Under pressure: are you ready for the stress of entrepreneurship?

It is important to know how you, and anyone you might partner up with in a business endeavor, will react to stress.  The life of an entrepreneur is filled with moments of stress, and the ability to deal with stress, to channel stress positively, is one of the stronger characteristics an entrepreneur can possess.  Uncertainty is inherently stressful.  We’re hardwired for certainty and being in a state of uncertainty puts us in a state of stress.  Running an enterprise is filled with uncertainty: uncertainty of income, uncertainty of success, uncertainty about the long term prospects of the enterprise.  So if you’re unaware of how you will react to stress, you’re not really prepared for running an enterprise.  You need to know how you’ll react to stress so that you can begin the process of replacing any unproductive, unhealthy, automatic stress-reaction behaviors you have with behaviors that allow you to be productive and healthy in moments of stress.  Changing how we react to external stimuli is absolutely possible.  You certainly can’t change the external stimuli, so you may as well try to change your reactions.  If you decide you’re unable to change your reactions, you’re ultimately saying that you’re a victim of your circumstances.  And do you really want to say that?  Do you really want to believe that?  If so, running an enterprise is not for you.  If not, then commit to studying yourself in stress, and then commit to reacting in a more positive, proactive, and healthy way when you’re in stress.  Do that, and you’ll put yourself in a much better position to successfully run an enterprise.

Some tips on body language

I’m always looking for straight up lists of how to do things. And this one is great, with my personal favorite being #18.

18 ways to improve your body language at Personal Development with The Positivity Blog:

18. Keep a good attitude – last but not least, keep a positive, open and relaxed attitude. How you feel will come through in your body language and can make a major difference. For information on how make yourself feel better read 10 ways to change how you feel and for relaxation try A very simple way to feel relaxed for 24 hours.

Let’s get the right world, not the whole world, in our hands

Google calendar on your cell phone
twitter: short bursts of what’s up
imified: your organizational tools on instant messenger
I want Sandy: coming soon – your virtual email assistant

This is pretty cool. I tell you, and people have been saying this for a while without getting their minds around how it’s going to happen, Web, Phone, IM convergence is here and it’s only going to get bigger.

I think the mistake a lot of people in the industry are making is trying to turn a cellphone into a desktop computer, when people really don’t interact with it in that way. People interact with their phones in short bursts. Let me shoot a quick text to someone, let me check the score of the ballgame, tell me when my flight’s delayed. I don’t need my phone to do things that a computer does better. I need my phone to do the stuff it does more efficiently, with more tailored options, and I need stuff that fits the way I use my phone to migrate to my phone.

Web browsing on my phone? Only if it’s a phone friendly web. Email on my phone? Maybe short ones. Reminders on my phone? Absolutely! It’s when I’m away from my computer that I need something to remind me. Automatically sync my phone with all my contact info? All of it, maybe not. Phone numbers, IM addresses, email addresses – absolutely.

What are other things that make more sense on a phone? Those are where some prime opportunities lie.

Wait, Walk or Run: Marketing your Web App

Pretty interesting theory on how and WHEN to market your Web App.  They conclude:

“There are three main strategies then, to market your new web app or site:

1) WAIT list sites should find their niche, enlarge their user base there, then come to the web 2.0 savvy audience to show off their force and attract VC attention;

2) WALK list sites, such as search engines and browser add-ons, can go after that elusive digg frontpage or Read/WriteWeb feature now [Ed: preferably both!];

3) RUN list sites should do everything in their power to get attention from web 2.0 sites!”

Check it out at: readewriteweb.com

Customer service at the kiosk

“You can tell a lot about an organization by looking at its customer experience. Digital user interfaces like websites and kiosks are especially telling, because they combine many aspects of the company – marketing, technology, branding”

An interesting article regarding airline kiosks.

via goodexperience.com

The Realistic Entrepreneur’s Guide to Venture Capital

    Over on Seth Godin’s blog, he sets out 15 conditions you need to take into account prior to trying to get venture capital for your idea.  My personal favorite “Being a little better than the market leader is worthless.”

How to start meetings on time

Lots of interesting tips on organizing meetings. My favorite tip “If you called the meeting, do your %*?@?! job.”

via berkun blog

7 Tips to Increase Confidence

Here’s an interesting read on improving self confidence.  I’m particularly fond of #6

“Remember that you lose out on 100% of the opportunities that you never go for.”

 http://www.topachievement.com/kentsayre.html

Could Detroit use one of these?

From boingboing.net

Co-working facilities for social-hungry solo freelancers

Cool piece in Businessweek about the rising popularity of “co-working” spaces for independent, internet-age freelancers who are burnt out on working from their homes (cons: too isolating, makes you crazy, no work/life boundaries) and don’t want to just work out of Starbucks (cons: too public, not networking-conducive, laptop theft, rising price of lattes). Image above, hatfactory in dogpatch, San Francisco. Snip from story:

Over the past few years, co-working facilities—both grassroots, co-op-like versions and for-profit models—have started popping up across the country and the world, from Seattle to Copenhagen. A co-working wiki hosts pages for dozens of other cities with co-working initiatives in progress. And while the concept of shared office space is nothing new to entrepreneurs, an increasing number of them are signing on and finding that the community-building and networking benefits outweigh even the virtues of a shared fax machine.

In a recent report on the future of small business, the Silicon-Valley based Institute for the Future pegged co-working as a trend to watch over the next decade (see BusinessWeek.com, 1/31/07, “The Face of Entrepreneurship”). After co-working first took off with clusters of free-agent programmers and writers, its flexibility and low cost have also proven a good match for startups unwilling to sign a long-term lease. Because many of these facilities operate on a gym-membership model that doesn’t assign workers to specific desks, co-working is cheaper than most subleasing arrangements. And unlike traditional business incubators, co-working isn’t just for startups with high-growth potential.

The study’s lead author, Steve King, says the increasing popularity of co-working facilities reflects the rise of one-person “personal businesses” as well as a broader fluidity between virtual and real-world communities.

Link to “Where the Coffee Shop Meets the Cubicle,” by Kerry Miller. The online feature includes a neat slideshow of “co-work” spaces around the US and Canada (no photo credits, but I’ll gladly add one to this post if someone provides info!)

Update: Those of you in San Francisco may want to consider swinging by hatfactory for an open house they’re holding this Wednesday, Feb. 28:

On February 28, Wednesday, the Hat Factory Coworking space in San Francisco is throwing its doors open to welcome interested folks who want to give us a try, for free. Come and work with us during the day, from 11 AM to 5:00 PM. Bring your laptop and that manuscript, screenplay, or killer app you’ve been working on and leave the crowded, loud coffee shops behind. We’ll also be cooking a big meal starting around 5pm with free dinner served after 6pm. Come and eat with us! We’ll have a projector set up so everyone can show off their work.

(Thanks, Brad Neuberg)

17 Mistakes Start-ups Make

Got this from a entrepreneur at Bizdom, who got it from here.

17 Mistakes Start-ups Make

 

John Osher has developed hundreds of consumer products, including an electric toothbrush that became America’s best-selling toothbrush in just 15 months. He also started several successful companies, including Cap Toys. He built sales to $125 million per year and then sold the company to Hasbro Inc. in 1997. But his most lasting contribution to the business world just may be a list of screw-ups he jotted on the back of a piece of paper.

 

“After I sold my business to Hasbro, I decided I’d make a list of everything I’d done wrong and [had] seen other entrepreneurs do wrong,” explains the 57-year-old Jupiter, Florida, serial entrepreneur. “I wanted to make a company that didn’t make any of these mistakes. I wanted to see if I could come up with the perfect company.”

 

He came up with an informal list of “16 Mistakes Start-Ups Make”-since expanded to 17-that has been used in a Harvard Business School case study, has been cited in many publications, and has become a part of what he teaches budding entrepreneurs in his frequent university lectures. He also used the list in 1999 when he started Dr. John’s SpinBrush to sell a $5 electric toothbrush that quickly became America’s best-selling toothbrush. In 2001, Procter & Gamble purchased the company from him for $475 million.

 

“I didn’t expect it to actually work like that, but it did,” Osher says. “It’ll probably never happen again. But we made a perfect business, from the beginning to selling it to another company.” Since then, however, Osher has created another product, an electric dish scrubber that he also sold to Procter & Gamble. And he has yet another health-and-beauty product-development effort underway-although he’s keeping the details close to the vest-in which he’ll try again to create the perfect business.

 

To home in on what lies behind the 17 mistakes, Osher told Entrepreneur what they are and how you can learn from them to achieve your own level of perfection.

 

Mistake 1: Failing to spend enough time researching the business idea to see if it’s viable. “This is really the most important mistake of all. They say 9 [out] of 10 entrepreneurs fail because they’re undercapitalized or have the wrong people. I say 9 [out] of 10 people fail because their original concept is not viable. They want to be in business so much that they often don’t do the work they need to do ahead of time, so everything they do is doomed. They can be very talented, do everything else right, and fail because they have ideas that are flawed.”

 

Mistake 2: Miscalculating market size, timing, ease of entry and potential market share. “Most new entrepreneurs get very excited over an idea and don’t look for the truth about how many people will want to buy it. They put together financial projections as part of a presentation to pump up their investors. They say, ‘The market size is 50 million people that could use this product, and if I could only sell to 2 percent of them, I’d be selling a million pieces.’ But 2 percent of a market is a lot. Most products sell way less than 1 percent.”

 

Mistake 3: Underestimating financial requirements and timing. “They set their financial requirements based on Mistake 1, and they go ahead and make a commitment to this much office space and this many computers, and hire a vice president of sales, and so on. Before they know it, based on sales projections that were wrong to start with, they have created costs that require those projections to be met. So they run out of money.”

 

Mistake 4: Overprojecting sales volume and timing. “They have already miscalculated the size of the market. Now they overproject their portion of it. They often say ‘There are 200 million homes, and I need to sell [to] x number of them.’ When you break it down, though, a much smaller number of those are really sales prospects. That makes it impossible to make their sales projections.”

 

Mistake 5: Making cost projections that are too low. “Their cost projections are always too low. Part of the reason is that they project much higher sales. There are also unknown reasons that always come out that usually make costs higher than planned. So on top of everything, their margins are now lower.”

 

Mistake 6: Hiring too many people and spending too much on offices and facilities. “Now you have lower sales, higher costs and too much overhead. These are the things that you see every day in companies that fail. And they all grow out of that first mistake: failing to research the size and viability of the opportunity.”

 

Mistake 7: Lacking a contingency plan for a shortfall in expectations. “Even if you’re realistic in your estimates to start, there are things that happen when you start a new business. Your sales ideas may be no good; bank rates may go up; there may be a shipping strike. These aren’t the result of poor planning, but they happen. More often than not, entrepreneurs just feel that something will come along when they need it. They don’t have contingency plans for it not working out at the size and time they want.”

 

Mistake 8: Bringing in unnecessary partners. “There are certain partners you need. For instance, you often need money, so you’re going to need money partners. But too many times, the guy with the idea takes on all his friends as partners. Many people don’t provide strategic advantages and don’t warrant ownership. But they’re all going to get 25 percent of the company. It’s totally unnecessary, and it’s a mistake. Before people are made partners, they have to earn it.”

 

Mistake 9: Hiring for convenience rather than skill requirements. “In my first business or two, I hired relatives. It was easy to do, but in many cases, they were the wrong people [for the job]. And it’s hard to fire people, especially if they’re relatives or friends. More time needs to be spent handpicking people based on skill requirements. You really need super-skilled people who can wear more than one hat. It just bogs you down when you hire people who can’t do the job.”

 

Mistake 10: Neglecting to manage the entire company as a whole. “You see this happen all the time. They’ll spend half their time doing something that represents 5 percent of their business. You have to have a view of your whole company. But too often, the person running it loses that view. They get involved in a part, and they don’t manage the whole. Whether I do this product or that product, whether I hire somebody, [I consider] how they [will] fit long term and short term in the big picture. Constantly try to see your big picture.”

 

Mistake 11: Accepting that it’s “not possible” too easily rather than finding a way. “I had an engineer who was a very good engineer, but with every toy we developed, he would say, ‘You can’t do it that way.’ I had to be careful not to accept this too easily. I had to look further. If you’re an entrepreneur, you’re going to break new ground. A lot of people are going to say it’s not possible. You can’t accept that too easily. A good entrepreneur is going to find a way.”

 

Mistake 12: Focusing too much on sales volume and company size rather than profit. “Too much of your management is often based on volume and size. So many entrepreneurs want to say ‘I have a company that’s this big, with this many people, this many square feet of space, and this much sales.’ It’s too much [emphasis] on how fast and big you can build a business rather than how much profit it can make. Bankers and investors don’t like this. Entrepreneurs are so into creating and building, but they also have to learn to become good [businesspeople].”

 

Mistake 13: Seeking confirmation of your actions rather than seeking the truth. “This often happens: You want to do something, so you talk about it with people who work for you. You talk to [your] family and friends. But you’re only looking for confirmation; you’re not looking for the truth. You’re looking for somebody to tell you you’re right. But the truth always comes out. So we [test] our products, and we listen to what [the testers] say. We give much more value to the truth than to people saying what we’re doing is great.”

 

Mistake 14: Lacking simplicity in your vision. “Many entrepreneurs go in too many directions at once and do not execute anything well. Rather than focusing on doing everything right to sell to their biggest markets, they divide the attention of their people and their time, trying to do too many things at [one time]. Then their main product isn’t done properly because they’re doing so many different things. They have an idea and say they’re going to sell it to Wal-Mart. Then they say they’re going to sell to [the] Home Shopping Network. And then the gift market looks good. And so on.”

 

Mistake 15: Lacking clarity of your long-term aim and business purpose. “You should have an idea of what your long-term aim is. It doesn’t mean that won’t change, but when you aim an arrow, you have to be aiming at a target. This [concept will] often come up when people ask ‘How do I pick a product?’ The answer depends on what you’re trying to do. If you’re trying to [create] a billion-dollar company with this product, it may not have a chance. But if you’re trying to make a $5 million company, it can work. Or if you’re trying to create a company [in which] family members can be employed, it can work. Clarity of your business purpose is very important [but] is often not really part of the thought process.”

 

Mistake 16: Lacking focus and identity. “This was written from the viewpoint of building the company as a valuable entity. The company itself is also a product. Too many companies try to go after too many targets at once and end up with a potpourri rather than a focused business entity with an identity. When you try to make a business, it’s very important to maintain a focus and an identity. Don’t let it become a potpourri, or it loses its power. For instance, you say, ‘We’re already selling to Kmart, so we might as well make a toy because Kmart buys toys.’ If you do that, the company becomes weaker. A company needs to be focused on what it is. Then its power builds from that.”

 

Mistake 17: Lacking an exit strategy. “Have an exit plan, and create your business to satisfy that plan. For instance, I am thinking I might run my new business for two years and then get out of it. I think it’s an opportunity to make a tremendous amount of money for two years, but I’m not sure [whether] it’s proprietary enough to stop the competition from getting in. So I’m in with an exit strategy of doing it for two years and then winding down. I won’t commit to long-term leases, and after the first year, we’ll start watching the marketplace very closely and start watching inventories.

 

Simultaneously, I will keep the option open to sell it in case I can’t get something more proprietary. That means I won’t sign international agreements that would kill any opportunity to sell it to a multinational. I will make sure that the patent work is done properly. And I’ll try to make sure manufacturing is up to the standards of any multinational company that I might try to sell it to.

 

Another exit strategy can be to hand the company to [your] kids someday. The most important thing to do is to build a company with value and profits so you have all the options: Keep the company, sell the company, go public, raise private money [and so on]. A business can be a product, too.”

Personally, I’ve made mistakes 3, 8, and 10. It happens.