November 9th, 2008
Some thoughts on aspiring to “overnight success.”
- If you define success as making a lot of money quickly you should go into sales and cut out the middleman.
- You can buy one lottery ticket and make a lot of money. You can buy many lottery tickets every day of your life and never recover the cost of your lottery tickets.
- Most of the time the opportunity for “overnight success” is sold by folks who are interested in making a profit on your dreams without actually fulfilling them.
- Of all the sources of funds for an early stage venture, revenue is the most compelling demonstration of traction. Too many entrepreneurs view fund raising as an accomplishment in and of itself.
I think a lot of the desire for overnight success (beyond the lure of easy money, which has a very strong appeal) is driven by trade press accounts of young millionaires who clean up the real story to make it seem simple and inevitable. I have met a number of entrepreneurs who think that one deal or one relationship will be the point of departure for a rocket trip to the stars. That’s always the way the success narrative is cleaned up and presented, but the reality almost always–barring a few lottery ticket winners–involved a lot more hard work and the slow accumulation of many small insights, decisions, and advantages.
I think it’s unfortunate but a lot of what’s written about Silicon Valley entrepreneurship is actually part of a sales pitch or positioning for the venture ecosystem. There is a lot of advice that’s designed to encourage the entrepreneur to start negotiations with an attorney or a VC in a very poor position. The Venture Hacks blog is a notable counter example: their posts on term sheet negotiations are delightfully practical and lately they have provided some excellent advice on bootstrapping and customer development. But many articles and blog posts are designed to convince an entrepreneur to seek early validation from a VC firm instead of a customer, or lately to take a worse deal because “Good Times RIP” (or maybe not.)
Not everything is sanitized hagiography of the founders (or current management) and there are some good entrepreneurial methodologies documented in books like “You Need to Be a Little Crazy” and “Four Steps to the Epiphany” (see the list of books in “Crucial Marketing Concepts” for example). But any of these books are ultimately as useful as reading a math textbook or a book of chess proverbs, or memorizing a set of Go joseki. It’s always valuable to understand the principles, and certainly for challenges in an idealized problem domain like Math or Go you can learn a lot from a formula or a proverb.
But many insights in life cannot be reduced to writing, especially those involving either self-mastery or other people (and startups, alas, involve both). Reading the history of an event does not compare with living through it. You cannot learn to ride a book from a book (or a workshop). Patient experimentation, deliberate practice, and not only rehearsal and pre-mortem but also after action and decision record reviews are all needed.
The challenge with a startup–like many other things in life–is that you need to integrate many different inputs, your own hopes and fears among them, and negotiate a working consensus with your co-founders to be successful.
And that doesn’t happen overnight.
Update: Eric Ries posted a good description of the Customer Development Model yesterday that I didn’t read until after I had posted this. It’s a good overview of some of the key points from Steve Blank’s Four Steps to the Epiphany.
August 20th, 2008
Robert May concludes his post on “Entrepreneurship: Don’t Drink the Kool-Aid” with the following
If you want to be an entrepreneur, stop believing that ideas matter. That isn’t what entrepreneurship is about. Entrepreneurs aren’t idea people, everybody and their brother has ideas. Entrepreneurs are people that exploit ideas by matching them to market needs, executing them despite scarce resources and designing a business model that makes the idea profitable.
If you want to be an entrepreneur, stop waiting. Start doing something. That is how you learn. Make entrepreneurship your hobby, until you can make it your career.
This is a very common situation for folks with an inventive or entrepreneurial frame of mind (note that the two are different). A couple of suggestions if you are a “geyser of ideas” (as Adrian Monk says “it’s a blessing…and a curse”):
- Write them down and flesh them out to at least a paragraph or two.
- Focus on who the customer is and the pain that you are alleviating.
- Keep them sorted by your desire to work on them.
- Share the top 10-20% in face to face and small conversations, see if you get any interest.
- Give the rest of the ideas away (e.g. blog about them, post them) in such a way that people can contact you if they are interested. Don’t worry, next month you will have more ideas. And next year even more.
August 5th, 2008
My younger son and I were walking across the field to soccer practice over the weekend when he told me “Papa, I know why cartoon characters are able to walk across the chasm without falling.”
“You mean walk off a cliff, walk on air without falling, and get to the other side?” I asked.
“Yes! Do you know how they do it?” he said, barely able to avoid giving me the truth before I gave my answer.
“How?” You have to be the straight man.
“They don’t look down!”
And because I spend most of my time in an entrepreneurial frame of reference I thought, what a great metaphor for most start-ups. If they knew how hard it would actually be and what the odds were, fewer would attempt it. Many succeed by focusing on the goal, not the risks.
August 4th, 2008
We’ve recently gone through a mid-year re-planning exercise and one of the questions we asked ourselves was what were some key characteristics of the successful teams that we have had the good fortune to work with over the last five years. We came up with a short list as it related to how they approached bootstrapping.
- They believe that they can create something of value. They proceed with a quiet confidence.
- They are part of a team because they value effective collaboration and believe that they can accomplish more in the team they are in than on their own.
- They don’t assume that a new initiative or product will succeed on the first try, so they plan for iterations. This means spending a small amount of time planning, keeping careful notes and/or developing a checklist or two, and updating them in response to new failures.
- They don’t keep trying the same thing if it didn’t work, they make small changes and see if they have an impact.
This is not a horoscope, here are some examples of the opposites:
- Most people that want to make a lot of money in a hurry, don’t.
- If you are committed to succeeding entirely on your own you probably won’t. As one of our clients remarked “it takes a village to raise a start-up, I am calling in favors and asking so many folks for help and advice that I would never have anticipated reaching out to.”
- Most entrepreneurs who stake everything on a new business idea working perfectly, keeping no funds or mental energy in reserve, don’t have the ability to maneuver around obstacles or recover from errors.
- If you take the same product/idea/demo to two or three dozen people and nobody gets it, there may not be smarter prospects. It’s probably your product, your presentation, or your idea of who should be interested that need adjustment.
Obviously there are many other factors, but as I reflected on our list, I realized that the successful entrepreneurs had gumption, which is a mix of initiative, resourcefulness, and common sense.
Robert Pirsig devotes chapter 26 of “Zen and the Art of Motorcycle Maintenance” to a discussion of gumption. I re-read this chapter over the weekend and found some excerpts that are particularly on point (links added):
I like the word “gumption” because it’s so homely and so forlorn and so out of style it looks as if it needs a friend and isn’t likely to reject anyone who comes along. It’s an old Scottish word, once used a lot by pioneers, but which, like “kin,” seems to have all but dropped out of use. I like it also because it describes exactly what happens to someone who connects with Quality. He gets filled with gumption.The Greeks called it enthousiasmos, the root of “enthusiasm.” which means literally “filled with theos,” or God, or Quality. See how that fits?
A person filled with gumption doesn’t sit around dissipating and stewing about things. He’s at the front of the train of his own awareness, watching to see what’s up the track and meeting it when it comes. That’s gumption.
[..]
The gumption-filling process occurs when one is quiet long enough to see and hear and feel the real universe, not just one’s own stale opinions about it. But it’s nothing exotic. That’s why I like the word.
You see it often in people who return from long, quiet fishing trips. Often they’re a little defensive about having put so much time to “no account” because there’s no intellectual justification for what they’ve been doing. But the returned fisherman usually has a peculiar abundance of gumption, usually for the very same things he was sick to death of a few weeks before. He hasn’t been wasting time. It’s only our limited cultural viewpoint that makes it seem so.
If you’re going to repair a motorcycle, an adequate supply of gumption is the first and most important tool. If you haven’t got that you might as well gather up all the other tools and put them away, because they won’t do you any good.
Gumption is the psychic gasoline that keeps the whole thing going. If you haven’t got it there’s no way the motorcycle can possibly be fixed. But if you have got it and know how to keep it there’s absolutely no way in this whole world that motorcycle can keep from getting fixed. It’s bound to happen. Therefore the thing that must be monitored at all times and preserved before anything else is the gumption.
Robert Pirsig outlines several techniques for maintaining gumption in the balance of the chapter. I took away three key habits appropriate for entrepreneurs:
- Keep a careful log of decisions.
- Avoid premature diagnosis: continue to correlate all of the facts against whatever hypothesis you are relying on.
- Re-evaluate priorities based on events and new information
He gives a memorable description of the “South Indian Monkey Trap” that’s worth adding to your “perhaps I have mis-assessed” checklist:
[T]he most striking example of value rigidity I can think of is the old South Indian Monkey Trap, which depends on value rigidity for its effectiveness. The trap consists of a hollowed-out coconut chained to a stake. The coconut has some rice inside which can be grabbed through a small hole. The hole is big enough so that the monkey’s hand can go in, but too small for his fist with rice in it to come out. The monkey reaches in and is suddenly trapped…by nothing more than his own value rigidity. He can’t revalue the rice. He cannot see that freedom without rice is more valuable than capture with it. The villagers are coming to get him and take him away. They’re coming closer—closer! — now!
Can you let go of what you have to allow yourself the freedom to become what you want to be?
That takes gumption as well I suppose.
June 17th, 2007
You can’t go wrong with Ogden Lilly at Boitano Sargent and Lilly. Odgen has done my taxes on the business side for more than a dozen years and helped on the personal side for some complicated returns. I have referred a number of folks to him over the years and always had good results, even when they were facing serious issues in an audit due to prior mistakes or poor practice.
408-287-2123 ogden@bslcpa.com www.bslcpa.com