The first step of entrepreneur road is to come up with the thought, or vision. In my experience this is very simple to most people. Many people already have an idea for a business. For example, they have run across a solution to a problem they have experienced. Or they are finding a particular service coming into very high demand. But for other people it is very difficult. They can think and think for years and never settle on some service or product they can offer the world. So what do you do if you are one of these people? Here are 5 ways that you can come up with your next idea for a start up.
1. Alleviate a problem others currently have.
This is the classic go-to for inventing an offering. Just make sure that your offering is both unique and valuable.
2. Do something better than it is done now.
When I heard that someone came up with an 18-month tattoo I hit my self in the head with my hand. Sure you can go through the whole tattoo removal process. But now you just saved yourself 8 months of removal sessions and regret…..and PAIN!
3. Combine two disparate things into one.
Any time you create convenience and value you are looking to gain market share. This can be putting Oreos into ice cream or putting two video games in one package.
4. Anticipate the future of technological advancements.
This one is where you can be the first mover. You want an example? Think about the future of driving. In 10-20 years we will be dealing with driverless cars. How many people have thought about the purpose of the space in a vehicle when you no longer need to actively drive? It can become a bedroom, an office, a living room, a man cave. Now how many people are designing services and products for this new area? Well, now you know what to do!
5. Anticipate the future of laws.
Laws are a major source of opportunities. They take away old answers to problems when regulations are tightened. This will then require new solutions. On the flip side, it may open new opportunities for businesses when new services are allowed. Take the legalization of marijuana – what new services will this business require?
Get on it! What ideas sprout to your mind from this list?
I spoke another time about taking the first three steps onto Entrepreneurship Road. These steps are basic but essential and everyone must take them if they are going to reach success.
The first step is simple – think. All you have to do is create the thought. Think of a vision, think of something that does not exist right now, think of something that exists but that you can do better. You can think of how to solve a common problem. Whatever your idea is, all you have to do is think it. Spend time nurturing this thought. Dwell on it. And in turn let the thought or idea nourish you. This will build optimism and excitement which will be necessary to maintaining momentum later on. If you do not have a strong vision you will likely run out of steam short of your goal. (I find that thinking about the vision on a regular basis refuels your energy and momentum.)
The second step on Entrepreneurship Road is to take the thought from inside your head (mental reality) and bring it into the real world (physical reality). This is essentially giving birth to your vision. Previously your vision had no tie with the physical world. This step changes that. Actions that fit this step run the gammit. It may be as simple as telling someone about it or writing it down. Or it may be as concrete as saving cash for the anticipated project or hiring a consultant. Usually it involves investigating the value and then the feasibility of the idea. Does it already exist? What inputs will be needed and what resources will be required to transform the inputs to outputs? What is the business model and who is the true customer?
The second step may be as simple as writing the idea down or as complex as creating your first goal. The third step is to accomplish the second step. That’s all there is to it. So the second step is to begin and the third step is to finish what you began. You might describe the broad steps and then detail all of the intermediate steps. Create a timeline. Then organize each days to fit the steps necessary to accomplish the goal. Again, if you have a simple action then these two steps will be short. If you are taking bigger steps then the timeline may be longer. Writing your idea down will take 30 seconds to 3 hours depending on your level of complexity. If you are going to hire a consultant then it may take as long as two weeks to research and meet with several consultants before settling on the right fit.
From here on out you need one primary ingredient. Having this one ingredient is usually necessary to overcome any resource shortage (including capital) or other obstacle you may face. This ingredient is ‘continued momentum’. Continued Momentum is nothing more than always taking the next step. This sounds simple. But trust me, most (I would say 80%) of projects do not get this far. And of those that do get to the Continued Momentum step the vast majority (easily 90% of the remaining 20%!) do not utilize Continued Momentum until the project is completed. And finally, a completed project does not mean success. It simply means that you have taken your project as far as it can possibly go. This usually means you have taken the project to completion and found out the idea is not feasible for whatever reason, i.e. it was a bust and your project is a failure. DO NOT DESPAIR! BE PROUD!! MOST PEOPLE NEVER GET THIS FAR!!! FINISHING A PROJECT IS A RARE ACCOMPLISHMENT.
I would gladly consider hiring a person that has finished a project but would never do the same for a person who has not.
What step are you on? What step are you stuck on?
In two weeks I will graduate from the UNR EMBA program. It was two years of tough work and slogging through many difficult assignments. We never had more than a couple of weeks off. It is definitely an accomplishment that has taught me much. I will always look at the value of money in the true lens of time. I will now always be able to appreciate different business strategies in a given market. I will understand why a business is making certain choices relative to their strategy. And I will always appreciate how glaring and far too common poor management styles are today. (Especially this last one! Management is not that hard, folks. Take Dr. Simmons Bus. Org. class and when you learn how to properly manage others you will be amazed at how bad most managers are!) Truly, my MBA coursework was a great investment.
While the degree was difficult (two solid years with strict deadlines and prolific reading/assignment lists) it still lacked one thing. There was one aspect of business that was not covered well enough. We did not spend enough time learning about the guts of a business. We did not cover well enough the gears of war – accounting.
Accounting tells you everything you will ever need to know about a business. Who has the money, what they did with it, how productive was it, where should it go next year…..all of this can only be answered with accounting. And if you do not know it, then the answer to these questions can be twisted or obscured by those that do. I began a weeks-long conversation with a friend of mine sitting for the CPA exam about a start-up I am working on. During the conversation she informed me of several points in business that I was unaware of due to my lack of accounting background. I felt a bit embarrassed. I now hold a job as an Accounting Specialist and work directly with several accountants of various levels of expertise. As I listen to them and try to keep up with them I again am reminded of this missing component an MBA graduate will likely face without a better understanding of accounting.
For this reason I am moving on after graduation and attending the remaining 7 courses needed in order to sit for the CPA exam. And then I will move along further and take the remaining 6 courses required for the M.Acc. I anticipate that this will be a 4 year journey. However, I honestly feel that this is the only way that I can sit across the table from people and small businesses that I wish to advise and to help successfully grow and feel completely competent. Only then will I feel that I am a well-rounded and solid business man.
Learn the Gears of War or know that your armor holds a fatal flaw.
You have an idea. You are a very stingy individual. These two factors are the two ingredients most likely to lead to the lean, successful start-up. And that is where the true payoff lies. Last year we took our business plan to Jason Yelowitz, a seasoned, insightful, and respected business adviser. He reviewed it and told us exactly where we needed to go from there: get your presentation together and get ready to pitch to the VCs. We asked how that would work financially. He told us that we would get the money we wanted and then our shares would get diluted, and diluted, and diluted, and diluted. And diluted once more for good measure. Then we would spend any future success trying to get out from under other people owning our business. In other words, if you are going to be involved in your business in the long-term or you feel that you deserve a good payoff for your work DO NOT LOOK FOR VENTURE CAPITAL!
Don’t believe me? Here is a great example that just hit the internet today from Forbes concerning the founder of Chipotle –
I skimmed over “Rich Dad, Poor Dad” by Kiyosaki. The gist is that some (i.e., poor) people put their resources into liabilities instead of assets. For example, if you buy a new and expensive car you have essentially wasted a lot of money. Buying a basic and less expensive car is far more productive because it allows you to put your money into something that appreciates in value as opposed to a car which almost always depreciates.
This is what you are doing when you take capital from outside sources in exchange for equity share. You are immediately depreciating your own assets (your shares).
I fully realize the benefits of capital in maximizing growth. And many people think it is a necessary evil. In those cases, capital should only be considered if you are competing to be first to market and/or win market share. Even then we are learning all the time that first to market can often be disadvantageous and even disastrous.
If you can afford to grow organically you will find that you will have more time to adjust and maneuver your product. You will avoid being forced to make decisions in the face of the unknown with huge stakes on the line (this is exactly what is required when you try to manage explosive growth). Just look at Solyndra – growing fast can kill you. If you are trying to win the race and you go all out on the gas pedal, you increase your chance of experiencing a race-ending crash. Boot strapping your start up may be the toughest part of your businesses development, but it may be the most important, too.
Look around you and see what it is that people do with that block of time we hold dear that lies between the moment you get home and the moment you go to bed. For many people, their job is tiring (mentally or physically) and they “just need to veg out”. For others they head home and spend those few hours taking care of the kids (dinner, bath, bedtime, and then cleaning). Then there are those that use that time for fun. By ‘fun’ I mean they go out to dinner, to the movies, or to a friend’s house. They may spend time on their hobbies. They may play video games. Finally, there is the innate entrepreneur.
The innate entrepreneur seems to lead a double life. In essence, they get home and begin a second job. This is where there passion lies. I have noticed that the nature of the innate entrepreneur has at least three characteristics: 1. they can not stand still – they are always busy doing something. 2. they are always building something – whether it be an idea, a product, or whatever. 3. they dream in color – they see nothing but possibility and those possibilities are answers to other people’s problems.
Let’s be clear about one thing. Entrepreneurs DO NOT ALWAYS WIN! Most do not go on to own their own successful business and then sell it and retire. Most fail at least once. And it takes a lot of resources to fully explore even a single venture. While many of them do go on to build something of value, ultimately success is not what drives them – doing what they do is innate. If you want to build a bird house, they want to build 500 and sell them on Etsy!
I found that I always appreciated and wanted to be around the innate entrepreneur type of person. They are, after all, vibrant and interesting for the most part. If you are a member of this category, I recommend you begin associating with others of a similar nature. Networking with like-minded individuals will lead to more ideas, improvement of your original ideas, and networking that can put you in touch with the right people at the right time.
If you are an innate entrepreneur – good luck! If you are not – go build a birdhouse!
What are some characteristics of the innate entrepreneur that you have noticed?
5 Tenets for Doing Business Better
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A few years back I watched as two fellow employees disappeared behind the boss’s door. When they came out over an hour later neither of them were happy. One had gone in to demand that the other be fired for his cut-throat methods of climbing over other people. He even threatened that only one of them would be working there the next day. Normally this would be a simple situation of “He said, She said.” which would put the boss in a simple situation wherein he could only promise to keep a closer eye on things and separate the two. However, the accusing employee went in with what amounted to a log. In this log he kept track of every instance and every utterance that came his way from the supposed cause of contention. Now what could the boss do? I later found out from the boss that he pleaded for the whole hour with both parties to get along and promised whatever he could to help the situation. It was not easy but things held together for a time (though both employees left the company not too long after).
The purpose of this example is not to teach a lesson in management. The point is the power of a written record. Even if the accusing employee was wrong (and he was) he came very close to having another employee fired on the spot. That is the power of a written log. But let’s not discuss this powerful tool as a weapon, but as a shield. No matter what size company you are in, no matter how many employees you have (even if you are your only employee!), you will eventually have someone on the other end of the deal (a supplier, a customer, a distributor) or the other end of an assignment (an employee, a co-worker, a worker, a boss) that will put you in a confrontational situation. This confrontation may be a simple mis-communication or it may be an official politically-motivated ‘take down’. Whatever the cause think of the protection you will garner when you resort to your log and point out who asked for what on which date? Whatever the situation, take a note from me and protect yourself from those inevitable run-ins with confrontation – keep a log!
And when it does come in handy, write a note in your log to thank me!
Ever have a similar situation where you wish you had kept a log? Or a situation in which you did?! Let us know.
*keep in mind that a log is a written journal of events and that while email can act as a log of sorts it is far better to keep a log and point to emails to back the log up.
5 Tenets for doing Business Better
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At a previous job that I held a few years back I made an odd observation. I found myself returning time and again to a specific colleague’s desk whenever I came across a roadblock in my own work. What was it about their desk that made my return so necessary? It was her red three-ring binder. Her red binder was full of everything that related to her job. It included ‘the who’ for every situation, ‘the what’ for every location, and ‘the how’ for every procedure. She was great and had plenty of other qualities that I needed from time to time. But that binder saved me from wasting several hours of referencing online How-to and Procedural manuals that were likely out of date, pestering other co-workers that might look down on me, and keeping me from looking like I did not know what I was doing. I would often just saunter up to her desk and mention the need to look at her binder and that was all it took.
The strange thing is, I was not the only one and no one realized what was happening until I brought it up at lunch one day.
“The ‘Red Binder’ saved me two hours today!”
“We need to make a copy of that thing for each of us!”
It was only at that point that I realized how important it is for each employee to try and catch our own version of institutional memory. You do not go to class and listen to a lecture and NOT TAKE NOTES! Why is the workplace any different? While in school, I knew that if I took notes I would do better. Few realize that if you re-write your notes you will do EVEN BETTER! This applies to the workplace just as well.
The next time you learn how to do something, where something is, who is the contact for what, or anything else that you find yourself filing away in your mind….take the time to include it in your own Binder. You will find yourself (and many others!) referring to it time and again. You will find yourself among the workplace heroes.
How well do you think this idea would fit in at your workplace? How many already do this? Let me know your thoughts.