The Gorilla in Your Market

The Gorilla in Your Market

General Business

This is that 800 lb gorilla in your market.  You think you have a better product and can adapt more rapidly than he can.  You just need a small piece of his territory and the food that goes with it.  You think he won’t even notice for a while and, when he does, he’ll want to buy you out for big bucks and make you a young millionaire.

Just remember . . . he didn’t survive this long, weigh 800 lbs, and be the strongest one in his market by accident.  He will know about you earlier than you realize because he has resources that do nothing but protect his territory.  He will allow you to feed from some of the food scraps in his territory, not because he doesn’t know you are doing it, but because it isn’t worth his time to stop you.  If, however, you begin to move deeper into his territory and partake of his primary food sources, you will get his attention.   Should that happen, he will test you to gauge whether you are a threat.  Are you passing through or trying to stake your claim.  He can’t maintain control of his territory by allowing you to exist unimpeded.  If he does, there will be others and he will lose control.

If you aren’t a threat at the moment, he may leave you alone.  If he believes you are a threat, here are the some of the possible outcomes.

  1. He could partner with you – Keep your friends close and your enemies closer.
  2. He could buy you out – This could be good or bad.
    1. Big bucks and retire to the beach!
    2. Small bucks but enough to start your next BIG IDEA.
    3. Moderate bucks and you stay on to develop products for the 800 lb gorilla. Did you start your own company to work for someone else?
    4. He buys you out but leaves you alone to do your own thing and share the revenue. Benevolent Dictator.
    5. By the way, if he buys you out he may integrate your product into his product line (making you very proud and giving you bragging rights), or he may monkey around with it (following the theme) until it bears no resemblance to the original product, or he may just bury it to keep a competitive product from ever seeing the light of day.
  3. He sends his protectors and enforcers (otherwise known as lawyers) after you to make it difficult for you to survive. He’d rather force you to leave voluntarily so as not to create an uprising in his territory.
  4. He eats you and leaves your carcass on display to dissuade other would-be competitors.

While the product development, team building, and early success of a startup can be great fun, ego boosting, and positive, success in business typically does not come without experiencing the brutal realities of the free market.  It is a jungle that will test your will to survive, your values and morals, your relationships, and your confidence.

THE TAKEAWAY – I tell you this, young entrepreneurs, because I want you to be ready for the challenge.   Brutal honesty, focus and preparation will get you through it.  It helps to have a warrior mentality about these things.  Stay prepared mentally and physically, let the mission keep you motivated and positive, have a strategy but be prepared to abandon it and craft another depending on the battle field situation, trust your team, and do whatever it takes to live to fight another day.

Entrepreneurship vs Major League Baseball

Entrepreneurship vs Major League Baseball

Inspiration

Working with first or second time startup founders, I’ve begun to compare their definition of success to hitting a baseball in the major leagues.

Many sports pundits have stated that hitting major league pitching (90 + mph fast balls) is possibly the most difficult feat in all of sports.  It takes .4 seconds for a 95 MPH pitch to travel 60 feet to home plate. The batter has to determine the rotation of the ball and velocity in the first 12 feet.  From 12 to 30 feet, .14 seconds, the batter must decide if the pitch is hittable.  This leaves him approximately .2 seconds, near the limit of human reaction time, to swing the bat.  A variance of a fraction of a second or a fraction of an inch can be the difference between a hit and a called strike, foul ball or grounding out.  In the time it takes a human to blink, a 95 MPH fastball will travel 48 feet.  Yet, major league batters expect a hit every time they go to the plate.  That belief, despite the odds, is what gives them the courage and confidence to be successful.  Even when a batter fails, he learns something about the pitcher that increases his odds of success the next time up to bat.  In the pros, a batting average over .300 in a long career can land you in the Hall of Fame.  Ty Cobb, arguably the greatest hitter ever, had a lifetime batting average of .366 over a 24 year career.

What if you failed 7 of 10 times you tried something?  In baseball, only the best hitters in the game get a hit 1 out of 3 times at bat.   In addition, if you hit the ball only 1 out of 4 times at bat, play great defense, make clutch plays, and have a long career, you can still make the Hall of fame.

The point here is that every young entrepreneur aspires to hit it out of the park their first time at bat.  Like baseball players, it takes that kind of bold approach and confidence to even have a chance of success.  The more likely scenario is that an entrepreneur will fail far more that they succeed.  However, if you learn from your failures and continue to improve your skills, you can have a great life as an entrepreneur.  Would you consider yourself financially successful if you started 10 businesses over a 40 year period, failed at 3 of them but didn’t lose too much money, had mediocre lifestyle businesses with 4 of them, and liquidity events with the other 3 that yielded a net income of $7-10M? I would.  In addition, what if that journey provided you the opportunity to meet lots of interesting people, travel the world, help others, and bring your family and friends along for the ride?  Now that’s a successful life.

THE TAKEAWAY – Young Entrepreneurs – Expect to hit a homerun your first time at bat as a startup founder, but don’t be too disappointed when it doesn’t happen.  Remember, businesses fail, not people.  Learn from the failure, nurture your contacts and mentors, continue to improve your technical and soft skills, and keep looking for that next GREAT IDEA.  Entrepreneurship is a journey, not an event.

Tech Skills Build Products, Soft Skills Build Companies

Tech Skills Build Products, Soft Skills Build Companies

skills

I few weeks into the ARK Challenge Accelerator in late 2013, Joshua, our teen entrepreneur, creator and cofounder of Overwatch (now called Battle Map), went to his first real business meeting with a branding company. The branding company guys were familiar with the product space and were enthusiastic. Joshua was psyched about the meeting because it was the first step to legitimizing the product and he knew that branding would be a key to success.

When I spoke to Joshua after the meeting, he was still pumped up. He described the meeting as a success. The branding guys were very engaged and already throwing out ideas. Joshua could not have been more satisfied with the meeting. He repeatedly said, “Dad, they were so excited to work with us”.

As I waded through the enthusiasm I began to ask questions about the meeting. “So who will be in charge of your project”, I asked. “I’m not sure”, replied Joshua, “We spoke with Mike (not his real name)”. “Ok, what are they going to produce for you”, I inquired. “Well, we talked about a logo, branding materials, business cards, website . . . you know, all the stuff we need for branding”. I could see where this was going, so I continued. “When will they deliver all the branding stuff”, I asked. “They said it would be a few weeks and they’d let us know”, said Joshua. “They were really excited, Dad”, he added. “And what was the cost estimate”, I inquired further. I was pretty sure I knew the answer to this one at this point. “They said they would let us know, but it wouldn’t be much. They were really excited to work on this project”, he said.

When this interchange concluded, I was not happy. How could anyone go to a meeting with a vendor and come away having no idea what who was in charge, what they were going to deliver, when they were going to deliver it, and how much it would cost? Baffling. How could Joshua not know to ask these questions?

Easy . . . he was seventeen and no one had taught him about project management, running a meeting, or the key elements of business communication. Sure, he communicated well for his age and he could pitch with the best of them, but these other skills were not intuitive. Thinking about it later, I probably didn’t acquire that knowledge and experience until I was in my late twenties. Some say I’ve still got a ways to go.

This one was on me. I just didn’t realize that, as bright was Joshua is, there is so much in the business world that he has not been exposed to and can’t learn from YouTube or Linda.com. These things are learned through instruction, practice and experiential learning.

I’m sure that my frustration was apparent as I told him to never leave another meeting without knowing Who, What, When, and How Much. I felt like I had let him down by not giving him some guidance ahead of time. However, it did serve as a wakeup call for me as a business advisor to him and others, to never take these so called “soft skills” for granted with young entrepreneurs.

THE TAKEAWAY – Young Entrepreneurs: Learn and practice the skills of communication, project management, and decision making just as you do your product development skills. Technical skills build products, soft skills build companies.

A Mentor’s Role in Managing Risk

A Mentor’s Role in Managing Risk

Mentorship

Recently, for about 30 seconds, I witnessed something that reminded me of the role of startup mentors.

I was leaving the library in Fayetteville, Arkansas and noticed a mother and her young daughter walking along the natural stone that lines the beautifully landscaped flower beds outside the building. The young girl appeared to be around three or four years old. She was walking along the rock boundaries of the elevated flower beds. Her mother walked along beside her, just below on the ground, with her arms stretched toward her daughter just in case she started to fall. I was struck by the fearlessness of the young girl. She seemed undaunted by the potential risks of walking on a narrow, elevated ledge. Her mother mitigated the risk of injury by walking just below her on the ground, allowing her daughter to experience what it was like to be that far off the ground on a narrow ledge. Because of the trust the daughter had in her mother, she did not fear falling.

This reminded me of entrepreneurs, especially young ones, who don’t know, or choose to ignore, the risk of failure. They charge ahead to save the world, create the next great product or discover something the rest of us don’t know exists, without regard for their own personal or financial well being. They do these things simply because they believe they can and failure is really not even part of the thought process. We could all use a dose of that way of thinking. It’s liberating.

The mother reminded me of what good mentors are supposed to do for entrepreneurs. If an entrepreneur is lucky, he/she will have at least one really good mentor early in their journey. The mom did not panic when she saw her daughter in that situation. A worried reaction may have startled the daughter and caused her to fall. Instead, she let her daughter have the experience, guided and reassured her along the way and made sure that, if she did fall, someone would be there to break her fall and help her up . . . to try again. As a mentor to these young risk takers, I believe that is exactly what we are supposed to do. Stay close, provide our best guidance, let them learn through experience which will include failure, and don’t let them fall so hard that they don’t get up and try again.

As the father of a young entrepreneur, I experience the phenomenon described above with the mom and daughter, in a different way, every day. Joshua’s confidence and fearlessness are simply part of who he is. As his parent and business mentor, I have chosen to embrace his fearlessness, but put boundaries in place to limit his risk of failing so horribly that he’s afraid to try again. He has seen that I am not afraid for him to pursue his ideas and that I have confidence in him. I believe this further bolsters his fearlessness. Like a good mentor, I walk just a step behind, in case he starts to fall off the ledge.

THE TAKEAWAY: Young entrepreneurs – Be fearless and seek out good mentors for support. For, families, friends and mentors of these young startup leaders – Support their trapeze act but be ready with the net.

Mentors vs Advisors – An Important Distrinction for Young Entrepreneurs

Mentors vs Advisors – An Important Distrinction for Young Entrepreneurs

Mentorship

It has been challenging, from the dad perspective, to find the best advisers and mentors for Joshua, our entrepreneurial son.  It is important to distinguish between mentors, those with whom the young entrepreneur will have a recurring relationship, and advisers, those that will provide specific advice or connections on a topic of interest.

I have made it more challenging by establishing certain criteria for the folks I’m willing to connect Joshua with as potential mentors.  They not only have to be subject matter experts but also must be, to the best of my knowledge, honest people of character who will have Joshua’s best interests in mind.  That is a tall order and serves to limit the pool of potential contacts.  Although challenging, this follows our principle of surrounding oneself with talented people who share your values, will hold you accountable and willingly share their knowledge.

One might ask, since I have many years of experience as a business executive and consultant, why does he need mentors other than me?  Two reasons:

  1. Despite my level of experience in life and business, Joshua isn’t so sure that his dad is that smart. Afterall, he has seen me do and say some bonehead things. This is not unusual for any teenager and it will likely be that way until he is in his mid 20’s.  I’ve had to accept that and focus on helping surround him with other mentors.
  2. He has to be able to find his own mentors and advisers in the long run and this is a way to help him get started early and, hopefully, understand how important it is.

Overprotective?  Maybe.  Joshua tends to think so.  However, young entrepreneurs generally tend to think they know more than they do, can handle more than they actually can, and are invincible.  This is especially true of young entrepreneurs.  They have to be this way to some degree to have the courage and drive to do what they do.  I give that courage and drive a standing O.  However, this bold, confident approach, coupled with a lack of life experience, makes them vulnerable to folks who may want to take advantage of them in some way or who are oblivious to the fact that they are dealing with a young, still impressionable person despite the fact that they are doing business in an adult world.  This concern diminishes over time as the young entrepreneur establishes and internalizes his/her own criteria for those with whom they choose to do business.  I’ve already seen this happen with Joshua.  He does a pretty good job of figuring out the type of person with whom he is dealing.

Ultimately, the goal is to guide Joshua in how to observe and read people so that he continues to make good decisions on his own.  He has done a great job of this regarding personal friends.  That has certainly helped me feel a bit more at ease regarding his decision making in this matter.

I do not have such stringent requirements for advisers who provide specific advice or connections on a particular topic.  Since these encounters are typically brief and infrequent, I tend to be a bit less concerned about their depth of character.  Exposure is limited since the contact is more of a transaction than a relationship.

I’ll leave you with this.  Joshua and I were in a technical discussion one day when he said something that prompted this analogy.  Surrounding yourself with good people who help hold you accountable, helps insure that your moral compass works properly, which in turn, helps you make better life and business decisions.  Surrounding yourself with folks with less than honorable intentions can cause your compass to malfunction and get you off your path.  So far, Joshua’s compass seems to be working just fine and he seems to be catching on to the idea of finding and nurturing mentors.

Time will tell.

THE TAKEAWAY:  Mentors are critical to entrepreneurial success.  Finding and cultivating relationships with true mentors takes developing criteria for mentors, searching diligently for the right people, and nurturing those relationships.  Having good mentors will pay dividends beyond measure.