Monday, March 26, 2012

The Downfall of Less Difficult, Less Expensive, and Less Risky

I just finished reading Norm Brodsky's article from the March 2012 issue of INC. He directly addresses a growing concern among 9 out of every 10 entrepreneurs he meets. They're starting web-based and SaaS businesses while they maintain their full-time employment and steady incomes. They invest a little into development, but never enough for them to feel like everything is on the line.

The downside of this scenario, according to Norm, is that these entrepreneurs lack the sense of urgency associated with "...scrounging up every last cent" to risk it all, a do-or-die environment wherein "...success or failure becomes a matter of survival". Norm thinks this is good because:
"Your instincts are sharper. You approach problems with a totally different mindset. In a business you depend on for your livelihood, you have to come up with a solution immediately."
I see the same trend, and it leads to a couple of other interesting conclusions. First, even the small percentage of these businesses that do generate some paying customers generally stall in their development and fall far short of their potential. Why? Because the entrepreneur is waiting for it to replace his/her income and almost always ends up too fearful to risk everything, commit 100%, and really going for it.

Second, in the last five years we have seen a proliferation of web development companies and online search (both organic and paid) marketing consultants and agencies. These companies are probably the biggest winners of this trend toward part-time, web-based start-ups, primarily because these part-time entrepreneurs are buying some level of services with savings, retirement funds, or money borrowed from an un-savvy friend or relative that will likely never be repaid by the website itself.

So, if you fit the description of this growing trend of entrepreneurs, make sure you give your venture the intensity, attention, and commitment it deserves!

You can read Norm's article here: The New Breed of Entrepreneur

Thursday, March 15, 2012

1 Forgotten Characteristic of Entrepreneurs

In a recent speech at UVEF, Tony Zito of mediaFORGE identified three commonly recited characteristics of successful entrepreneurs: skill, timing, and luck. But he spent no more time on any of those. Besides discussing the concept that Whatever You're Thinking, It's Probably Wrong, he chose to focus on something that is often overlooked on the path to entrepreneurial success: failure.

He then went on to share some of his failures and how they ultimately led him to success. Here are some of his quotes on the subject:
"Failure is a by-product of pushing the envelope."
"You have to expect you're going to have failures as an entrepreneur."
"Failure is the secret to success."
"Failure increases the chances of entrepreneurial success."
"Entrepreneurs who have failed before are more likely to succeed." 
"You should want to fail, and want to fail fast." 
You can read the entire Twitter stream created by the attendees of the event here: Tony Zito of mediaForge was Excellent.

Monday, March 12, 2012

Whatever You're Thinking, It's Probably Wrong

The entire audience was silently engaged, on the edge of their seats, as Tony Zito of mediaFORGE was as open, honest, and transparent as I've ever heard an entrepreneur be when explaining the dark days of being ready to give up on a start-up. You can read some of the great Twitter stream from the event here: Tony Zito of mediaFORGE was Excellent.

As they pivoted from business model to business model, Tony realized that he could not come up with his best ideas in a vacuum. He learned this principle: no matter what he was thinking was best, he was almost always partially wrong, and sometimes completely wrong. His proof: he cited a study that found that 60% of companies are now doing something completely different than when they started.

It takes a level of humility, self-awareness, and honest/realistic perspective to accept that conclusion. Tony was making plans to close down his company. He had expressed this to his investors and, in one last effort to salvage something from his multi-year effort, flew to San Francisco, hoping to "fire-sale" his entrepreneurial baby, lick his wounds, and then figure out what was next.

As the meeting came to a close with no acquisition interest from the other party, Tony openly shared that he would return to Utah and close the company. The party suggested a business model that Tony and his partners had contemplated many times but was not economically feasible given the investment capital through which he had already burned. The party offered to give the required inventory for free, and before long the company had paying customers, had completely reversed its course, and was on a growth pace of more than 50% per quarter...which has continued for the last three years.

Pretty impressive, and a great example of: whatever you're thinking, it's probably wrong.

Friday, March 9, 2012

Don't Fight Change - Embrace It!

Technology seems to be changing every day. What was the norm yesterday quickly disappears into the past as the old, archaic way of doing things. Yet I hear so many people who fight against and resist these changes. The only one that loses is them, and those who, for example, wish they would break down and buy a cell phone or check their email more often than monthly so they can communicate more often.

Technology is only one example. As long as its for the better, change can only improve your life. Why fight change? Why not embrace it for all that it is and represents? We know its coming--change is inevitable, and, as I've heard many quote, the only constant. Embrace it or the world and many of your hard-earned relationships may leave you behind!