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Communication, Entrepreneurship

Above All, What it Takes to Succeed as an Entrepreneur

You might at first find this post to be a bit pedestrian with its advice. But, if you look past the sub headers and take in my full explanation you will hopefully embrace some insight that is much deeper than what it might seem on the surface.

There is tons of great advice out there in blogs and knowledge-sharing platforms aimed at making you more successful in life and in business. Of course you have to extract those nuggets of wisdom from a nest of charming listicles and bits of infotainment. Yup, there is a part of us that wants to believe that if you rise before 7, drink plenty of water, meditate and do all your difficult tasks first you’ll be able to write your own ticket sooner than later. So that type of content continues to proliferate.

In the world of startups, specifically, we continue to search for the formula for success. At the very least we aim to compile the right check list of factors, understanding that there is indeed some magic on how we combine the raw ingredients. As a result we value content such as what is provided in posts such as this from Product Hunt, which shares sage perspective about what investors look for in a promising new venture.

As I scroll through this and other articles I start to accumulate quite a list of necessary skills, tools and attributes. And truthfully I can’t argue with any of them because they all make a lot of sense. As a founder who is searching for answers, though, you may still find yourself unsure if you meet this extensive list of criteria; and, even if you do, are you as a result much more confident in your ability to not only survive but succeed.

The answer to this question is the subject of this post. For there are lowest common denominators among the mountains of advice, and these form the core of what is required for you to win:

  1. You have to know how to hit a bullseye.

I was originally going to label this section you have to know what is required, but instead I’m going to draw from my experience working for a huge healthcare products company that actually had fantastic and innovative leaders. Despite the fact that our workforce was populated with over-achieving MBAs from Top 25 U.S. schools, I heard one consistent complaint from management, relative to our collective skills in communication and decision-making:

“I wish our teams knew how to get to the bullseye of a situation”.

This issue is a function of both content and delivery.  On the delivery side we tend to speak chronologically and that just doesn’t work for executives…and is the reason why they interrupt a lot. They have a voracious appetite for problem solving and can get to the point in usually 3 questions or less. Most times, storytelling is not what they are after when they only have ten minutes to spare. They therefore prefer the first-the-headlines-now-the-news format.

Let’s chuck the delivery headaches aside in favor of the bigger issue which is content, and I’m completely on board. We as business people of all ages and backgrounds from startup to corporate are honestly not that great at identifying key issues or opportunities that lie at the core upon which all others depend. And there are a number of versions of this phenomenon: we can’t separate symptoms of problems from root causes; we can’t identify critical success factors; we can’t navigate a complex business environment to zero in on the precise opportunity.

In the world of entrepreneurship this problem in my mind is equally commonplace. And at the heart of the matter is our lack of the right combination of experience, marketplace understanding or sheer business intuition to uncover the issues that sit at the top of the priority list to address. I have written about this previously in my post about the Beautiful Mind of an Entrepreneur, which is above all the exact tool we need to have.

For those of us that have it, our minds work almost like google such that we can query and instantly return results. We have to be visionaries with surgical minds like the Shark Tank folks who can hear an elevator pitch and tell you in less than ten minutes if it’s likely to work or not. They know if you have found an open spot in the market or if you are going to hit walls, and they see them instantaneously.

And I don’t consistently see this talent in founders, and even among their teams and advisors. It involves knowing when to go deeper than, say, surface metrics, to uncover the very human elements of how markets function.It’s just a level of brilliance that’s much less commonplace than we would all hope, and it’s something that needs to be solved so that we don’t continue to experience such a high failure rate of startups.

I’ll give you examples, pulling from my travels in the people/career development realm, where I have spent a great deal of time. We get told that for apps and service platforms that traction is important; even the investors in the Product Hunt article talk about making sure the numbers work. But, there’s more.

Take online hiring platforms. Sure, many companies will tell you that they can’t source enough good talent and they are open to finding new environments to acquire it. Sure, you’ll find users of a particular qualification who are trying to find jobs. You’ll calculate your funnel metrics on how much you’ll spend on marketing and business development and given projected conversion rates you now have a business case and a plausible business plan. Off you go.

And you’ll convince yourself you’re making progress as you add the low-hanging fruit users and companies that are unduly predisposed to trial. You grandfather that growth rate into your projections and feel great about where you’re going. Then you hit a wall. A big one. And you hit it because we are no longer in the early days of LinkedIn or monster.com; the user won’t take the time to register simply because of the novelty of the idea. Now they want a promise because they have alternatives to go along with a litany of others who have tried and failed in the space. These days, most job hunters will only bother to register if they know you have thousands of jobs waiting for them. Similarly, hiring managers will only jump on board in masses if you can prove out that you have thousands of not only qualified but top notch applicants for the roles they have available. It’s a chicken and egg conundrum that you absolutely must see coming and have a plan to work around before you attempt to upload your company. And just because investors and advisors don’t point it out, it doesn’t mean it’s not there.

Another company I talked to was all about creating a hiring platform for diverse candidates, working from the notion that companies should want to have a more diverse slate of employees and that it’s good for them. In addition, there is a critical mass of candidates who wouldn’t mind a fair shake. Excellent. This is indeed an open space in the market and a noble pursuit, one which I’m all for.

But my mind immediately zeroes in to some clear trouble spots that need up-front anticipation or the platform breaks down from the get go. When I went to sign up, I noticed I need to provide very little information. The founder high-fived himself because he adhered to the best practice of simple registration. But my challenge was that I was providing no information about how I am diverse. What I got back was the assertion that we’re all diverse, which in turn led to my question about how, then, was this platform different from any other because we could them claim that monster.com and LinkedIn were all platforms of diverse candidates.

Further, if we did start to profile diversity then we are effectively labeling people, and that comes with a whole companion set of issues, including do diverse candidates want to be labeled as the token left-handed person, or Hispanic or trans….?

My point is, so many business ideas look good on paper but your mind has to readily be able isolate, seek and destroy the pain points that can take you down. Yet, if you listen to investor advice they tell you things like ‘we really look at the people to see if they are smart and committed’; while that’s great n all, no amount of pluck is going to get you past the key issues that will make or break you.

One last example from the same domain for the sake of beating a dead horse. Analytics is a big thing now, so we’re applying it to the hiring space. Companies are popping up with all these proprietary algorithms that can be applied to candidates and their resumes to create barometers of expected success in the hiring company. So ya, that’s a cool valuable B2B prop, to say that matching has become scientific and we can now better predict job performance.

All kinds of ways to make that look good to investors, starting with a competitive advantage. But here’s the big problem…and I ask you to follow through the path of logic. You’ll make money long term if you generate a lot of repeat business from companies since it’s less expensive to generate repeat business than new business…right? OK, so in order to generate repeat business then companies need to be satisfied…right? And in order for them to be satisfied with the hires, they need to perform, yes…..but they also need to stay! And they’ll stay if they like the company. And they’ll like the company if it’s a good match for them. So my question to these business owners is: where’s your algorithm to ensure the company is a great fit for the exceptional candidate? Hmmmm? Exactly.

Because especially among star performers, matching is a two way street. And if you don’t address that issue (which by the way is reeeeeeally hard) you don’t have a sustainable proposition. Your churn rate will be high, and you will forever doing business development at a high cost…until you have exhausted the marketplace and are left with a small core of clients who believe in the product.

These are the issues that lie behind the ideas of ‘traction’ and ‘funnel metrics’ which is where we tend to stop the conversation when validating a business. When I meet founders – and they are out there – who speak in these more insightful terms, I know I’ve got something.

This less sophisticated business mind is also responsible for the varying success rates of founders over the longer term. Ever notice that you have a founder that builds a huge company and then goes on to fail in the next one…or three? And we’re scratching our heads at why they failed. Well, this is sometimes part of the issue – and luck plays a role as well. Maybe they are kick ass UX designers and in company A the critical success factor above all is best in class UX. So they win. Then they start company B and work hard on that UX thing again; only in this company the real challenge is being able to lower the cost of service delivery to make enough margin on the relatively low price the consumer is willing to pay. If your brilliant business mind hasn’t uncovered that issue early, you’ll spiral downwards over time, adding more and more expensive features in a fruitless exercise of trying to justify a price.

The point of this whole section is that there is no one universal factor above all (people, competitive advantage, traction, etc). They all matter…and it’s up to you and your team to identify the bullseye business issue(s) that relate to your specific business at any given moment. That paradigm of thinking is the thread that ties all the great advice together.

( <whew> That was a big one…but worth hammering on…because it’s not talked about enough. The rest are straight forward. )

  1. You have to package it and sell.

This point is one that’s almost parenthetical but is worth mentioning. If you ever talk to smart peeps in PR, they will tell you that in the startup world especially the biggest challenge to driving awareness and traction in media is teaching founders how to talk about their product. Yup, you have to get your messaging right or else you’re wasting your money sharing it to drive your business.

Same goes for generating investment. Same goes for inspiring and creating engagement in your team. You have to have the skill set to communicate clearly and in a universally-relevant way, or you’ll spin your tires.

What goes with the selling process is understanding and sharing the ‘why’ behind what you are doing more than the ‘what’. The ‘why’ of any business, strategy or advice is where the magic is. I have already written separately about this so all I’ll say in this post is that this is where you need to focus the most…because this is what gets people on board.

  1. You have to (be willing to) do what it takes.

I am separating this section from the first because there is a difference between identifying what it would take and then actually doing what is necessary. We see this all the time in our personal lives (‘I’m in this terrible job/relationship but I just can’t take the leap to change my life’) and the same tendencies cause us to huddle in a safer zone in business until we hit crisis mode. An in my experience, as much as we bemoan the conservatism of corporate jocks, I have to say the same obstacles exist in the startup space, at least in Canada.

For this reason I always hated visionary / brainstorming sessions in the corporate world. I have been on a number of exec teams that got pulled into full day off-sites to reimagine the company’s future and get to a new growth plateau. Although on many levels I love such discussions because I’m a dreamer who loves to project years into the future, these events time and time again prove to be fruitless exercises.

Let’s put aside the truth that it’s actually the job and required skill set of a founder or CEO to be years ahead of the marketplace, planning for and selling to the team new business models and sources of revenue. But – heavy sigh – we can’t all be named Zuckerberg or Brin.

The big remaining issue is that either consciously or subconsciously, founders have parameters to their thinking, and they eventually become apparent. Many are just plain indecisive. Some are just not risk takers. Some are too lazy to invest themselves in the work required to reboot a company. And with founders, especially, there is a reluctance to pivot, to find that non-linear path to achieving their dreams in the marketplace, some of which being quite personal.

Let’s return to hiring platforms. The updated model today should be to build a community of verified users around a companion topic or need. This platform needs to be useful at any scale; meaning, there is possible utility to all even with 100 people in the platform….or else you’ll have trouble gaining traction unless you do it on one big swipe using a Super Bowl ad (the early 2000s model). Once you have built your community of appropriate scale you can look to monetize through the many vehicles, one of which being to become B2B, charging companies to access your community pool to advertise or hire.

But those pivots are seen as daunting more than inspiring. It’s deflating to come to the realization that your dreams of early monetization must be sacrificed in favor of a multi-step growth platform that will only see monetization in the far distance. And so these sensible strategies become our last ditch option to the ultimate detriment of a company that is more likely to burn through all its cash and collapse rather than make the move.

Founders have egos, too. Many young professionals become intoxicated by the impression they see themselves making on society. Feasibility, as a result, becomes a secondary notion which in turn creates barriers to reinventing your company in the marketplace. I have seen companies disappear from the market simply because of this sort of dynamic. As a founder, you must be decisive and have a bias for action. You simply must do…and you must let go.

__________________________________

Now I challenge you to go back to the advice you have received or read. And consider my point of view. These are the lowest common denominators that connect the relevant but differing perspective out there from smart and experienced people.

Becoming successful as a founder does not stop with the opinions and advice of others. These nuggets of wisdom are merely ingredients. The formula for success lies with you – your ability to synthesize it, sort it, customize it and deploy it. It lies in your ability to master a complex marketplace to truly understand what it will take above all, how to express it, and then go do it.

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