— Clint’s Notes —
How to Think Like an Entrepreneur
by Philip Delves Broughton
Caution: This on gets a little…ranty.
“Paul Graham, the founder of Y Combinator, one of Silicon Valley’s entrepreneurial incubator programs, says the underlying reason most startups fail is that they become demoralized.”
Hearing the word “No” tends to take the wind out of your sails. Hearing it a bunch can be a huge gut check. It may begin to feel like no one believes in what you’re doing. You may even start to feel lonely and start questioning if you’re crazy. That’s why it’s so important that you deeply care about what you’re building. If what you’re building truly helps, you will eventually find your audience. Finding them may take dedication and long hours. But, I always say, “Hard work is the minimum requirement.”
Your level of optimism WILL be tested when starting a business and working to get it off the ground.
“The economist Daniel Kahneman writes: The emotional, cognitive and social factors that support exaggerated optimism are a heady brew, which sometimes lead people to take risks that they would avoid if they knew the odds. There is no evidence that risk takers in the economic domain have an unusual appetite for gambles on high stakes; they are merely less aware of risks than more timid people are.”
I’d argue that crazy folks like me who set out on their own are VERY aware of the risks. The very real presence of financial failure is one of the biggest motivating factors in determining how hard you’re willing to work to minimize that risk.
I have this daydream, day nightmare?…Daymare? Anyway, in my head I picture my kids going to the fridge, opening it up, finding nothing to eat. They then turn to me and say, “Daddy, we’re hungry.” THAT is just one of the horrifying thoughts that push me toward working hard to make sure that never happens. I’m not going to tell you about the other awful thoughts that spook me into working hard, you ain’t my therapist.
“You get to decide how to work, what to work on, and how to divide the rewards.” This is one of the best and worst things about being your own boss. If you win big, good job. If you don’t, the only person to blame is in the mirror.
My wife and I have talked about how ruined we’ve become to the rest of the working world. We have such little tolerance for poorly led and operated businesses that to work for someone else would drive us crazy. Here’s a distinction you’ve gotta make. Kacey (my wife) works with people, not for them. I work with clients, not for them. See the difference? We laugh and say that someone would have to offer us an obscene amount of money and authority for us to ever work for someone else.
Once you taste the freedom of calling the shots for yourself, it’s very difficult to give it up. On the other hand, some folks are more comfortable with someone else calling the shots. The world needs folks who’d rather show up, do a job, go home, and do it all over again the next day. That just ain’t me, nor is it my wife.
“Entrepreneurship is a powerful means of arranging life to enable one’s fulfillment, and it is this ineffable opportunity which colors people’s view of its risks.” Daniel Kahneman writes on, “When action is needed, optimism, even of the mildly delusional variety, may be a good thing.”
Yes, It’s a very good thing. I’d rather be a mildly delusional optimist who took the risk to work for himself, rather than a rat chained to a computer monitor getting my fluorescent lighting tan on. Now, Mr. Kahneman is great, go watch his TED talk.
Howard Stevenson, a professor at Harvard Business School defines entrepreneurship as: “…the pursuit of opportunity without regard to resource currently controlled.”
Um, no Howie, I have a huge amount of “regard” for the “resources” I currently control. In fact the more “regard” I have for it the more careful I am about making business decisions. Especially when it comes to the opportunities that I create for myself. I have tons of ideas, almost all of them are crap. The small number of ideas I more forward with are carefully considered and are pursued non-fatally.
What!? Non-fatally, what does that mean Clint? I do things with cash. Cash that I have in the bank. Doing so allows me to try new ideas from a stable financial platform. It also means that I don’t try things that would leave the bank account completely empty if the idea fails. Because if the idea fails, I’m not financially sunk. Nor am I stuck owing money to banks or other financial institutions.
But, but, doesn’t this mean you’ll miss out on some opportunities!?!? Yes, yes it does. Oh well. If I have to use debt to do the idea, the idea probably isn’t that good anyway. What this means is that I grow slowly. I grow solidly. I grow with a solid cash platform under feet so when I fail, I don’t fall very far and don’t endanger my ability to provide for my family.
Some “entrepreneurs” find my perspective untenable, and that’s just fine. It’s a free country with plenty of space for folks like Howard Stevenson. But, I have no investors, banks, or credit card companies breathing down my neck to pay them. If I have to grow a little more slowly, to have the peace that comes with having no one to answer to, then I choose slow and peaceful. And remember kids, slow and steady wins the race, every time I read that book. That’s the wisdom of the tortuous for ya.
“If you can find your customer’ pain and heal it, how you do it and how much you charge will scarcely matter.”
That’s an idea I can get behind! If their pain is great enough, they’ll pay you to fix it. But, some folks are comfortable with their pain. That’s fine, all that means is that they aren’t your customer, yet. If they’re just cheap, that’s fine too. Let them go be cheap to someone else. And keep this quote in mind: “If you think it’s expensive to hire a professional to do the job, wait until you hire an amateur.” – Red Adair
“Entrepreneurs must also be many things: thinkers and doers, artist and scientists, lone decision-makers and dependable team-builders.” Having an idea is great but ideas are a dime a dozen. Having an idea and doing something about it is even better. Having an idea, telling folks about it, getting them onboard with your idea, and accomplishing the goal of the idea with their help is where the magic is.
“In 2011, when Bill Gates visited the University of Washington, a student asked him how she could become as rich as he was. Gates said he started out with the goal of being super-rich. ’Most people who have done well have just found something they’re nuts about doing. Then they figure out a system to hire their friends to do it with them.’”
“Money can be a wonderful reward for entrepreneurs. But it’s not the one my one. And to think like an entrepreneur, you need to know what it is you value most and to stick to it whatever distractions come your way.”
I agree with this idea as well. If “getting rich” is your aim your perspective is skewed. It’s the folks that enter the marketplace with a mindset of service that have the highest potential for financial gain. What you value, you protect. Your values are the lens through with you do everything in your business. If you value only money, folks will smell that and keep away. If you value serving, your customers will want what you have to offer and be proud to tell their friends about you.
On why people with more experience (read older) tend to be paid more than younger folks in the same field: “The fact that we tend to improve our human capital (the sum total of our education, training, health and subtler qualities emerging from experience) over time explains why older people are paid more the younger people in most organizations.”
In some cases, monetarily rewarding experience (read: wisdom gained by applying acquired knowledge to the real world of the marketplace) is a requirement to keep good people on your team. However, I believe this principle breaks down when it’s misunderstood as “I should get paid more because I’ve been around along time.” I fully disagree with the latter sentiment.
The question you’ve got to ask yourself daily is, “If I had to hire this person again today, would I?” If the answer is no, set them free to find a more healthy work environment. If it’s yes, make sure you’re doing everything you can to train, guide, and support that person as they serve you and your business.
I refuse to work in environments where the people that stick around the longest get paid more, even long after their marketplace value has significantly declined. To me, that’s a sign of piss poor leadership that I won’t tolerate. Filling a chair for a lengthy amount of time has no bearing on how much pay you should receive. Your pay should be based on the value you bring to your organization, period.
“…process of intense self-observation and self-awareness is vital to anyone thinking of embarking on an entrepreneurial adventure.”
This makes me think of the quote: “The two most important days in your life are the day you are born and the day you find out why.” — Mark Twain
Spend the time to figure out who you are and how you can best help folks. Knowing that will shape everything you do in your business. Do the work necessary to uncover and rediscover what you really care about. Find out what makes you tick and how by spending some time thinking about your strengths. Here are some question to help you get started:
- What are people always asking your advice about?
- What can you do that others find amazing?
- When someone asks for your help, what kind of help do they ask for?
- What business tasks energize you to take action?
- What business tasks drain you?
- What business tasks do you avoid?
- What do you find yourself doing/thinking/making when you’re avoiding you’re ’work?’
For more, read How to Think Like an Entrepreneur by Philip Delves Broughton
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