Both engineering and entrepreneurship alternate exploration and verification cycles to develop a solution that satisfies a customer’s need. Both of these rely on the scientific method of “observation, hypothesis formation, prediction, and experimentation” to develop and validate testable theories, engineering solutions, and profitable products. Both require that a new configuration or an opportunity be recognized as distinct and worthy of experimentation/validation efforts and that you understand if you have satisfied or failed to satisfy each constraint or requirement. This is the basis for “I will know it when I see it.”
Athol Foden of Brighter Naming is our guest speaker Friday May 8 for the Bootstrapper Breakfast™ at 7:30am at the Omega Restaurant in Milpitas. Athol has over 16 years of experience helping clients name companies, products, services, and taglines. Athol’s opening remarks will be followed by a question and answer session on developing the right name.
His website has a number of excellent articles on name generators, characteristics of good names, and naming biases and influences. His “Top 10 Characteristics of Good Name” is an excellent place to start. Brighter Naming offers a jump start program for early stage startups that takes into account their limited resources and need to move quickly, it’s worth contacting them. They also offer a self-service approach that you can follow if you need a good methodology.
The Omega Restaurant is at 90 S. Park Victoria Milpitas, CA, 95035. Turn to the right after you walk in, we are in the back room. To RSVP for the event sign up here: https://www.123signup.com/register?id=zdgrx We start promptly at 7:30am.
- Dec-15-08 “Last Full Work Week of 2008”
If you are stuck trying to pick a name we suggest you contact Athol Foden at Brighter Naming, his team has a clear process that’s startup friendly outlined on his website. You can pick which steps you would like assistance on and which you want to do on your own.
- Dec-7-2007 “One Name or Two for Product and Company”
Your startup is in competition for prospects’ awareness and attention. The reality for bootstrappers is that you do not have a lot of resources available to enter their awareness much less gain their attention. It’s twice as expensive to teach people two names instead of one…and to do name searches / trademark searches for two names. Pick one name for both the company and the product service. You can always rename the company or add a second product name later, but establishing the name in the prospect’s mind takes an enormous amount of effort: don’t double your workload. Also, finding one good name and agreeing on it is a challenge, finding two that are somewhat related and both acceptable is much much harder.
- Nov-30-2007 “If You Think You Have a Great Name, Think Again” an interview with Athol includes this exchange:
Q: What do you think is more important, a name or a logo?
In retail, a logo (or even more importantly a color scheme) are the most important when you are selling “off the shelf” via packaged goods. For items where the logo cannot be seen, for example fashion clothing, the name recognition is more important. In high tech, when selling via the internet or phone, the name is more important. In some cases, the icon (mini logo) may be also very important e.g. embedded in a website, cell phone, etc.
Cecily Drucker, CEO and Founder of Bottom Line Time–and daughter of the late Peter Drucker–has a good post up on the “What Would Dad Say” blog entitled “Secrets of a 64 year old Startup Virgin” that lists fourteen startup secrets she has learned with her first startup. She has a few more insights in her introduction (emphasis added)
After thinking some more about yesterday’s post on entrepreneurial motivation I thought I would re-read some Peter Drucker, his clarity and prescience continue to impress me. All of these quotes are from Chapter 6 “What is a Business” in “Management: Tasks, Responsibilities, and Practices” a book written in 1974 that anticipates many of the tenets of lean innovation.
There is only one definition of business purpose: to create a customer.
It is the customer who determines what a business is. It is the customer alone whose willingness to pay for a good or for a service converts economic resources into wealth, things into goods.
The typical engineering definition of quality is something that is hard to do, is complicated, and costs a lot of money! But that isn’t quality; it’s incompetence.
What the customer thinks he is buying, what he considers value, is decisive–it determines what a business is, what it produces, and whether it will prosper. And what the customer buys and considers value is never a product. It is always utility, that is, what a product or service does for him.
Profit is not the explanation, cause, or rationale of business behavior and business decisions, but rather the test of their validity. If archangels instead of businessmen sat in directors’ chairs, they would still have to be concerned with profitability, despite their total lack of personal interest in making profits.
A company can make a social contribution only if it is highly profitable.
Managers must convert society’s needs into opportunities for profitable business. That, too, is a definition of innovation.
Many times I think that I have a new insight I will come across is re-reading a book by Drucker from twenty or thirty or in this case, forty years ago. I have blogged about Drucker many times, here are few:
- Peter Drucker On Why Entrepreneurs Reject Unexpected Success<
- Three Great Books On Generating Innovative Business Ideas
- Entrepreneurs Need a Community of Practice, Not a Movement
His daughter, Cecily, is an entrepreneur. She offered some great insights on the realities of a startup in Cecily Drucker’s Startup Secrets
- Nov-17: the last full week before Thanksgiving, if you are trying to close business it can get much harder between Thanksgiving and New Years Day [Full Week]
- Nov-24: a half week at best. [Half-Week]
- Dec-1: normally a good week [Full Week]
- Dec-8: normally a good week [Full Week]
- Dec-15: unless you are chasing end of year budget can be very slow [Half-Week]
- Dec-22: normally a good time to reconnect with friends and family [Full Week for hermits]
- Dec-29: last chance to file paperwork with a 2008 deadline [Half-Week; Full Week actually but halfway through it you are in 2009]
Some logistics issues you should take care of now instead of early 2009:
- If this is your first year in business get your accounting system (in most cases in the US this will be QuickBooks) in order now, schedule a meeting with your accountant (or interview candidates and select one) before December 15. If you are based in Silicon Valley we are huge fans of Ogden Lilly.
- If you are not chasing active opportunities the first two weeks in a December this can be a good time to sit down for a recap of 2008 and some planning for 2009. You may want to do the recap the week of Dec-1 or Dec-8 and the planning the week of Dec-29.
- If you’ve been working on a startup but haven’t incorporated yet, you may want to get all of your paperwork in order but postpone filing until the first week in January, in some states this will save you paying 2008 annual fees for a few weeks of operation in December and then 2009 annual fees. We like to see teams incorporate sooner rather than later if only because it gives you a vehicle to do business with that’s better than a collection of sole proprietorships.
We will have our normal Bootstrappers Breakfasts in December, RSVP now we would be delighted to see you. If you’ve been meaning to come for a while, find time in December and see if it’s something you want to make a habit in 2009
- Friday December 5th at 7:30am at Hobee’s in Palo Alto
- Friday December 12th at 7:30am at Omega Restaurant in Milpitas
- Tuesday December 16 at 7:30am at Cocos in Sunnyvale
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.
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.
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.”
Entire books have been devoted to Crossing the Chasm, but I wanted to make sure we were both talking about the same thing.
“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.
Related Blog Posts
- Doug Merritt’s “Laws of Cartoon Physics” has as it’s first law: Any body suspended in space will remain in space until made aware of its situation.Daffy Duck steps off a cliff, expecting further pastureland. He loiters in midair, soliloquizing flippantly, until he chances to look down. At this point, the familiar principle of 32 feet per second per second takes over.
- Wikipedia Cartoon Physics
- Things I Have Learned from My Children
- The Likely Consequences of Entrepreneurship Require Perseverance
- Purpose, Patience, Politeness, and Prudent Risk Taking
- Cultivating Calmness in a Crisis
Gumption is the ability to continue to try new things with confidence, in spite of past failures. Entrepreneurs need this to debug problems and build things that don’t exist–yet.
Entrepreneurs Have Confidence, Inspire Teamwork, Plan for Iteration, and Focus on Impact
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.
Zen and The Art of Motorcycle Maintenance on the Value of Gumption
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.
Related Blog Posts
This article compares Paul Graham’s “Six Principles for Making New Things” with Bob Bemer’s “Do Something Small But Useful Now”, Gary Hamel’s Innovation Hacker, and Peter Drucker’s list of seven places to search systematically for opportunities.
Here are the social networks I participate in. I find them a good source for practical advice for running my business.
- LinkedIn www.linkedin.com
- Intuit’s Jumpup www.jumpup.com
- Bank of America Small Business http://smallbusinessonlinecommunity.bankofamerica.com
- Bootstrappers Breakfast www.bootstrappersbreakfast.com
Check me out, my screen name is tshafer.
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.