Planning, Startups, Stories

To Define Success, First Define Failure

It took me a couple decades running my own business before I realized that everybody in their own business should step back, every so often, and define success. It isn't obvious. Some people want business growth, some want recognition, some want independence, some want to stay at home, and some want an office to go to. People are different.

Then I realized, that at least in my case, a lot of what I did in going on my own and then, later, building that into a business, was about avoiding failure.

Does that seem weird? Still, I think it works for a lot of people. Think about it.

• Failure is missing payroll. Running out of money. Closing the doors.
• Failure, for most people, is destroying a relationship. Working all day and all night, constantly irritable, rationalizing, that you're doing it for him or her or them. While you slowly lose him or her or them.
• Failure, for most people, is not having enough money to pay the mortgage, buy the kids shoes, do something different on weekends, the occasional vacation, living.
• Failure for some people is not making it big, not getting financed, not getting acquired.
• Failure for some people is not being rich or famous.

I went out on my own, quitting a good job, because I wanted to do the work (planning, market research, in my case) instead of supervise other people doing the work. But as I did that, it wasn't exactly doing what I wanted; it was doing what I wanted without hitting the failure alarms of any of the first three points above. The fourth and fifth didn't matter that much to me.

So what was success? I suspect, in retrospect, I defined it as not failing. Doing what I like, spending the day working on things that interested me, and, as time went on and the company grew, in a friendly office with people who shared the vision and were fun to work with, but without running into any of those first three failures.

Does that make sense? I wonder if I'm the only one.

The Future in 5 Minutes

Consider these predictions. They're all based on identifiable trends. Ask yourself how this affects you, your business, and your business future:

• In 10 years, the number one English-speaking country in the world will be China.
• By 2011, 90% of all the engineers in the world will live in Asia.
• In 20 years, two thirds of the world's middle class will live in India and China. That will be 1.15 billion people, an increase from 430 million in 2000.
• The Chinese instant messenger system QQ has more than 342 million users.

This five-minute video puts a quiet, almost peaceful, musical background behind a series of startling Futures Group predictions of drastic change coming soon to a world near you.

If for any reason you can't see the video here on the blog, just click here for the source video on YouTube.

My thanks to Kare Anderson of MovingFromMetoWe.com for posting to this. The title, The Rise of the Rest comes from the title of a recent book by Fareed Zakaria (Newsweek International Editor).

8 Myths About Sleep And How To Make The Quick Fix

I just caught this post --  8 Myths About Sleep And How To Make The Quick Fix - on Toilet Paper Entrepreneur. Good post, seems to me like a must-read for the entrepreneur. 

I'd summarize the list here, but you're better off to read it at the source. It's a quick and easy read. Some of this is disturbing, too. For example:

• One hour less won't hurt. It does.
• Your body adjusts quickly to new sleep schedules. It doesn't.
• The older you get, the less sleep you need. Damn. I wish that were true.

And, perhaps most interesting to my fellow entrepreneur-insomniacs, "a recurring inability to sleep is usually due to stress." It turns out that it isn't so. I'm not sure whether that's good news or bad. It's news though, I'm sure of that.

By the way, strange title for a blog, the toilet paper reference, but that's a good blog, particularly for first-time entrepreneurs. This is not the first time I've linked to it. I just added it to my 'Good Blogs' list.

Entrepreneurship: Do You Have What it Takes?

Last month I posted two lists of entrepreneurship traits -- a list of traits of entrepreneurs and another of traits of successful entrepreneurs -- that got more page views and comments than normal. Yesterday I saw Dr. Rekhi’s top 10 traits for an entrepreneur. It's yet another list, offered by Dr. Kanwal Rekhi, now a venture capitalist, previously an entrepreneur. And this one is way too good to ignore; it makes me want to revise my list.

Dr. Rehki's list starts with Honesty. He says:

Intellectual honesty. Brutal honesty. You can never fall in love with your business. If you do, you will fail to make the hard but necessary decisions.

From there he goes to humility, accountability, and fairness, which he describes as "proportional rewards." On accountability, -- and I've done a lot on accountability lately, I wish I'd put it as well as this -- he says:

Accountability to yourself and your team. You ultimately have to be able to say that you accomplished something or that you did not. If not, why not? You cannot ever blame others. If you fail, it is on your shoulders — no excuses. If there is no accountability at the top, others below also will not feel accountable.

He describes economics a lot like what I call the best of business planning. This is his fifth point:

Economics. You have to be able to determine values and prioritize these values. The highest value-added issues get prioritized. You also have to understand the fundamentals related to costs and margins.

I also want to highlight this description of "execution intelligence":

Execution intelligence. Investors pay a premium for this rare skill. For every great idea that you have, there are 10 very smart people with the same idea. What will make the difference is the ability to execute. Ideas are a dime a dozen.

So here's Dr. Rehki's list of 10 points, in the order they appear:

1. Honesty
2. Humility
3. Accountability
4. Fairness
5. Economics
6. Expertise
7. Execution intelligence
8. Leadership
9. Self reliance
10. Confidence

And my thanks to Prof. David Orozco for his summary of this, and to David Miller of Campus Entrepreneurship for pointing it out.

Accountability Part 4: Crystal Ball and Chain

(This is the fourth of a five-part series for Small Business Trends on accountability in the new world, the increasing need for fundamental accountability in small business as the business landscape breaks apart into cyber vs. physical. Part 1 was War of the Worlds, Part 2 was Both Sides Now, and part 3 was Metrics and Management. Readers have added some excellent comments too, both on the originals at Small Business Trends, and on the reposts on this blog.)

I've been around long enough to have experienced the introduction of accountability through planning, metrics, and management in actual real-life business situations many times. That's led me to develop the theory of the crystal ball and chain problem. It's very common. It gets in the way. And you can avoid it.

It's Very Common

True story: back in the middle 1980s I was consulting for Apple Latin America. When general manager Hector Saldana asked me to do the business plan for the fourth year in a row, he added a condition: "you have to stay around to help us implement." Gulp. Accountability, oh no. But I did. And it required getting a dozen middle managers to set up specific concrete and measurable goals so we could review, track, and manage.

The early response included some negative reactions. We talked. It became clear that some worried it was about getting them down on paper with specifics that could be used against them later. Tracking as planning for firing later if they failed to meet the goals.

We had a gamesmanship problem. It comes up a lot with sales quotas that trigger bonuses. Sales wants a low quota so they can beat it. Management wants a higher quota so the salespeople have to work harder. That kind of thinking made it harder to create a clean and healthy planning process. That's the crystal ball and chain.

That one story is a good illustration, but it's just one of many. It happens a lot.

It Gets in the Way

A good clean planning process, the foundation of accountability, requires realistic achievable goals. But when people start gaming the goals, the system is much harder to deal with, and much less likely to produce benefits in accountability and management.

It's not just the middle managers; it goes both ways. I've seen people try to sandbag their goals -- keep them unrealistically low so they can beat them -- and I've seen owners and managers trying to inflate their goals -- make them way too high so people would have to work extremely hard, and still not reach them.

And You Can Avoid It

Avoiding the crystal ball and chain problem takes two steps: first, talk about it openly; second, manage it right.

For the talking step, you -- owners and managers -- promise everybody that it's about cooperation, coordination, and teamwork. Make it clear that you want realistic goals throughout.

Use this example: the original annual plan, developed mostly in the Fall, called for a big seminar program in May. As it turns out, May is a bad date because a key audience group is already committed to something else. With a good planning process, the monthly plan review meeting in March turns up the problem with May, so the project is moved to July. Everybody wins. Nobody is saying that the manager in charge gets dressed down in June for having failed to implement as planned for May. The process turns future guesses into reminders and alerts to make better management with the ongoing plan.

For the second step, managing it right, make sure you do. Schedule in advance a regular monthly review meeting and stick to the schedule. Keep it short and specific. Review results of the recent past and look ahead to specific milestones and events in the near future. Watch for changed assumptions. Make it from the top down a matter of cooperation and coordination, rather than crystal ball and chain.

10 Traits of Successful Entrepreneurs

It started as a comment at the bottom of my 10 signs you're probably an entrepreneur post on this blog, a few days ago. What are the traits of successful entrepreneurs?

I was quoting a Twitter friend, Andrew Patricio. I hope you saw that list. I identified easily. But I can't help thinking about that comment left by Robert Hacker:

Next post should be a list of the characteristics of successful entrepreneurs :) If you do not write it I will.

That's quite a challenge. What, besides the obvious, do successful entrepreneurs have in common? I know I'm not sure. But at least I can get the idea started. Maybe you can help. What am I missing?

1. There's a lot of talk about P-words: passion, perseverance, and persistence. I mistrust all three. A lot of unsuccessful entrepreneurs have them just as much. You have to have some variation on these traits, but you can have all three and still fail. You and I both know people who never made it and never stopped trying. My favorite P-word in entrepreneurship is planning, but that's just me. Stubbornness is good too, even without starting with P.
2. I like empathy, as in understanding how other people think and feel about things. Empathy leads to understanding what the people you sell to want, what they need, how they think, and how to best reach them. It's hard to imagine somebody building a company without being able to put themselves in the buyer's state of mind.
3. A sense of fairness. For dealing with vendors, customers, and employees.
4. Transferable values. This is closely related to the sense of fairness. I just don't see people building businesses without believing in what they're doing. 
5. Willingness to work hard, shoulder to shoulder with other people. Cliche, but true: the harder I work, the luckier I get.
6. Knowing what they don't know. To me that's much more important than what you do know.
7. Listening carefully. Shutting up.
8. Vision for what they can build. Imagining a happy future. Dreaming.
9. Making mistakes. You have to deal with failure. Keep pitching.  
10. Jumping viewpoints, like from short- to long-term in an instant, mixing those viewpoints together. That's like dribbling, keeping your eyes up while managing the ball at your feet.

So there's 10. Everybody likes lists of 10. Go ahead. Add some more. Make my day. 

10 Signs that You're Probably an Entrepreneur

As I watched this list flow by in Twitter, one point at a time, it seemed fascinating to me that the list seems to describe me. I had to answer yes to all 10 points. Are these really all associated with being an entrepreneur? You be the judge:

1. You don't read long emails
2. You have a short attention span
3. You look forward to Mondays
4. You hate meetings
5. You're very impatient
6. You don't stand in lineups (wait in lines)
7. You don't REALLY read long contracts even though you say you did
8. You hate small talk
9. You think most things could be done much quicker
10. You often have business dreams

As for me, yes, on all 10 points. Well, sure, with some ifs-and-buts-about-it: maybe I don't hate all meetings, just most of them; and maybe I miss the days when I could focus in hard for several hours and get way more done that I would have thought possible; but still, most of these points hit right on.

So I followed up. The list came from Andrew Patricio, who turns out to be an entrepreneur and a trainer of entrepreneurs (his Twitter bio says "I was born to inspire entrepreneurs") from Ontario, Canada. I'd been following him because of some interesting tweets. We haven't met. In email, he told me he came up with this list while sitting in a doctor's office waiting for an appointment.

Since then (a few days ago), Andrew has posted a revised list (more points) on his blog, BizLaunch Canada. 

Re: Fear Is Easy, But Hope Is Smarter: Are Those the Only Choices?

I picked this up from the American Express OPEN forum: Fear Is Easy, But Hope Is Smarter. Are those the only choices? How about carefully planning the right responses. Taking action. Reviewing the situation, revising the plan, focusing on priorities, making it through the downturn and out the other side?

To be fair, David Cassel's actual post is way better than its title.

I think the conventional wisdom is wrong, and 2009 offers a lot of new possibilities. Yes, the landscape will be radically different — but there’s real opportunity mixed in with the challenges. We’re approaching the end of a year that we’ll always remember — but here’s my strategy for the year ahead.

That's a bit too bright a picture for most, but he does offer some specific suggestions.

Now is the perfect time to maximize your online sales outreach. A friend told me about a collectibles store in Boise that discovered a new audience online. Suddenly they weren’t limited to collectors in a single city; they could sell to the entire planet. In some ways, online shoppers are easier to reach, by targeting campaigns through sites like StumbleUpon and Google AdWords. Some businesses report the cost-per-conversion is actually cheaper with online sales.

And, of course, there's also the standard advice like be careful, sell stuff, buy stuff (with more explanation), watch your spending, and, in the end, have hope.

Work on Stuff That Matters

The title caught my eye: Work on Stuff that Matters. By Tim O'Reilly, of O'Reilly Media.

Yes, I agree. I get it that we're in a downturn now, tough times for a lot of businesses, we're losing jobs, businesses are going under; but in the meantime you stay focused on value, do a good job, and get through it. The good businesses will survive and prosper, and the new businesses that fill wants and needs, and give value, will grow.

That post is really good, go read it. But if you insist, here's a short summary.

1. Work on something that matters more than money. "Think about what you really value ... Don't be afraid to think big." He continues:

Don't be afraid to fail. There's a wonderful poem by Rainer Maria Rilke that talks about the biblical story of Jacob wrestling with an angel, being defeated, but coming away stronger from the fight. It ends with an exhortation that goes something like this: "What we fight with is so small, and when we win, it makes us small. What we want is to be defeated, decisively, by successively greater things."

One test of a bubble is how many entrepreneurs are focused on their upcoming payday rather than on the big things they hope to accomplish. Me-too products are almost always payday-focused; the entrepreneurs who first made the market often had much less expectation of easy success, and were instead wrestling, like Jacob with the angel, with a hard problem that they thought they could solve, or at the very least make a dent on.

2. Create more value than you capture. He refers to Jean Valjean in Les Miserables, makes his point very well. In one part he says:

Look around you: How many people do you employ in fulfilling jobs? How many customers use your products to make their own living? How many competitors have you enabled? How many people have you touched that gave you nothing back?

Focusing on big goals, rather than on making money, and on creating more value than you capture are closely related principles. The first one is a test that applies to those starting something new; the second is the harder test that you must pass in order to create something enduring.

3.Take the long view.

And, at the end, a very good conclusion:

That's why a time like this, when the bubble is bursting, is a great time to see how important it is to think about the big picture, and what matters not just to us, but to building a sustainable economy in a sustainable world.

Women Entrepreneurs Plan More

Interesting research:

Female entrepreneurs are more likely to plan their business development than their male counterparts, according to female business network Everywoman. Research from Everywoman highlighted that 55% of female entrepreneurs work to a business plan, compared with only 34% of male entrepreneurs.

The survey also found that women are more likely to set profit targets than men: 47% of female entrepreneurs compared with 37% of men.

The research also found that 88% of women predict that their business will grow over the next five years, compared to 74% of men.

ATOTH: I got this from The Productive Entrepreneur.