Lessons I Learned Today 7/2/09 – Did Entrepreneurship Kill Michael Jackson and Elvis?

This is a digest and recap of highlights, quotes, and comments from articles and discussions posted on this date on the Applied Entrepreneurship, LinkedIn group site.

 

*A process to test a startup idea by Brian Courtney 

I’ve redone this post to pull out the workshop methodology from how I hope to use that methodology in figuring out what to do in my next startup. To summarize the workshop process, we use five steps to align business users and software developers:” 

• Define the idea
• Determine the business case for doing it
• Create alignment around it
• Define an implementation plan to execute it
• Get executive buy-in to fund it

 

*Attrition – Early warning signs for a startup by Brian Courtney

The article highlights some of the challenges of trying to run a startup with 95% of the resources on one continent and the majority of the senior executive team on another. The author was responsible for US operations for an IT services startup out in India and noticed that quality was becoming a problem. The root cause seemed to point to excessive attrition rates, which had spiraled out of control.

The problems appeared to be directly related to the stress that rapid growth can bring. The team’s reaction to the stress created so much tension that it escalated to verbal abuse.

Western ideals warped judgment on ways to resolve the problems, because “in India things are different.”

“Authority and power create privilege and this sense of privilege led to the inconsistent application of policies (favoritism) which created a lot of resentment. With proper oversight and coaching most of the problems could have been avoided.”

 

*Service Quality Strategy via better IT by Brian Courtney

“To understand customer expectations you have to talk to your past, present and future customers. If your company can afford it, this means doing a market survey or hiring a market research team, but if you’re a startup or a small business, this may be cost prohibitive. So what can you do on your own to try to get a realistic picture of what your customers want? There are a number of online tools and sites that can help get an accurate picture so you can build a service quality strategy. Here’s what you should try to determine:”

• How do your customers want to communicate?
• Where do they want to communicate?
• How do you capture what they are saying?
• What do you do with the results?

“Depending on the kind of service you provide you’ll need to understand how your customers use technology in order to determine how to reach them. Customers range from Inactives, which do not participate in most online technologies to Creators, which are highly active, creating web content, publishing blogs and multimedia content for general consumption.”

“Once you have defined the technology profile of your customer base, you can then create a targeted communication plan.” The article offers ideas for the different profiles, as well as a multitude of links for these profiles, including:

• Spectators
• Joiners
• Collectors
• Critics
• Creators

Armed with a technology profile for your customer base, create a communication plan that focuses on where and how to communicate and where and how to monitor your customer’s online behaviors and discussions. Define your service quality strategy so that your organization can create the service standards needed to exceed customer expectations.

The service quality strategy is really a balancing act between what you can afford to do, what you can do, what you competition is doing, and what your customers wants you to do. Determine what are the most important service attributes your customers are looking for. Gather what information you can about your competition’s service successes and failures to see if they have vulnerabilities in service delivery. Address your customer expectations and align them with your strengths and weaknesses. Look for and attack competitor vulnerabilities for service differentiation and it should fit within your organizational capabilities.

Understanding customer expectations is the first step in delivering true quality service. The next step is converting your service quality strategy to quality standards that the organization can execute.

 

*Multi-Millioniare Entrepreneur Strategies by Ade Shokoya

“The big difference between successful entrepreneurs and entrepreneurs who fail is that successful entrepreneurs persevere in the face of challenges and adversity. All you need is an idea, belief and commitment.”

“Attraction + Action = Success. When you have an idea, you must instantly act on it. If you don’t, someone else will get rich and famous from it. The key to your success is action!”

“You don’t always need an original idea to succeed. Sometimes all you need is to improve or repackage and reposition an existing product.”

“To become a multi-millionaire entrepreneur, you have to continuously invest in yourself and your own development.”

“One of the key success characteristics of the multi-millionaire entrepreneurs is that they always take instant action.”

“Remember – the quality of your tomorrow depends on what actions you take today…”

 

*Michael Jackson’s Entrepreneur Characteristics by Ade Shokoya

“Whether you’re a fan of his music or not, there’s no denying that Michael Jackson had a big influence on popular culture. And for a time, he was the best in his field. So today, let’s take a quick look at Michael Jackson’s entrepreneurial characteristics:”

• Continuous Improvement
• Vision
• Innovation
• Uniqueness
• Value Focus

“The entrepreneur characteristic of focusing on customer needs and giving them value is essential to your business success. Because value and service are the foundation of any successful business. In fact, It is a prerequisite for any business.”

“Customers have so many options to choose from, if your service or product does not meet their expectations, they’ll go elsewhere. Most customers want to be loyal. Too many options lead to information overload and confusion.”

 

*5 Entrepreneurial Lessons From Michael Jackson’s Mistakes by Ade Shokoya

This article outlines “5 important lessons every entrepreneur and small business owners can learn” from some of Michael Jackson’s mistakes:

• Watch What You Say and Do
• Stay True To Who You Are
• Choose Your Team Wisely
• Manage Your Finances
• Never Over Commit Yourself

“Many industry experts questioned if Michael Jackson was fit enough to deliver such a physically, mentally and emotionally demanding schedule. Now being suggested that the stress he was experiencing may have been a major contributor to Michael Jackson’s untimely death. The lesson to be learnt from this is not to over commit. In fact, you’ll often find that you’re much better off under committing and over delivering. Because if you over commit, that might be the death of you and your business.”

 

*Practice the 10/20/30 Rule for Presentations by Joey Asher

“Guy Kawasaki is a technology guru and venture capitalist who listens to a lot of presentations from entrepreneurs seeking money for startup ventures. The overwhelming majority of the presentations he hears are, as he says on his blog, ‘crap.”"

He demands that all presentations at his business, Garage Technology Ventures, follow what he calls the “10/20/30 rule.” It’s a rule that should be embraced by anyone who wants to connect with audiences.

The rule states that all presentations should be limited to 10 slides, 20 minutes and have no words on the slides smaller than 30-point type. The rule “keeps you out of the weeds by forcing you to keep your message focused on key issues.”

“Limiting your message to 10 slides forces you to answer the question, “What do I really want to say?”"

“When Kawasaki listens to a pitch for startup capital, he allocates an hour. Limiting the pitch to 20 minutes allows for 40 minutes of Q&A. As Kawasaki knows, all presentations improve with lots of Q&A.”

“If you follow the 10/20/30 rule, your presentations will be a breath of a fresh air.”

 

What I Think

I think I see a dangerous syndrome for entrepreneurs in the articles posted on this date. Brian Courtney’s article, Attrition – Early warning signs for a startup, describes efforts to fix what appeared to be a quality control problem with the division of an IT company in India. As Courtney’s articles says:

“The problems appeared to be directly related to the stress that rapid growth can bring. The team’s reaction to the stress created so much tension that it escalated to verbal abuse.”

An argument could be made that Michael Jackson’s case, at least on the surface, represents the mirror image of Courtney’s article. It appears that Jackson’s rise to fame, obviously possible only because of his huge inventory of skills, was also propelled in the early years by the well-publicized stress inflicted on him by his family situation. In Courtney’s article, the business was nearly destroyed by the effects of stress. In Jackson’s case, his rise to fame could in large part be dependent upon that same stress, only to later take a fatal toll on him.

Ade Shokoya’s article, 5 Entrepreneurial Lessons From Michael Jackson’s Mistakes, gives one view of mistakes Jackson’s career teaches entrepreneurs. One of those was over commitment. In an eerie parallel, Jackson and Elvis might have had longer careers if they had paid more attention to another of the lessons Shokoya points to, which is choosing your team wisely. This appears extremely important for entertainers, who must repeatedly perform on queue at their peak, regardless of injuries and other day-to-day stress. Seems like that could be the same syndrome many other non-entertainment industry entrepreneurs may face when they come to work every day, then cannot let go of when their employees depart at the end of an employee’s normal business day.

Joey Asher’s article, Practice the 10/20/30 Rule for Presentations, mentions that if “you follow the 10/20/30 rule, your presentations will be a breath of a fresh air.” Perhaps that is what these entertainers and other stressed out entrepreneurs are lacking. The ability to put your business a/k/a next performance in perspective, giving balance to the “fresh air” of a real personal life, may obviously escape many highly focused, intensely driven entrepreneurs.

Staying “true to who you are,” as Shokoya’s article also points out, may certainly seem nearly impossible when everyone around you wants you to be ever more than you are. The ability to morph into that “superior being” is one talent many true entrepreneurs possess, and we mere mortals may not. While some who master that one characteristic may rise to the top of their arena, if they are not the “complete entrepreneurial package,” they may just not be able to maintain their flight to what should be their ultimate reward.

Could it be that some super successful entrepreneurs possess a fatal combination of the characteristics of both father Daedalus and Icarus his son? Greek legend say Daedalus was such a skilled artisan that he was able to fashion wings so he and his son could escape captivity at the hands of the king of Crete. Daedalus warned his son not to fly too high, because the wax which held the wings together would melt. The great skill and craftsmanship of Daedalus allowed his son to “rise to the top,” as it were, but the hubris of Icarus led him to believe he could ignore the warnings of his father. He flew so high the sun melted his wings and he fell to his death, just as his father had warned.

Is it possible that there is a mythological parallel to the stories of Michael and Elvis? Did their skills allow them to rise so high that they began to believe themselves too powerful to need to listen to their advisors? Perhaps it is the advisors who both pushed them just beyond their limits, and neglected their duties to keep them from flying so high that they risked, and eventually lost their lives.

We may never know the truth, but it is clear that any entrepreneur must be the “complete package.” Extraordinary talent and a seemingly super human work ethic alone may not be enough. If you cannot control your hubris, you must at pick the members of your team wisely enough that they can prevent you from melting in the heat of your own success.

 

If you enjoyed my impression of these articles, why don’t you read them for yourself and see what you and I missed or hit? Join the Applied Entrepreneurship group on LinkedIn. Membership is free and I try to post about ten articles a day there. We have some great discussions going and if you are an entrepreneur, we hope you will join us.

Lessons I Learned Today 7/1/09 –Seeing the Forest Beyond the Trees

This is a digest and recap of highlights, quotes, and comments from articles and discussions posted on this date on the Applied Entrepreneurship, LinkedIn group site.

  

*CEOs Who Saved Their Companies 

 “It’s a position many entrepreneurs will be familiar with, though Sonim’s journey from stardom to near-bankruptcy will be faster than most. Jamie Constable, CEO of turnaround investment firm RCapital (which now owns Little Chef) says there’s ‘a very steady flow of companies getting themselves into serious financial trouble’. Survival in this environment depends ‘not on how well run you are, but on how you’re structured financially.’”

“For investors, it’s essential to distinguish between good businesses that are simply running out of cash, and those with more fundamental issues.”

“Sometimes turnarounds are more about a fresh approach than a complete change of direction. Richard Brighton, MD of electronics manufacturer Exception EMS, was hired to turn round a company that was ‘going through a degree of stagnation, always making around £17 million, always chasing sales to make up for the customers it had lost, always at a break-even level.’”

“Viewed with hindsight, the solutions to a company’s problems may look obvious. But when you’re at your lowest ebb, those troubles can seem insurmountable.”

“Cutting costs, accepting low profitability and focusing on retention of customers may work in the short term, but often you’ll need to look further ahead and consider more radical changes to your business.”

“Economies of scale can be achieved as businesses pool resources such as buildings, equipment, specialist staff and back office functions. New products can be developed on the back of the companies’ combined expertise.”

“A business may not constitute a viable independent entity in the long term. If other companies are in the same position, a merger may be the most feasible option, minimizing competition and increasing market share.”

 

*Take advantage of being a startup company — while you still can by Elizabeth Cogswell Baskin

“As a brand new company, you can probably use all the help you can get. You won’t be a startup forever, so take advantage of it while you can. Don’t be shy about asking for help.

In the beginning, other business owners in your industry see you as a kindred spirit, or maybe like a younger, greener version of themselves. But sooner or later, as your company begins to pick up steam, that willingness to help will decline. Think of it as a compliment. This means people now consider you a strong competitor. Ask other business owners for advice. Ask everyone you know for referrals. Ask a potential customer for the sale.”

 

*Distress is painful: delay, deadly

“Ask any seasoned Interim or Turnaround Manager why distress is painful:  simply put, there’s a huge amount to do, inadequate and/or insufficient resources and time available, and frequently people are focused on doing things that are not top priority.  Early challenges include:  getting a clear understanding of the situation;  managing customer and supplier expectations;  understanding how long things have been deteriorating;  discovering what has prompted action now;  and gently challenging assumptions in the brief!”

“Probe deeper and ask why things don’t always go smoothly once the agenda is set.  Even then, denial, prevarication or obstruction by or between the stakeholders can easily constrain the speed with which the turnaround can be started, let alone executed … … and that assumes that taking modest risks is not restricted by an urgent need to operate within tight banking covenants and closely-monitored headroom. “

“Given a situation with many of these factors, the number of issues compounds; and, unless they have had prior experience of a distressed situation, few stakeholders understand how rapidly deterioration can accelerate with the passage of time.”

“If you think you’re doing everything right, but the numbers don’t reflect that, go back to basics.  Double-check all operational and financial statistics and their interdependence.”

“If the numbers are still not right, or if things are starting to go badly wrong, why not bring in a Turnaround Manager or an Interim to help stabilise the situation?  As with any walk of life, there are times when it pays to seek out specialist help from someone whose training and experience equips them to work well in a specific field: they will almost always outperform those for whom this is uncharted territory.”

“Interims and Turnaround Managers have the added advantage of not being wed to any of the historical mental frames that inhabit most businesses.  Their focus is on a successful outcome for the company or the stakeholders, so they are not necessarily bound to existing strategies or emotional ties.  They are often able to ask pertinent questions based on their experience which may help to identify disconnects between the activity and the reported data.”

“t takes courage for an executive board to call for help from an external source – - sometimes they need to be prompted to do so by other stakeholders – - but the earlier that operational and financial difficulties are recognised and an Interim or Turnaround Manager is engaged, the better are the chances of survival.”

 

*Small Business Strategies: The rules you can break when starting a business by Elizabeth Cogswell Baskin

There are plenty of people, books and seminars out there to tell you all the things you should do when launching and running a business. A great deal of it is sound advice. But as the owner of the company, you make the rules. I don’t advise blindly accepting some of the business rules others consider common wisdom. Here’s a handful of rules I think are worth breaking:

• The rule: It’s all about the bottom line.  The reality: It’s about doing the right thing.
• The rule: Entrepreneurs all work 24/7.  The reality: You control when you do the work.
• The rule: You can’t start a business without a business plan.  The reality: Many successful companies skipped that part.
• The rule: You ought to have a thorough understanding of business.  The reality: You don’t have to know everything.
• The rule: It’s important than everyone like you.  The reality: Being the boss and being liked are sometimes mutually exclusive.

 

*Gen Y is taking the entrepreneurial plunge like no generation before by Elizabeth Cogswell Baskin

“The Millennial generation is now opening businesses at a faster rate than Gen X and Boomers. The Boston Globe reports that 30-40 percent of new graduates from top colleges are forgoing the interview process in favor of the startup process. Other research shows at least 50 percent of all Millennials count working for themselves as one of their goals.”

“I predict the majority of these new businesses will succeed. The odd quirks their generation brings to the workplace that are driving their corporate bosses crazy are the same traits that will help them be successful as entrepreneurs. Most important among those traits is their expectation that they are qualified to lead, starting now. Millennials also tend to chafe at being judged by their experience instead of their ability to do the job. That’s also a valuable trait for a business owner, because starting a company from thin air requires you to demonstrate that ability.”

Gen Y defines leadership differently than previous generations. This is what I would recommend for any Millennial contemplating a startup:

• Create an informal group of trusted advisors.
• Associate the risk of business with some physical risk you enjoy.
• Develop perseverance.

 

*Anatomy of a $1.67 Billion IP Verdict by Zusha Elinson

“News of the record-setting $1.67 billion patent verdict against Abbott Labs had patent lawyers slack-jawed across the country.”

“Abbott lawyers pressed the argument that Humira was entirely different from J&J’s competing arthritis drug Remicade, made by a division called Centocor Ortho Biotech. They said that Humira didn’t infringe and tried to invalidate the patent at issue, which Centocor had exclusively licensed from New York University. They also tried to convince the jury that Abbott’s drug came first, and Lee alluded throughout the trial to the Chinese proverb, “Give a man a fish; you have fed him for a day. Teach a man to fish; and you have fed him for a lifetime,” to illustrate the idea that Abbott had taught the world about how to make the arthritis treatment.”

“J&J’s lawyers weren’t afraid to turn to aphorisms. In what observer Carter called a “fire and brimstone” closing, Dallas trial lawyer Sayles quoted the biblical prophet Isaiah, asking the jury, “Come now, let us reason together,” as they discussed the huge damages in the case.”

“Sayles and Elderkin had the task of convincing the panel that the multibillion-dollar damages weren’t absurd, since they were tied to Abbott’s sales of Humira, which totaled $4.5 billion last year. They originally asked for $2.2 billion in damages. On the other side, an expert for Abbott put the damages at a much lower $200 million if in fact there was infringement.”

“After five hours of deliberations, the jury went with the Johnson & Johnson lawyers, finding willful infringement and awarding $1.17 billion in lost profits and $504 million in royalties. The award broke the previous record, a San Diego jury’s $1.52 billion verdict against Microsoft, in favor of Alcatel-Lucent.”

 

*Michael Jackson, Entrepreneur; The culture and politics that made his success possible. by Brian S. Wesbury & Robert Stein

“Regardless of what one thinks of Michael Jackson’s music or his life choices, it is easy to recognize how enormously productive Jackson was. He broke all the records for album sales, put MTV on the map and propelled music videos into the mainstream.”

“He created something out of nothing. He used his talent, hard work, and creativity to please the ears and eyes of consumers around the globe. If Jackson–or any entrepreneur for that matter–had asked a certain kind of economist whether he should pursue this line of work, this innovation, he would have been told it was foolhardy. “‘f there really was a market for that kind of stuff, someone would have done it already,’ they would say. But this is a static view of the world.”

“In reality, the economy is dynamic. And what allows that dynamism, what creates the environment for entrepreneurship, is the institutional framework–property rights, the rule of law and even the level of common trust among citizens.”

“Economic laws can either enhance or undermine the vibrancy of an economy, helping or hurting individual incentives and the flow of creative ideas.”

“Raising tax rates, regulating business and redistributing income can all interfere with these incentives. Americans know this, but politicians often listen to economists who don’t. With so many big items–like health care, cap-and-trade and large tax hikes–on the table, the decisions of the next few years will help determine whether the U.S. produces more Michael Jacksons, or not.”

 

What I Think

I think there are any number of lessons to be learned from the articles posted on this date, but, as usual, I’m going to try to find a primary lesson to focus on. In looking at these articles, although each of them has value, three sentences stick out from the article, CEOs Who Saved Their Companies:

“Sometimes turnarounds are more about a fresh approach than a complete change of direction.”

“Viewed with hindsight, the solutions to a company’s problems may look obvious. But when you’re at your lowest ebb, those troubles can seem insurmountable.”

In many respects, this is the reason for starting the Applied Entrepreneurship group on LinkedIn and for converting this blog to digest and comment on such insights. Put another way, as the old adage goes, sometimes it is hard to see the forest for the trees.

James Dicks puts an interesting spin on this in his article, Can’t See the Forest for the Trees. Dicks’ article, posted on Evan Charmichael’s blog, includes the following advice:

“Every day is a new challenge and, if it’s done right, the ball moves forward, inch by inch, and that’s all that can be expected in these troubling times. There is a catch though. You have to do something and sometimes that something is just getting off the couch to try and make something happen. Most times it is the small things that turn into the big things and sometimes the things you try your hardest at turn out to be nothing. But whatever you do will always give you new light into what you have already done and that’s when inspiration springs to life.”

It is really only hard to see the forest for the trees if you are too close and don’t have the experience to get an accurate perspective on your situation, or a guide who can educate you. Elizabeth Cogswell Baskin’s article, Take advantage of being a startup company — while you still can, teaches us that in particular, owners of start-ups may be able to get good free advice more easily than owners mature companies, because other business owners will see start-up entrepreneurs as a sort of kindred spirit on the one hand, while not necessarily seeing them as a threat on the other. Her advice is to take advantage of this as much as possible, since this will change fairly rapidly.

The other article by Baskin posted on this date, Small Business Strategies, warns us, that although there is a great deal of information and advice available for small businesses, be careful what you adopt as “gospel.” Her article goes through a number of small business “rules,” which may be better ignored than followed. Determining what is a good rule for your situation and what is not, is an art, but to some extent it is a coachable art. Having a good mentor will go a long way to helping you sort this all out. Working hard brings rewards more often than not, but working smarter should almost always net you a better bottom line and happier path to it. 

 

If you enjoyed my impression of these articles, why don’t you read them for yourself and see what you and I missed or hit? Join the Applied Entrepreneurship group on LinkedIn. Membership is free and I try to post about ten articles a day there. We have some great discussions going and if you are an entrepreneur, we hope you will join us.