The Million Dollar Tattoo

Learning how to turn ideas into action

Archive for August, 2010

Researching your Startup’s Market

via The Founder’s Institute

John A. Allison, “Leadership and Values”

This is an amazing, inspiring and thoroughly enjoyable talk by John A. Allison, chairman of BB&T. Spend an hour with this video and you will definitely come away with some extremely valuable lessons.

Via Darden’s Youtube Channel

Why Start a Business? – Taking the Plunge

This is a really great video from Darden’s Youtube channel.

Lazy is an Opportunity

I’m a lazy person. I always have been, and I probably always will be. It’s in my nature, so the only way that I get things done is by making an effort to push past the slothful veil of ‘I’ll do it later’. That’s something that I’ve been learning to do, and with training, dedication and willpower it can be done. I don’t try to pretend I’m not – I just make an effort to make it a non-issue. This reality got me thinking. It seems that laziness is an inherent trait of human-beings, and that’s actually a fantastic situation, for two main reasons.

1.) It forces us to work on methods to circumvent the urge to minimize our effort. It is character building to acknowledge such a flaw and to research and implement ways to push past it. A lot of the techniques I’ve researched to combat laziness, tardiness and procrastination have helped me in all areas of my life, both personal and professional.

2.) It means that there is an endless array of opportunities for entrepreneurs. Any process, product or service that can minimize effort or streamline a task is valuable to virtually every human-being on the planet. From washing machines to typewriters, chainsaws to microwaves and beyond, minimizing activity or making a tedious task easier is a sure-shot winner. Human-beings are inherently lazy and that is someone to be thankful for.

The Fear of Success – Knowing when to Fight the Instinct to Quit and Run

I just finished having a discussion with a friend about the fear that I’m feeling at the moment in regards to launching my business. To be perfectly honest I’m having doubts about my concept, the viability of my business and whether anyone will actually use my service.

I’ve experienced this before, and it’s something that everybody feels in one way or another during their life. One of the main reasons for this is what Seth Godin has referred to as ‘the lizard brain’. The fear generally rises the closer towards launch you are, and the logic behind it makes perfect sense. Your primitive brain is trying to protect you from failure. In times long ago this was amazingly useful behaviour, as failure could equate to injury, exile or death. The thing is that these days we don’t have the same consequences to worry about, yet the underlying sensation of fear is just as acute.

As I was saying to my friend, the sensation of fear can also be a fear of success. Success may mean changing your lifestyle, moving in different circles and almost certainly facing many unknown situations on an almost daily basis. As human beings we can crave certainty, so success can pose a similar threat to our primitive side – it is much safer to stick to the path most travelled than risk facing unknown routes through life.

The above is not to say that sometimes these fears aren’t justified. Sometimes the fear is of a concept or idea being torn apart or invalidated. Although in the short-term this may be painful, it can save you from much greater risks in the long-term. Some ways to face this fear and discover warning signs early on is through the process of customer development. As has been well-documented, no business plan survives first contact with the customer. Embracing this fact and acknowledging that a great many of your assumptions will prove to be incorrect is a necessary step towards eventual success.

Remember – failure is feedback and being wrong is a part of life. Entrepreneurship is not about taking risks – it’s about understanding the risks, making every attempt to minimize them and then making a final decision about whether to forge ahead or change paths.

3 Mistakes of First Time Entrepreneurs

I’ve spent a few years learning about entrepreneurship through as many books, videos, blogs and discussions as I could handle. There are millions of great resources for an aspiring business person to make the most of, and now that we have access to information at the tips of our fingers via the internet there is no excuse not to learn as much as possible.

That being said, there is absolutely no substitute for jumping into a project and getting your hands dirty. I’m a great believer that practical knowledge and experience are the best teachers, and I can attest that I have learned so much in the past 2 years that could never be taught by theory. Of the many lessons that I’ve learned the hard way, the top 3 have been:

1.) Not choosing the right team members.

I was so eager to launch my business that I didn’t take the time to carefully evaluate who I was working with. Personality types, work ethic, shared values – these are all facets of team member that will make or break the combination. On several occasions I found myself in awkward situations due to my carelessness. For the first time in my life I found myself in the position of having to fire someone. At the age of 26 I had to remove someone who was almost double my age. It became very messy as he was a shareholder, and in the end it took over 6 months to resolve the issue. All of that could have been avoided if I’d taken more time, trusted my instincts and placed the emphasis on finding the right person for the job than just filling up a position.

2.)  Not Spending Money

There’s a fine line between between being pragmatic with your finances and just being tight. The first time I attempted a start-up I vastly under-estimated the amount that would be needed to get the project off the ground. I tried to bring people into the project for free in exchange for equity and hardly spent a dime for the first year. Some people may say that’s the way a start-up needs to be run – and in many ways they would be right, but not spending money means that you either need to be able to build the business from scratch with your bare hands (I’m not a techie), or you need a team of highly-dedicated people. I’d like to say that the project crashed-and-burned spectacularly, but it took so long to get anything done that it kind of faded away dismally. Now on my next project, by spending real money, I’ve made more progress by myself in 4 months than I did with a 5-man team over 2 and a half years!

3.) Having a Business Idea – not a Business Model

Just because you have a great idea does not mean that you have a viable business model. One of the biggest mistakes that I made was thinking that because the idea I had was cool I could turn it into a profitable business. I spent hundreds of hours on the concept, refining the core service and adding cool features here and there, yet it wasn’t until I was challenged by a potential investor that I realised I didn’t have a viable business model. There’s something to be said for creating something cool or useful without necessarily focusing on turning a profit, but without a way to generate returns what you end up creating is a hobby, not a business. I believe that it’s very important to work on a model for financial success right at the beginning of the idea cycle. The financials don’t have to be rock solid 5 year projections (they will be wrong over any period longer than 6 months – a year if your lucky), but at the very least they should give you a good idea of whether it’s worth investing your time, money and energy into the journey.

Great Piece of Advice from Michael Fitzpatrick

“I think I was always intimidated by the idea that there were probably thousands of other people thinking about the concepts that I was mulling over in those business models. What I’ve realized in the last couple of years is that there are, actually, thousands of other people thinking about your business. The only difference, and it’s a huge difference, is that in an entrepreneur’s case, they actually decided to go and try to make it happen. Taking action, particularly when you’re in that warm, cozy blanket of a bigger company, which was my scenario, it’s really hard to do. But if you are doing it for the right reasons, the best thing you can do is actually make the jump. That was, I think, and continues to be one of the things that, in my process of over a year of mulling about, has been a lesson learned.

Another huge important part of a startup and being an entrepreneur is the iterative process. Whatever your original business model is, it’s going to change. Whatever product you think is the future, might not be the future. Having an open culture where people can tell you, “This is wrong. This isn’t working.” In particular, having a culture where customers tell you what isn’t working is extremely valuable. We’ve done a good job of leveraging customers to help fuel the future direction. As we talked about, we’ve also done a good job of telling them no when it was appropriate to stay focused”.

– Michael Fitzpatrick, CEO of ConnectSolutions.

Excerpt from an interview by Andrew Warner of Mixergy.com

The full interview and transcript is here