Archive for Entrepreneurism

Activity does not always equal Accomplishment

Never confuse Activty 
By Tom Fedro
 
John Wooden, the greatest basketball coach of all time, said it best, “Never confuse Activity with Accomplishment.” One of the most difficult aspects of managing a start-up company is dealing with the excitement level of the new venture and essentially reining in the tendency to believe that constant activity for activity’s sake is critical at all times. 18 years ago, led by an almost euphoric market and the ability to tack “dot com” at the end of anything, one could watch stock prices soar as investment capital flew in and companies filled giant break rooms with ping pong tables, arcades, snack bars, and more. Everything was exciting and fun, but in many cases the activity wasn’t anything approaching good business. (This isn’t to say that amenities for employees can’t help attract and keep good staff, it just illustrates the frenetic pace of business in emerging markets.) A few years later, the tech “bubble” imploded, and the net result was a great loss of shareholder value, layoffs, and paper millionaires realizing they had non-paper debts.

Technology itself has enabled a single person to create a great deal. In the time it takes me to write and post these words, I will likely have also checked my email, sent correspondence via instant messaging, and arranged travel for a business conference. If the average businessperson accurately listed the tasks undergone in a particular day, the results would be surprising. At first glance, the sheer number of items completed will tend to create a sense of accomplishment. Who wouldn’t be proud of checking off thirty or forty items on a list? Dig a little deeper, though. Take a look at the tasks and determine which of them actually resulted in a benefit to the company? How many of them helped to fill a day but really meant less to the success of the venture than the time spent with them?

Now, multiply that activity by the number of employees working for you. There are certainly hundreds of activities happening every day that likely don’t offer anything in the way of accomplishment. This doesn’t mean your employees are bad or shirking duties. They probably go to bed at night just as tired and just as overworked as you do. It does mean, however, that every employee ought to learn what tasks impact the company. For example, I have known salespersons who spend hours “preparing” to make phone calls and others who stay on the phone constantly but somehow can’t consistently close business. I’ve known programmers who can write beautiful code but spend their time on features that have little benefit. Ultimately, it’s the responsibility of management to take the best efforts of the employees and ensure that they are directed properly for maximum effect, to turn the activity into real accomplishment.

How much of what your company does is just activity?

The Value of Minor Failure

Value of Failure Oops

By Tom Fedro

Innovation is risky business.  Perhaps a better way to phrase it would be, “Innovation is messy.”  We come up with theoretical ideas we believe are brilliant and hold onto them, doing everything we can to transform the world until our brilliant idea is the standard.  Far too many of us hold to our idea no matter what the market or the industry tells us in response.

Mark Otero, the co-founder of KlickNation had a different idea.  He quit his job, cashed in on his retirement, sold his house, and opened a yogurt shop.  The frozen yogurt kept him alive while every dime of profit and every spare moment went into programming mobile game aps.  It seemed to do well for a while, but after thirty products and shrinking revenues, he had to change tack altogether. So, after thirty games that didn’t take off, he made game number thirty-one, this time for facebook.

By the end of 2009, Superhero City pulled in $5000 per day and KlickNation was an unmitigated success.  Then came a multimillion dollar deal with NBC Universal.  After that, a $35 million dollar sale to Electronic Arts.  Now, he heads up EA’s BioWare Social division.

What strikes me as truly brilliant is the way Otero responded to failure with adjustment and business plan modification.  He said in a presentation to the alumni department of his alma mater, UC Davis, “When you have thirty failures, you are either a madman or you are onto something.”  Is it any wonder, with that attitude, that he’s succeeded?

The idea of learning from failure isn’t new, but almost all that’s written on the subject focuses on catastrophic failures from which a battered entrepreneur pulls himself up to brush off his clothes and face another day with dreams intact.  Otero’s measured approach to regular postulating, testing, adjusting, and starting all over again isn’t about overcoming obstacles.  It’s about good business.  I recently wrote a post about my faith in the Shewhart Cycle and the impact of hypothesis testing in business.  Perhaps there’s no clearer example of a technology startup that followed that path to success than KlickNation.

What are you doing?  Are you actively testing assumptions and learning from minor failures?  Are you putting any of your assumptions to the test at all?  Do repeated failures crush your spirit or do they drive you to create new assumptions, new tests, and new paths?

Nobel Prize Winning Advice

Nobel Prize

William Faulkner, recipient of the Nobel Prize for Literature said this when interviewed by the Paris Review:

Let the writer take up surgery or bricklaying if he is interested in technique. There is no mechanical way to get the writing done, no shortcut. The young writer would be a fool to follow a theory. Teach yourself by your own mistakes; people learn only by error. The good artist believes that nobody is good enough to give him advice. He has supreme vanity. No matter how much he admires the old writer, he wants to beat him.

It’s interesting to look at a quote from William Faulkner and think about it in terms of technology startups, but bear with me a moment.  I’ve been involved in multiple startups, and the one thing never lacking is advice.  I should rephrase that.  The one thing never lacking is advice filled with criticism and warning.  The business sections of bookstores are filled with it and filled with “revolutionary” solutions to every problem and issue one could face in business.

Before you get ready to leave me angry comments that we’re not writers in the technology startup world, I recognize that.  However, I think there are parallels that can be drawn.  I really want to focus on the part that begins with “Teach yourself…”  I think the one quality I find in all successful entrepreneurs is an absolute refusal to believe in the possibility of ultimate failure.  They recognize there will be minor failures along the way, but they refuse to believe those minor failures indicate the overall failure of the concept or the plan.  On the contrary, their mistakes are worn like a badge commemorating experiences that will lead to eventual success.

I’m not against receiving or asking for advice, and I think that’s probably the difference between being a writer and a businessman, but I have to confess to that supreme vanity Faulkner discusses.  What is more vain than believing you can take a business concept and turn it into profit?  What is more vain than believing your product can revolutionize an industry?  What is more vain than believing your grand plan will succeed where thousands before you have failed?

I suppose what it comes down to is one simple fact.  Entrepreneurialism requires at its very core a bit of a willful (to use a literary term) suspension of disbelief.  We take our doubts and those expressed by others  and drive them deep below the surface.  Sure, they’re there, but we act as though they aren’t and drive forward to make our dreams reality.

Business Intangibles

By Tom Fedro
 

When you’ve spent a great deal of your life attempting to create value in the technology world, you tend to get an interesting perspective on life. Over the last forty years or so, the computer revolution has moved from “wouldn’t it be cool if…” to “developing solutions for integrated operational support.” The industry has matured from scattered groups of tech-savvy dreamers to operations-savvy businesspersons. This marriage of technology and management would have been useful in the late nineties when it seemed like labeling a company with the word “tech” brought visions of multi-millionaire investors and soaring stocks. Innovation without business perspective, though, is ultimately a recipe for failure, and success or failure in technology falls squarely on the business fundamentals side of the equation.

This isn’t to say that the technology lacks importance. I’ve made a career out of constant attention to development and innovation. You’re not going to find a more committed advocate for technology advancement than me. The problem is that those of us who focus on technology tend to do so at the exclusion of all else. How many times have you seen a techie rush into your office singing the praises of some new feature or functionality that really has no business impact at all? Excitement exists for the technological advancement rather than the value of the enhancement. A feature that isn’t used is wasted code, but how often does the real business implication of our work get lost in the challenge. We’re so busy trying to find out if we can do something that we forget to determine why we should do it in the first place.

You see it in more than the technology sector. Automotive elements, as seen on TV’s latest fix, and even the food industry flavors of the month all come and go. Technology, though, seems uniquely geared toward activity rather than action, toward busy-ness rather than business. Strangely, we can interview stakeholders to pull together a deep needs analysis. We can create elaborate and extensive flow charts and mind maps to drive software development. We can be remarkably organized while focusing on our immediate objectives. Why then do technology companies tend to dismiss the business issues we claim we’re here to enhance?

Ultimately, it’s too easy to fall into the failed thinking that suggests a product is the goal in and of itself. If you believe that your technology is the end and not the means to an end, you’re on dangerous ground. I’ve seen start-up after start-up that didn’t get past that initial stage. For the most part, the technology involved was interesting, even conceptually brilliant. However, the relationship of the technology to the business was lacking. It’s not surprising really. Too many companies create products for the IT Department instead of for the whole enterprise, and some don’t even do that well. If you’re in the technology world, are you minding your business?