Monday, November 29, 2010

Entrepreneurs are Pioneers

A good friend of mine loves to talk about the commonality between pioneers and entrepreneurs. He feels he is constantly under attack for the innovative and cutting-edge ways he is shaking up a pretty antiquated industry.

To paraphrase, he often has said something like this to me:

"You know, Ken, entrepreneurs are like pioneers. Pioneers are out there, leading the charge, finding new opportunities, and forging new trails. But a lot of the Pioneers receive resistance. In the early days of America, the resistance sometimes came in the form of arrows being shot at them. If a Pioneer was ever hit, it was almost always in their back. You'd never see a pioneer with an arrow in his chest, always in his back."

Interesting perspective, and he always sounds bitter when he mentions this topic. But there is something inside him, maybe deep down, that loves the adversity. That's right, he loves the challenge, and he accepts his critics as proof of concept. Yes, the fact that they oppose him is the very validation he needs to prove that he's on the right track. He actually views the figurative arrows in his back as proof he's headed toward the best untamed, uncharted territory.

Perhaps thinking about the alternative to being a pioneer would help put this in perspective. After all, you could stay home, where it is relatively safe, and keep doing things the way they've always been done. But isn't that becoming more risky, with the business climate changing at an increasingly fast pace? At the risk of being left behind, perhaps some of the adversity pioneers face doesn't seem as daunting.

Wherever you are at in your entrepreneurial venture, you already know the risks and rewards of being a pioneer. But you should keep charging on and moving forward, not turning around long enough to expose the front half of you to competitors and naysayers alike.

Tuesday, November 23, 2010

Paralysis by Analysis

I get to work with numbers and analyze a lot of businesses, business models, and opportunities based on their financial impact. My experiences have taught me that you can quantify just about anything.

For example, a business is about to crumble. You can put the numbers together to figure out of the business is savable, and if it is, know exactly what you need to do to turn it around. Or, you may be considering adding a new partner or buying a new piece of equipment. Again, using the numbers you can put together a pretty good story about whether or not you should move forward with those plans.

But sometimes entrepreneurs can fall into the trap of paralysis by analysis, or as others refer to it, analysis paralysis. It is possible, and it happens often, that we can spend too much time and effort analyzing and not enough time doing, testing, and trying. It can even be possible to become so overwhelmed with data and analysis that we can't move forward with a decision, stifled by too many options, assumptions, and conclusions. Here are some quick thoughts on how to avoid this happening to you.

First, realize that if making the right decisions were easy, then everyone would be a successful entrepreneur, right? Too much and too little information are much more common than entrepreneurs getting just the right amount of information to make the best decisions possible.

Second, feed whatever information and analysis you have into your intuition. Process it. Flesh it out, either mentally by yourself or verbally with your team (this is almost always the best option).

Third, once you have a grasp of the options in front of you, put the data aside and listen to your gut. If you're still unclear on the best direction, go back and see if the analysis can answer any of your doubts or questions.

Fourth, once your intuition is fed with data and analysis and your gut is telling you what you should do, follow it. Even if there is more data to process and more information to analyze. Entrepreneurs have a keen sense of what will be best for their businesses if once they gain clarity through the right amount of information and analysis.

The reason paralysis by analysis happens is because entrepreneurs don't trust their intuition. So, they think they can replace needing to use their intuition with more data. And all that will do is keep taking you in circles. Get the data, analyze it, interpret and feed it into your intuition, or gut, and then pull the trigger. Your decision may be to do nothing, but that's probably the best decision if that is what your intuition is telling you.

In an effort to avoid paralysis by analysis I have seen some entrepreneurs just make 'from-the-hip' decisions without taking the appropriate amount of time to analyze, discuss, and let their intuition drive their decisions. Yes, there is a difference between making decisions on the fly and using intuition. So finding the right balance is the key.

Wednesday, November 17, 2010

Innovation and Marketing, the Two Driving Business Functions

I have met a lot of entrepreneurs recently who have told me how superior their product or technology is compared to their competitors. But their competitors have far more customers and market penetration.
As a result, in the last several months I have found myself sharing some or all of the following quote from the great management thought-leader, Peter Drucker:

"Because the purpose of business is to create and keep a customer, the business enterprise has two--and only two--basic functions: marketing and innovation. Marketing and innovation produce results; all the rest are costs. Marketing is the distinguishing, unique function of business."

This may be a painful realization for some, but the best product or service doesn't always win. In business, usually the best marketer wins. So, here are some general recommendations for any entrepreneur who thinks their infatuation with their product is blinding them from being the best marketer among their competitors.

- Complete a market analysis relative to your competitors and your product, preferably with clear recommendations on the best segments of the market and the most valuable positioning in that/those markets

- Get someone on your team now who has marketed and sold to the same customers. This addition to your team should also get the hands-on, roll-up-your-shirt-sleeve mentality your entrepreneurial company was founded upon.

- Care more about how best to solve your customers' needs than your technology or product. Many entrepreneurs really struggle with this one, thinking that they know what's best for the customer. The challenge is always getting the customer to believe that. So get their feedback throughout your product life-cycle and be willing to shed features and design elements that you're holding onto because of your love affair with the product, not because of what is best for the customer.

- Have fun. Marketing is one of the most exciting parts of business. When done correctly, it is quantitatively based and often more measurable than many other things you do in your company.

This is just a 'starter' list. Does anyone want to add any more to the list?

These thoughts don't apply to products only. The same concepts can help in marketing services and can help in marketing you if you are looking for a new job or need to position yourself for a promotion.