7 Diseases Killing Entrepreneurs in 2014
I spent the last 12 months of my life working directly with 19 business owners and donating my time to another 150 or so. These companies range in size from a startup that is in the hole to a 25 year old $50m company. Looking back I am surprised how the same things plague entrepreneurs of any size company. Companies that are growing so fast they can’t get orders out to companies that are dying, they all have similar thinking that from time to time hurts their business. I am not saying that all of these people deal with all of these. I am saying that from time to time each of these came up either from the leadership or from the organization. 1. Victim Mentality This is the one disease that I probably have the least tolerance for. When you are an entrepreneur most of the reality that you live in is or was created based on previous decisions that you made. If this is true, I have a hard time understanding how you can play victim when you created the mess. I have a sister, that is a bit of a drama queen, and I purchased her a T-shirt that says, “I brought this upon myself.” I feel like this should be a poster in every entrepreneurs office. Victim mentality is perpetrated when you blame everything on everyone else and you don’t own the fact that if it is your company it is your problem. Let’s cut to the chase here, put your big boys or big girls on. Own your decisions and circumstances. Your decisions largely led to your current reality. Quit bitching. Yes we are all screening your calls because you suck the life out of us. You aren’t as important as you think you are. You have delusions of grandeur. My suggestion is your write 10 ways you're are blessed every night before bed and re-read them when you wake up. Make it your goal to brighten someone’s day everyday.
2. System Fatigue Every business has systems. Even lack of systems is a system. I have worked with businesses that use yellow legal pads to do everything and with businesses who have $500k CRMs. Here is the funny thing about systems or the lack thereof, they are both exhausting. Business changes, clients change, procedures change, integrations change, but for some reason business owners hold up whatever system they have as a sacred cow. “We spent a bazillion dollars on this and we are going to milk the ROI out of it if it kills us.” Ok, die then. Systems need to have some fluidity to remain relevant to your business. Design thinking tells you that you should define your problem, research, ideate, prototype, choose, implement, and learn. It is the whole “learning” part that seems to blow their minds. This is the stage to learn what the system can and can’t do and prepare to improve it. The funny thing is that businesses with apparently no systems and businesses that are rigid with system both experience system fatigue. Let’s assume for a second that entropy can be applied to systems in business. If this is true then you system is becoming less useful and less relevant as you read this. You solve fatigue in your body with rest. Some of your business process need to be laid to rest. Here is my suggestion. Each week find 1 thing that is holding your business back. Make it your goal to fix that problem. Some things may take longer, others less time. The key is that just because you solved it for now doesn’t mean it will stay solved no more than losing weight means you will stay skinny.
3. Algorithmic Gymnastics Let’s be honest, Facebook and Google have us by the balls, or ovaries I guess if you are a female. Hell, Google changes their algorithm 500-600 times per year. I once read that even Google engineers can’t break down the algorithm. The funny thing I experienced this year is many business owners asking how it works so they can use it to their advantage. If you think for a second that you can keep up with either of those algorithm goliaths you are kidding yourself. They will have you doing the splits because you think that will help. Let me simplify each algorithm for you: 1) they are trying to predict what it is you are looking for based on billions of data points. 2) they are trying to make money. Does this sound familiar? Aren’t you trying to meet your clients needs and trying to make money? They are just doing it on a massive scale. I will tell you exactly how to “game” their system. Are you ready? You had better get out a pen for this one. Do something share worthy. That’s it. If you had better products, created better content, told better stories, took better pictures or had better customer service then both of these companies would love you. The more your customers love you the more they love you. They follow the crowd. Why, because crowds have more money to spend. You might have wished 2014 would never have known Miley Cyrus but boy did Google and Facebook like her. Why? She created something people shared. I suggest you follow this meme.
4. Paradigm Stagnation Your paradigm needs to shift. You operate your business based on assumptions that you think are true. They might in fact be true. If you assume that they will stay true, then that is a paradigm. Let me give you some concrete examples.
Ten old assumptions about the web are:
- Everyone uses a desktop monitor.
- Everyone uses a mouse to navigate a website.
- Everyone has high speed internet.
- Each new computer purchased is faster than the old one. Processing power is key.
- Websites are built and left until updates are critical.
- The content is static like a digital brochure.
- The content is produced by the company or an outsource writer.
- The code is proprietary.
- The company, customers, and prospects all have a passive relationship with the site.
- The site is the result of business decisions.
Ten new assumptions about the web are:
- Small screens dominate (iPhone, iPad, etc.)
- Users navigate with multi-touch motions, hand gestures, and their voice.
- Most users access the net thru 3G or 4G.
- Mobile users value battery life over processor speed. (Lightweight & Fast).
- Websites are continually updated/upgraded.
- Content is always changing.
- Content is produced largely by users.
- The code is open-sourced.
- The company, customers, and prospects all have a ACTIVE relationship with the site.
- The data gathered from the site influences and sometime dictates business decisions.
I am sure that these second 10 will go away soon enough. The key is to challenge your own thinking, your own assumptions. I encourage you and your team to define the assumptions you are making and write those down when you are making big decisions. The one paradigm that I see kick most entrepreneurs butts is: business should keep going up or next month should be better. Again, go research entropy.
5. The Trance of Scarcity Scarcity is a powerful social force. Humans have a history rich in killing other humans over the belief that something is a scarce resource. Don’t kid yourself about how dangerous this disease can be. Where I see it manifest itself most often is when it pertains to what competitors are or aren’t doing. “We can’t do that because so and so already has the corner on that market.” Well, they might. So did Myspace and Kodak and Ford. And guess what happened? Little companies came along that said, “Screw it, let’s give them a run for their money.” Now Facebook, Instagram, and Toyota are the Goliath's. See, scarcity or the perception of scarcity narrows your field of view. It causes you to focus. But… you focus on the scarcity. You begin to notice other facts that point to future scarcity and you become entranced by it. So, let’s say you own a little web design company, and in your town there are 5 “big boys” and dozens of little shops like yours. You can’t tell me that there isn’t business for you. Go meet the companies in your city and give them a reason to hire you. Let’s say you are an online retailer and some company in California is everything you want to be and more on Instagram. So? Do your thing, learn from them. I will let you in on a little secret as I have some clients that are “the big boy” globally. Mostly they have no idea what they are doing either. They have just worked their ass off for years all the while believing that there are most customers that they can can serve. So while you are focused on your shrinking market share, they are focused on serving the next customer. Chipotle doesn’t have time to worry about Qdoba who is doing virtually the identical thing. Why? Because they are so damn busy making burritos for all of the people standing in line.
6. Incestuous Marketing That's right, I said the “I” word. Incest. Boom. It is rampant in marketing. Let’s take for instance the 7 million real estate agents in your city. You know why they do yard signs? “Because everyone else does.” Serious. Ask them. I have. Their websites look like their direct competitors. Their tag lines have all of the same childish use of synonyms of real state or homes in them. They learn what to do by looking at each other. And don’t get me started on churches. I know for a fact that churches go to other churches to get ideas on how to do church better. The funny thing is that when organizations do this they become more and more like each other and less and less like the people they are serving. This is bad for 2 obvious reasons, 1) the customer has a hard time telling them apart and 2) they aren’t focused on the customer. Just as in humans, how incest messes up the gene pool, it too messes up business. The capacity for innovation and creativity go down. Genetic diversity is a good thing. Didn’t some giraffes get fed to the lions this year at a zoo because of not enough genetic diversity? Don’t let your business get fed to the lions because it has become a useless inbred commodity.
7. Indebted Servitude So back in 2003 I opened a business with my brother. People loved us. They loved our product. It was awesome. So we did what any good startup would do, we went to the SBA and asked for advice. They told us to get a loan and grow. I could punch the person that gave us this advice. We had no business borrowing money and the bank was stupid to loan it to us. We spent the next 6 years never paying that debt off. I’ll be honest I think I still owe about $8k on that original business debt. I was in service to the bank to pay them money that I should not have borrowed and they shouldn’t have lent. Back in the day mining companies paid their employees less than it cost to live, so then they loaned them the difference and took it out of the next paycheck which in effect kept the cycle going for forever. In my opinion we do the same thing with loaning kids $100k for college and then they have to stay in the US and work off that debt for 20 years guaranteeing that tax revenue, but that is another blog post. In business, be careful to realize that you are cashing in your future potential earnings. Does your business have a savings account? By God’s grace our business is debt free. The money we have in checking is the money we have to spend. Each purchase matters. If we buy it we buy it with the cash we have earned. Yes, this is ridiculously hard to do and it slows down things sometimes. But we aren’t working to pay off the man, we are working because we want the business to be better. Don’t be a slave to business debt.
I could be wrong on all of this. This is coming through my worldview and my business lens. If you think I am wrong, let me know. If I have missed something, let me know. Let’s talk.