Archive for Entrepreneurism

The Most Important Entrepreneurial Choices

Entrepreneur

I’ve read a great deal about entrepreneurs, and almost everything focuses on that “aha” moment when an idea came to someone and how it then became the driving force that created, changed, revolutionized, or otherwise altered a business segment forever.  With all the press this moments gets, the focus on the incredible stroke of genius, it’s natural to assume that the make it or break event in any start up comes with that first thought conception.  I’m not so sure.  Okay, that was me being polite.  I have stronger feelings. I’ll admit it.  I’m actually pretty sure that moment is the least of the three most important decisions you can make in a startup.

I’m not suggesting the moment isn’t necessary, just that there are thousands (maybe millions) of brilliant business ideas that never result in a successful company, never change the world, and never alter a business segment at all.  History is filled with brilliant ideas that never got to the market.  Without the idea, the company can’t exist, but even with the idea there’s just no guarantee the company will succeed.  I believe there are three critical choices, and the idea, while critical, isn’t as defining as the first two.

To create any startup, you’ll need to find investors and find partners.  You’re stuck with those two decisions.  A concept will (and should) adjust as market and production realities impact decision-making.  If you have the wrong investors or the wrong partners, the brilliant dream becomes a nightmare.  If you secure too little capital or too few human resources, the brilliant dream fades.  The idea is important, and it will likely drive your company culture and attitude, but without good decision-making when it comes to the first two decisions, the idea joins the other unrealized dreams in the annals of history.

How about you?  Are you looking for the right investors or just any?  Are you seeking warm bodies or are you actively seeking partners whose strengths will help support your weaknesses?

Does it seem like I’m telling you not to focus on your core business?  That’s not my intention at all.  Hang on to your idea.  However, in a business environment where most technology startups are going to fail, don’t let your aha moment go to waste.  Choose your investors carefully.  Choose your partners carefully.

Unread Volumes

Library pic

By Tom Fedro

The other day, I ended up browsing the internet and focused a bit on library closures.  I’m really just struck by the similarities between our libraries in the United States and the whole concept of data management.  Of course, I have opinions about public libraries and the services they provide, and I have many memories about my experiences within them.  (They even go deeper than being told to “hush!”)  The current state of libraries in our world, though, has some clear similarities to how data is managed, and I thought I’d write a bit about it.

Really, libraries are closing because they’re unused.  I realize that’s a gross generalization, and I realize that they offer critical help to many in our country who are without internet connections and have no ready access to information.  I get all that.  That may be enough of a reason to keep a library open.  I’m just struck by how much data a company has that’s unused.  The typical sales enterprise, for example, can draw from a database critical metrics and yet it doesn’t.

Do a quick Google search for “Important Sales Metrics” and you get varied results, but the problem I have is that the metrics everyone claims are important are almost always results-based metrics.  Time from suspect to prospect.  Time from prospect to lead.  Time from lead to qualified.  Proposals vs. closes.  Sure, these statistics tell us something, but in my mind, metrics ought to be process-based.  We ought to look at what our sales department does (I mean the actual actions) and how they impact sales.  Realistically, if your standard sales reports show you a problem, you can’t take real action without an objective, data-driven analysis of the actions providing the results.

The problem for me is that the data is in there, unused like countless of volumes at your local library.  Almost all CRM software has the capability to record actions, but the data is almost always unused or left only in the hands of the salesperson.  Realistically, wouldn’t you want to know that initial follow-up by email resulted in 12% higher sales than a phone call and resulting message?  Wouldn’t you want to know the reverse?  Doesn’t it make sense to discover the most successful salespeople in your organization do something different and duplicable? You can exhort your sales people to do better, but exhorting them without direction is ludicrous, and when you have an entire sales force, measuring their results isn’t the same as measuring their performance.  Results come from performance, and performance is the obligation of management to…well, to manage.  Why aren’t we looking at that data?

If we were, do you think we’d be catching on to the changing company-marketing-sales-customer dynamic a bit better?  There’s a great deal of information to be mined, but as long as we’re looking at the same queries and the same reports we used twenty-five years ago; that data is just a library sadly on its way to closure.

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?

When It’s Time for No

No

By Tom Fedro

I can remember working through the process of creating filings in order to take a startup public, and we were well on our way to making it happen only to have things change at the last moment and end up taking an acquisition offer as our way to liquidity and value to our shareholders.  I remember making my first OEM deal with a major PC manufacturer.  Those were (and still are) exciting times.  Something happens along the way, though.  When we started to succeed, we were now being pursued by the money as opposed to the other way around.

If you’re in the midst of starting your venture, or if you’ve been through the process; you already know what an exciting and yet desperate time it is.  Conferences, meetings, speaking engagements, marketing partnerships of tenuous value, and activity—a ton of activity—and it’s really somewhat of a scattergun approach.  All of this activity is designed to expose you to investment and to create buzz, and the hope is that something will come from it all.  If it doesn’t cost a fortune to attend (and sometimes even when it does) you’ll be there.  Some startups never make it past this stage.  Investment money doesn’t come in fast enough or the business just doesn’t take off.

I’m convinced some startups should be past this stage but just can’t break free of it.  If things go as you hope, there will come a time when the value of the exposure activity and the frenetic pace of presentations, conferences, and endless cash-less marketing meetings will be worth far less than the effort expended.  You may react differently, but when that time came, I was confused and unable to immediately recognize it. I didn’t say “No” enough.

Where are you in the development of your company, and are you behaving like you’re still a few steps back?