By Tom Fedro
It’s amazing how crazy the world of startup development can sometimes get. I think about it sometimes. We live our lives trying desperately to create something so that we…well, so that we can begin living our lives. I think about it often. Are we putting the cart before the horse? Are we counting our chickens before they hatch? One of the advantages of this new economy is that we can tailor our world, in an entrepreneurial sense, to the life we want. We spend so much time working for our future that we forget we have choices in the meantime.
I’m a fan of Michael Wolfe. He describes himself as a serial entrepreneur and has had tremendous success building businesses over the past 15 years with several highly profitable exits. What I find amazing is his ability to manage living a life with building companies. He wrote an interesting blog piece about staying in shape while working long hours and has for a long time maintained that while a startup will consume a great deal of your life, it ought not consume all of your life.
It’s not really all that out of the box in terms of philosophy. In fact, the term workaholic was created as a kind of a warning in this area. However, we in the world of entrepreneurialism tend to idolize the men and women who work nineteen hour days every day and watch their relationships, their health, and their social lives disappear in the process. Add to that mix the fact than almost every startup fails. This advice comes from a man who’s successfully built five.
This Wolfe guy competes in Triathlons at world class times, Ultra-distance running, Biking etc…Okay, so are we looking at a man who’s already achieved the success that allows him to live? I don’t believe so. From the outset, Wolfe suggested the key to a startup wasn’t sacrificing your life but designing the business around the life you want to lead. His advice? “Pick where you want to live and the people you want to hang out with first. Then find a career that lets you do that.” Very good advice and his thoughts on working out in the morning to make sure you are consistent – I am now a believer!
How are you balancing your life with your dream?
By Tom Fedro
What? Can I really write this post? I’m all about business and startups and suggest that the driving force of a multitude of entrepreneurs isn’t as important as every other blog on this subject suggests? What of all the stories? What of all the movies? What about all the inspirational books and the men and women just about to give up but hanging on because they accessed deep within themselves that last vestige of hope and passion that kept them motivated against all odds.
It makes for good storytelling, but I have to tell you that I’ve been in more than one startup. I’ve advised in more than one startup, and I’ve seen countless pitches from founders. I’ve spent my career focusing on startups. I’ve yet to find a single founder of a startup who wasn’t consumed by passion. Why in the world would anyone put in the kind of effort and sacrifice necessary to start a new venture if there wasn’t passion? Everyone has it. Everyone in this arena, anyway.
The bottom line is this. According to studies (and there seem to be a million of them) the failure rate for startups is staggering. Low estimates put it at about eighty percent, some suggest the rate is ninety-two percent. That means your brilliant new business has about an eight percent chance of success, no matter how passionate you are. In fact, there’s a good chance your passion, if not reined in, will be your undoing.
The Genome Project’s study of 3200 startups concluded that the number one reason for failure is self-destruction, primarily through premature scaling. In other words, passion makes us grow too quickly and get ahead of ourselves. Things get crazy and our dreams become nightmares. Our incredible idea is so incredible that we implement it faster than it can actually succeed, and the net result is failure.
I’m not suggesting passion isn’t important. I’m just trying to tell you that everyone attempting to start a business probably already has it. Don’t work on motivating yourself in this area. Don’t focus on the passion, focus on the business. Make good, fundamental business decisions. Those are the decisions that may seem dispassionate or even appear to show a lack of confidence in the idea about which you’re so passionate. Don’t worry about that. You worry about whether or not you’ll be one the eight percent that make it.
By Tom Fedro
For as long as there’s been business enterprise, there’s been a NEXT BIG THING. Entrepreneurs do everything they can to figure it out and monetize it, people do everything they can in their particular industry to predict it, and the media does everything they can to promote it. We can see it very clearly in music, with a new “The Next Beatles” every five years or so. Well, The New Kids on the Block didn’t have the staying power of the Fab Four, and it’s a pretty good bet the next big NEXT BIG THING in technology won’t have the staying power either.
There are a few reasons for that. First of all, technology is moving so fast that predicting the next big thing is really looking backward. By the time we recognize something as the NEXT BIG THING, it’s already the CURRENT BIG THING. More importantly, technology is so often driven by the desire to see if functionality is possible that far too rarely is serious thought given to whether what’s possible will be valuable or competitive. Some of the most cutting edge technology ever developed never caught hold, and there are plenty of geniuses who’ll never be recognized. Why is that?
Frankly, I think too many people search for the NEXT BIG THING and forget THE MAIN THING. In a previous post I warned you about something similar. I told you it’s bad to confuse activity with productivity. Now, to me, business fundamentals are in play no matter what kind of a “game changer” is involved. See, we tend to believe that game changers change the rules, and they really don’t. They change our ability to excel at the game, if they’re effective. High jumpers jump backwards now. Cyclists have specially designed equipment. A baseball glove from 2013 looks very different than one from 1898. The game is still about getting higher, getting faster, and catching more balls.
The game of business is still ruled by fundamentals, and the success of the NEXT BEST THING is going to be based entirely upon those fundamentals. It’s supply. It’s demand. It’s recognizing or creating a need and capitalizing on that need. It’s not about writing code or creating for the sake of creation. When it comes to technology, the next thing is only best when it’s based on sound business principles.
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.