be able to ________________”. Tangibility is the key – it helps you envision what this project will look like when you’ve accomplished your goal.
5. Make it specific. You should know when you’ve achieved what you set out to do. Avoid phrasings like “________________ will be better”; use words like “I’ll have accomplished ________________”. Include as much detail as possible – it should be absolutely clear when your side project is a success.

What side projects are you going to hatch in 2009?