A Bigger Voice

What an Entrepreneur Looks Like, Part 3

In the first posting of this series, a sixth-grader showed us how the mind of an entrepreneur works--imaginative, customer-oriented, and opportunistic (in a good way).

In the second posting, we saw how one Millenial uses his resourcefulness, curiosity, and team-oriented leadership style to shake up the music industry's way of finding up and coming bands.    

Much has been written about the joy of being an entrepreneur, the glory and positive impact when successful.  But I'm curious about the flip side.  What happens when things get difficult? Photo by alaina.buzas

In this third and final posting of this series on the different faces of entrepreneurs, we explore the messy side of entrepreneurship--when things go wrong.   It's a big topic, one that all entrepreneurs face, and one that I've been living with over the last few months.

The more I talk to entrepreneurs, the more I admire anyone who tries their hand at starting a business.  Often, things get messy when assumptions (spoken and unspoken) are proven wrong. This creates situations where there are no easy answers and all the choices are unappealing.  I've used pseudonyms below to protect the privacy of entrepreneurs who were willing to share their stories.

"Joanna" assumed that building a business could fit into the life of a mother raising three children under the age of 7 and the role of a supportive spouse to a serial entrepreneur, who hasn't taken a salary in years.  Her assumption was wrong.  She wonders when it will be her turn again, when she'll have enough financial and mental runway to get something off the ground. In the meantime, she's looking to return to a previous employer, on a part-time basis. 

Returning to work for someone else is one that Mike knows all too well. He spent nearly three years trying to get traction on a bootstrapped startup that he described as a "Open Table Meets Yelp" for the XYZ industry.  His spouse worked in the startup, while holding down a full-time job, and eventually, both lost the juice to continue.  Mike now works at a thriving Silicon Valley Internet company. 

This option--dropping out for period of time in exchange for steady paycheck--is one of the little talked about paths for entrepreneurs. Photo by bradleyolin.

And then there's "Louise", who found out that assumptions about the adoption rate of her recommendation sharing service and the ability to sell sponsorships were both wrong. Louise needs a new business model and she needs to prove it out, quickly.  Funding this business on her own, she's run out of time.  Like many entrepreneurs, Louise has plenty of experience in the corporate world, working inside established companies, where unprofitable projects go on for far too long.   In the start-up world, trial and error must proceed at a much quicker pace.

"Dan" also knows the value of time in a start-up.  He's been working on a software start-up for over four years, aimed at serving university students.  His wrong assumption?  The adoption rate of free software that helps to recover lost laptops.  He recently remarked, "If you looked at my website, you'd think I was driving around in a BMW.  Instead, I've got a car that has 160,000 miles on it where the door doesn't open without a good jiggling."  He's emotionally drained, trying to figure out how to make his start-up profitable, with less time invested and better results. He's a serial entrepreneur, using his first company, established decades ago, to fund his start-up and now on the lookout for external funding.  

Neither Dan nor Louise have lost their optimism for what might be around the corner, with the right packaging, a strategic trade show, or a different market. In a ten-round boxing match, they are willing to come back for rounds two and three, after getting punched in the stomach in round one.  They are smarter, and hopeful that learning from their experiences will make the difference in the long run.  Photo by _Fidelio_

"Patty" took a different route, having built a thriving company over seven years, one where venture capitalists were willing to invest.  And then she burned out. Her personal life with her family had suffered considerably.  She took a year and a half off to rejuvenate.  Now, she helps other small business owners avoid unnecessary struggle and depletion. 

In each of these stories, the way that entrepreneurs respond to the messiness is familiar and yet, uniquely their own.  They take a job, continue with another trial and error, or in extreme cases, drop out completely.  One option is not better than the other, but rather a response to the circumstances at the time and what's best for an individual, personally and professionally. Photo by Noobins.

To hear these stories, one might want to quit before even trying.  Yet, my friend, "John", a seasoned serial entrepreneur, provides another perspective.  John is working on his sixth business, and is known for being meticulous about measuring the right things.  He lives close to reality.  He's gone more than a few rounds in the boxing ring and could tell me ten more stories for every one that I've relayed here. He also found success right out of the chute, with his first company, started in college and sold in his thirties.  

What intrigues me is that John has also had his share of failures, when things got difficult, and the only choice was to move on.  Success is no insurance against failure.  And failure isn't a pre-requisite for success. 

A few of John's perspectives that I found fascinating:

• On the need to prove something: "All entrepreneurs have something to prove.  It's part of what makes them an entrepreneur."

• On not having control and humility:  "Expect that things can blow up at any time."

• On the lifecycle of companies: "Companies go through a cycle, starting with the excitement and thrill of starting up and growing.  Then it matures and at some point, chaos comes.  During the chaos, which is really no fun but it always comes, we remember the excitement of starting up and growing.  That's what keeps us going.  And finally, something dies--some part of the company or the company itself. Until something else is born.  Then the cycle starts again."

• On persistence and failure: "Each time we go into the ring, we know there's a chance of getting beat up.  And each time we get beat up, it's not as bad.  But we still get beat up. We all experience failure in our lives, but failure as an entrepreneur is a lot more visible."  Photo by bolhav
  

What I've learned from John and others is that those who endure failure best are the ones who win.   They are able to see failure not as a personal indictment, but as a sign that something needs to change in the equation.  They are able to cut bait, when they've sunk time, energy and money into something that isn't working.  No small feat.  Emotional attachment is both a blessing and a curse for entrepreneurs.

Seth Godin's newest book, Poke the Box, underscores the importance of failing.  A few choice quotes:

"The person who fails the most usually wins. If you fail once, and big, you don't fail the most. If you never fail, either you're really lucky or you haven't shipped anything. But if you succeed often enough to be given the privilege of failing next time, then you're on the road to a series of failures.  Fail, succeed, fail, fail, fail, succeed--you get the idea." 

"Talk to any successful person.  He'll be happy to fill you in on his long string of failures."

"I started a record label, and failed.  I started a fundraising business based on light bulbs, and failed.  Launched the first aquarium on a VHS tape and failed.  Published many books and failed. The winning part?  I learned from each of these failures."

This is the essence of entrepreneurship--trial and error.  Being keenly observant, willing to face reality, humble enough to know that even smart people get hammered, creatively resourceful, and adapting quickly.

Why do it?  Why go through the pain?  I can think of no better reason that this one, from Pam Slim:  

"Entrepreneurship, at its heart, is aligning your purpose for being on earth with a business idea that is so compelling that you must do it, despite the fears that hold you back."

 Photo by @boetter.

What An Entrepreneur Looks Like, Part 2

This is the second in a three-part series of postings about entrepreneurs I've met this year.

Alex White is 24 years old, a recent graduate of Northwestern University's School of Education and Social Policy (SESP).  I interviewed Alex and his two co-founders, Samir Rayani and David Hoffman,  from Next Big Sound as part of an event for the Northwestern Club of Colorado. Alex, Samir, and David were part of a Northwestern class on entrepreneurship that has since spawned other successful ventures. 

Next Big Sound was named to Billboard's Top 10 Digital Music Startups for 2010, has been endorsed by popular tech blogs, Mashable and TechCrunch and is a TechStars 2009 company.  The company is based in Boulder, CO, has 11 employees, not including Alex and his two co-founders and is backed by venture capital.

I particularly like this description of what Alex and his colleagues have created:

"Alex White and his coworkers at nextbigsound.com are the modern day Lewis and Clarks of the digital frontier, collecting data and tips about fan interactions on the web."

Entrepreneurship is a Rollercoaster

What struck me in hearing Alex and his co-founders talk were the ups and downs that many entrepreneurs experience before "making it", from living together in a house in Champaign-Urbana, Illinois over the summer for less than a $1/person/day to burning through the first $25,000 seed money sooner than expected to getting Sony as a client to all three co-founders moving in with Alex's aunt in Boulder.  Each day is a work day, the days and nights blurring over time. 

In the following video, Alex talks about the joys of being an entrepreneur, the sometimes heavy responsibilities that entrepreneurs feel, and the advantages of seizing the day. 

 

It's About the People, Stupid

During the event, Alex stressed the importance of the team. It's more important than a  hot product or cool idea. Given the dialogue with his co-founders, I could see that he walks the talk. 

The most compelling story that Alex told that evening had to do with the idea that entrepreneurship is first and foremost, about the people.  Good ideas mean nothing in the hands of the wrong people.

Alex recalls arriving in Boulder, having driven out from Chicago with Samir and David. On the way out, they concluded that their original idea that won them acceptance to the prestigious TechStars incubator wasn't going to work, for a number of reasons. Alex talked to the managing director of TechStars--that there was no idea that they readily had in hand to develop and implement during the summer program.  The reply he heard went something like this:

"You might not have an idea right now, but in 90 days, you will be getting in front of an auditorium of investors, pitching your company.  You are in this program because of who you are, not because of the idea that you submitted.  We are betting on you."

Those words are both sobering and motivating.

Curiosity And Passion

Alex goes on to talk about how the concept of Next Big Sound, which tracks social media activity for up and coming bands, came from their own curiosity about the music business.  He and his co-founders, all music lovers (Alex had his own underground rap show at Northwestern) wondered,

"How can you find the next big bands, before they become big? "

From there, that led to a company that touts the ability to provide "actionable intelligence for the music industry."

I love that the winning idea came from curiosity and passion first, followed by filling a need in the marketplace.

 

In the third and final posting in this series, we'll look at what every entrepreneur must learn to do if they want to be successful: adapt.  How do entrepreneurs adapt when things don't go as planned?

What an Entrepreneur Looks Like, Part 1

Lately, I've been thinking and writing about entrepreneurship. Not so much in terms of how I define wisdom entrepreneurs in this blog, but in terms of individuals taking the journey of building something from nothing, to meet a need.  

It's fascinating to see the different faces.  This is the first of three posts about entrepreneurs who I've had the pleasure of talking to this year. 

Are entrepreneurs born or made?  Either way, I love it when I can see the natural talent early on.

"Emily" is starting sixth grade.  I first saw her hand drawn catalog of services and products, with the title, "Mini Mag", on the food table at a friend's summer party.  Her mother and father were not at the party, but instead another friend, Gina, had brought her.  Gina has been getting together with Emily once a week, serving as a mentor.  Emily is a quiet child who soaks up everything.  She's the sort of child who could easily be forgotten in the corner, yet the wheels are constantly turning in her mind. I gave her a few bits of advice--listening for the pain point of your customer and identifying profit margins.  She got it right away.  

When I looked through Emily's Mini Mag, I was struck by several things:

•   She had detailed a range of products and services, from foot rubs and manicures, to cards for any occasion, to "Claymania" animals and flowers made from pipe cleaners and beads, to small posters and finger puppets. She had samples of some of her products on display.  I could see in her catalog the answer to the question, "What can a 10-year old make or do that would have value for someone else?"  This was much more than a typical lemonade stand.

• Throughout her catalog, she had included selling techniques that are taken for granted in the adult world, but no one expects a kid to come up with.  Things like a frequent buyer program, coupons for buy one, get one free and grouping items by season (e.g., Father's Day and Fourth of July.)

• And finally, her customer service mindset came through in small phrases throughout the catalog, from "Have a relaxing day" on the spa services page, to "We will try to amaze you with our cards" on the cards page, to offering to make custom orders on the Father's Day page.  I particularly liked when she listed on the Claymania page things she could make, finishing with "Anything your mind desires."

You can't teach kids this stuff.  Sure, they can see it around them--on television commercials and store displays.  But to have the inspiration, motivation, and imagination to apply what they see is another matter.

If Emily is doing this as a kid, what will she be doing in college or afterward?  I talked to Emily's older brother, who just graduated from high school, about his sister's entrepreneurial endeavors. His face broke out with a smile and he said, "Yeah, I don't know where she gets it. It's crazy."  I'm sure he's been seeing for years what I was just discovering--an entrepreneur in the making.

I'm convinced that how quickly she finds success and to what extent will depend on opportunities, encouragement, and mentoring along the way. 

In my next post, I interview Alex White, a 20-something CEO of a company that was named to Billboard Magazine's 2010 Top 10 Digital Music Start-Ups.