Just Seven Things

Exploring why and how we do what we do, and how we can do it better

Archive for the category “Business”

How to be an entrepreneur

During a talk I gave I was asked about the key lessons that I have learnt from running several businesses. I feel hardly qualified to answer, but I am very clear on a number of aspects:

  1. The cost of understanding your product/service has to be less than the immediately obvious benefit that comes from using your product/ service. People will stay with you (pitch/ marketing message/ website) for as long as their needs being solved are made immediately apparent, are sufficiently significant, and the ways in which your product/ service solves that need are clearly understandable (and the cost of understanding is less than the benefit) [adapted and evolved from SuperConnect]
  2. A CEO should be aiming to only focus on strategy and people development: your head should be 12-18mths hence at first (longer over time), and your heart should be in developing the person better than you. You are the only person in the business whose job it really is to ‘develop the insights/ perceptions/ abilities to detect patterns of change and relate them to your landscape, industries, competition and business’ [adapted from Execution]. You should always be looking to develop the person better than you to be able to take your job. If they don’t yet exist in your company, make sure you hire them. ‘Yes’ or ‘passive no’ people will kill your business.
  3. If the core transactions of your business don’t exist without funding (including your time/cost funding), then your sole focus should be on adjusting your business model to be profitable in its core operation without investment. However well-funded or visionary your plans are, the cash flow monster eats the investment and then chases and kills 99% of its prey.
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Five Lessons for Entrepreneurs – LinkedIn’s Reid Hoffman

Five key business lessons that could serve to help entrepreneurs and other innovators as they look to the coming decade:

1. Look for disruptive change. As you are about to start a new venture, ask yourself these questions: What is becoming possible or necessary that wasn’t possible before?  Is a new product or service able to take over an existing market or create a new market? When I co-founded LinkedIn in 2003, the tech industry was in a deep depression. I looked at all the opportunities created by the Internet and had the idea that eventually everyone would need a professional profile online. This profile would enable them to connect with similar professionals and share news, tips and other information. The development of online professional profiles that people could create and control themselves led to an enormous, disruptive change in the recruiting industry. It provided a way for people to directly reach the best candidates rather than hoping for responses from a listing in the paper.

2. Aim big. Regardless of whether a start-up is targeting a big idea or small one, it will still require the same amount of blood, sweat and tears — so aim big! What is big? It is a new product or service that creates or dominates a significant market. If the market is small or your product is only a marginal improvement over what is already available, you will be taking the same risks but for a much smaller potential gain. I am on the board of a company called Shopkick, which aims to revolutionize retail shopping through a mobile application and incentive program that will enable retailers to attract new and more frequent shoppers. Shopkick founder Cyriac Roeding didn’t think small. He is targeting ALL retail shopping.

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Managing the brain and managing the emotions…

… are absolutely two different things. I was talking with one of my client senior managers with the widest span of responsibility yesterday.

They’re coping with a lot of the things that leaders have to. I started to explain things in terms of suspending a balance between the following areas of accountability as a leader and manager:

1. Being involved in the detail (normally on an urgent/ important basis) sufficient to be able to make an informed decision when called on to do so

2. Maintaining progress on the list of important value-add or change areas that will step change the company’s performance and future success (inc. strategy)

3. Monitoring and maintaining the systems of control over process as well as managing, mentoring and coaching people to be able to run the company tactically and operationally

I realised that the big challenge in this is that you can mentally allocate the focus to areas two and three; area one normally drags you in without your planning. Arguably, area three. is easier to plan for in terms of operational review meetings, 121s, performance reviews and coaching sessions.

But that’s all about the conscious intent as opposed to the reality.

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