April 16th, 2013 → 1:20 pm @ Norman
There are lots of things to be afraid of on this planet. Business failure isn’t one of them. Yet many would-be entrepreneurs are paralysed by the fear of failure.
As I write this, the TV is showing the first reports of the Boston Marathon bombings. Such events are now commonplace around the world and are so frequent in some countries that they barely make our news. Then we have car accidents, disease, muggings… there are plenty of things to be afraid of if we’re prone to fear. For most of us, these events are just risks we live with. We shrug, take some precautions, and carry on.
Starting a business offers a substantial up-side in financial security and in a sense of accomplishment. The down-side is unpleasant; bankruptcy, anger from investors and family, perhaps some ridicule… but that’s all. So why are so many people who want to start businesses prone to paralysing fear?
Unlike things which can happen to us, like muggings and car accidents, starting a business is a matter of personal action and presumed control. We think we are totally responsible for the outcomes, and our egos become hugely invested in the process. Failure is a sign of personal inadequacy. (more…)
March 5th, 2013 → 9:17 am @ Norman
When my technology fails me, I get really annoyed!
It’s great having so much technology to help build business. I’ve got tools like PCs, smartphones, and iPads; business systems from Payroll through to Microsoft Office; connectivity through Blogs, Facebook, Twitter, Google Drive, and LinkedIn. My business is loaded with useful technologies! The trouble is, I’m becoming more and more dependent on other people to keep them all working.
The consequences of technology failure are such that any smart entrepreneur puts a lot of effort into backup systems, password protection, and intrusion detection. I have data backed up on portable hard drives, and in the Cloud. I have a password-protected system for storing all my passwords, and my intrusion protection systems are thorough enough to make updating software a nuisance. But I’m still vulnerable.
I’m neither technologically competent, nor interested in technology for its own sake. That makes me dependent on the people who configure and maintain my systems. In engineering we measure the probability of failure of the system by multiplying the reliability of each individual component. So a system with two components, each with 99%reliability will have 98.01% reliability (.99 x .99). Thus, the more components that are added, the lower the system reliability. A system with four components, each 99% reliable, will have an overall reliability of only 96.06%. My business has many technology components, each with an inherent reliability which relates to its design robustness, how it inter-relates with the other technologies, and what happens when a software provider does an update. With so many factors, I get many failures, most of which can be fixed by software patches, system reboots, or throwing a tantrum. But there is yet another source of system failures… other people. (more…)
February 4th, 2013 → 10:35 am @ Norman
I’m helping a young entrepreneur to get a franchise business going. The business model relies on franchisees having sales reps knocking on the doors of local businesses. But before we can recruit franchisees, the entrepreneur has to prove that the sales model works. That requires her to make the first sales herself. And that’s where the problems started. (more…)
November 14th, 2012 → 7:24 am @ Norman
I was at the first meeting of an ‘Entrepreneurs Club’ the other day. The discussion focused around how to get into international markets, and specifically whether we should use a traditional goal setting/marketing driven systematic approach, or should instead focus on chasing ‘easy wins’ to build credibility and cashflow.
One academic suggested that entrepreneurs are timid because we often focus on markets we know and contacts we can leverage. An advisor from a large consultancy firm supported that view, arguing for more market-focused planning to ensure we find and understand the best market to address.
Their views reflect a common opinion of entrepreneurs. We’re seen as unstructured and often undisciplined, like hounds chasing rabbits in a field of opportunities. The evidence cited is the lack of a complete plan, and a tendency to abandon opportunities when better ones come along. But that’s not what I see happening. Entrepreneurship is more like surfing, and the more innovative the business opportunity the more a surfing analogy applies. (more…)
September 4th, 2012 → 1:38 pm @ Norman
I decided to chop a couple of trees down last weekend. The idea was simple enough; they’d grown tall enough to begin blocking my ocean views. So I thought I’d launch a pre-emptive strike and remove the threat before they removed the view. The problem was that the trees were growing on a cliff, and I had no ropes with me.
I did a risk assessment. The biggest problems were the quantity of loose material which would give a false impression of safe footholds, and an overhang. Otherwise, it was a pretty small, simple cliff. I felt pleased with myself. I have been accused in the past of undue recklessness but I believe I’m mellowing with age. I knew I should have gone for ropes, but I had enjoyed free climbing when I was young; and this was such an easy cliff… (more…)
July 30th, 2012 → 5:58 pm @ Norman
Many entrepreneurs I’ve worked with become trapped in patterns of behaviour. They’ve tried a certain sales style, a way of interacting with staff, or a planning process, and it worked. So they keep doing things the way they always do them. Then, because they’re self-confident and opinionated people, they start to see their way as the only way. They preach the mantra of ‘learning by doing’ but they have lost the ability to learn, because they fail to reflect on their own behaviour (using all their reflection time to think about business problems). I help entrepreneurs to regain their flexibility of thought by encouraging a cycle of action, reflection, then more action. That’s pretty standard stuff, and it can be very helpful, particularly if they have to account to me or their Board for the outcomes of the reflection. But now I’m trying something else. (more…)
June 18th, 2012 → 8:12 am @ Norman
Last week I facilitated a discussion of Governance with a Master of Entrepreneurship class. Before the class, I sat over a leisurely lunch reviewing my notes. I felt uneasy, and realised that I wasn’t comfortable about what I was about to say. So I explored the source of my discomfort.
The problem was simple. I had prepared a strong case for good governance in start-up companies, and clearly identified the differences between governing young companies and governing more established ventures. But I had glossed over the biggest ‘real world’ issue …. Most start-ups I’ve come across would have been better off without a Board than with the Boards they assembled. It’s hard to promote something which is theoretically valuable but which has so often proven to be useless or even harmful to the start-up. (more…)
May 7th, 2012 → 3:13 pm @ Norman
The entrepreneur brought me his plan a few months ago. I agreed it looked achievable, and was ready to go… a nice web-based business. I suggested that he generate some sales before the investors committed their money.
Six weeks later he was back to report the first $30,000 or so in sales…. A good start!
The entrepreneur signed our papers, committing him to the deal. Before the investors would sign, I analysed the actual costs against budget. The costs were much higher. The entrepreneur explained that the model he had originally proposed wouldn’t work, and he had modified it. The modified model had a gross margin of 22%… not enough to build a profitable business. (more…)
April 12th, 2012 → 8:04 pm @ Norman
It’s 6 am, and I’m sitting in an airport lounge I didn’t intend to be in, at an airport I didn’t want to visit. My flight was cancelled yesterday because of ‘engineering problems’. At the same time, the airline had a problem with its information systems and they ‘lost’ my phone number (so they couldn’t let me know). I rocked up to the airport and received the bad news… too late. There were no more flights last night that were any use to me. My choices were either another night in a hotel at a regional city, or a van trip to a neighbouring city where I have friends I could stay with. I chose the latter, and here I am! (more…)
March 15th, 2012 → 2:05 pm @ Norman
Most weeks in the company-building game I have ups and downs, and this week has also seen both highs and lows. I am always mildly surprised by the intensity of my reaction to the low points. Even though I’ve preached to young entrepreneurs for years about the need to accept a great deal of failure and rejection on the path to success, and even though I know from decades of experience that it’s the truth, I still find both failure and rejection inordinately painful. (more…)