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Data, Strategy, Leadership, and Innovation

Category: Start-up Management

Discussion around managing / running a Start-Up

Fixing America Starts With Small Businesses. Here’s Why

I just read an article written by Joan Williams in Harvard Business Review titled “What So Many People Don’t Get About the Working Class.” She discussed reasons the nation is in the political state it’s in, and the reaction the middle class has had after years of job losses and an overarching sense of being left behind.

The article resonated with me because I grew up in a conservative farming town of 8,000, attended a university known for its agricultural programs, and then went on to work at The Boeing Company for five years. I now live in liberal Seattle. I left Boeing to start a company, then worked in technology and management consulting in cities across the world, and now have started another company.

Having spent half my life on one side of the conversation and half on the other, I see entrepreneurs as the ones standing in the middle. What it takes to start, run, and grow a small business requires a multitude of skills, including but not limited to:

  • Managing teams with empathy and understanding
  • Making strategic hiring decisions
  • Building a compelling story to get buyers in the door
  • Following local policies, demographic shifts, and labor issues
  • Keeping a national perspective when it comes to supply chain issues, taxes, and trend shifts

And so many people are impacted by a small business each day, whether as customers, employees, or founders. From an FAQ article written by SBA.gov in Sept, 2012:

“Small businesses make up: 99.7 percent of U.S. employer firms, 64 percent of net new private-sector jobs, 49.2 percent of private-sector employment, 42.9 percent of private-sector payroll, 46 percent of private-sector output, 43 percent of high-tech employment, 98 percent of firms exporting goods, and 33 percent of exporting value.”

Although this information is almost five years old, the significance of small business hasn’t changed much. From stories of Radiator Springs in the Pixar movie “Cars” to popular books like “Hillbilly Elegy” by J.D. Vance, it’s not hard to find insights into the middle class struggle and see how it ties to small business ownership.

In Dr. Williams’s article, she talks about the dream of owning a business and the scarcity-driven fear of feeling left out as blue-collar workers have found it harder to take care of their families, let alone take risks to get ahead.

So what does this mean for you? As a current or future entrepreneur, you have an opportunity (perhaps obligation?) to reach out in your community and help shape our nation in the coming years. The rest of this article contains some suggestions that will go a long way toward undoing the divisive rhetoric and populism facing all of us today.

1. Entrepreneurial viewpoints are contagious, so get to know someone you don’t agree with

Too often we surround ourselves with perspectives and inputs that support what we already believe. As an entrepreneur, you get even less time to take in what’s going on outside of your business, which means it can be harder to invest in a diversity of perspectives. Yet, finding at least one relationship–an actual person, please–that can help balance out bias means you’ll be able to see where others are coming from more easily.

We all want to be heard and valued. As an entrepreneur, you can reflect that balanced perspective with the business community, employees, and customers you interact with every day. Imagine the impact of treating everyone with respect and common understanding. That can begin with you.

2. Focus on employee ownership

Scarcity, fear, and the instinct to survive drive people to make decisions against their own long-term interests. Many people in the U.S. have been feeling increasingly left out of the American dream. They feel left behind and without opportunity.

Creating a path for every employee to own a piece of the business is one way to help counter that. Whether it’s allotting equity in your company or sponsoring employees to start their own ventures, ownership breeds a sense of purpose and pride that can be matched by few other things in a professional’s life. From the pride of owning something, to the additional revenue that can come from the business succeeding, degrees of ownership can help rid individuals of that sense of scarcity.

3. Volunteer for small business workshops and literacy programs

Unemployment is historically low, but underemployment can be a bigger issue for people trying to provide a future for themselves and their families. Not only that, but job satisfaction has been shown to impact everything from health and energy, to community participation and healthy family life.

I’ve had the chance to meet with people all over the world, talking about innovation and discussing people’s goals to create new things. Of the hundreds of people I’ve spoken to, many weren’t happy in their jobs and wished they had the tools or abilities to do their own thing.

Barriers to making a change can include lack of education or skills, inexperience, or lack of knowledge about existing sources of funding. The right mentorship from people who have catapulted over similar obstacles may be part of the answer. Entrepreneurship isn’t for everyone, but equipping more people with a path toward becoming one will help them create their own opportunities.

Furthermore, children of disadvantaged homes often struggle in school due to issues surrounding basic literacy. Those same children often grow up struggling to compete in everyday work environments. Consider volunteering your time to help kids get caught up. It can have a lasting impact and help each child feel like they have a shot at success.

4. Engage with your local government

Local issues lead to national campaigns. This election was won because small-town issues outweighed the opinions of urban populations. Wherever you live, there is a local community where people across many walks of life engage in issues that affect them. As an entrepreneur, you’re a part of that conversation each day, possibly without knowing it. Consider then, how you can take a more active role in supporting initiatives that help everyone succeed. These may include:

  • Fundraising for a new school
  • Participating in a business plan competition
  • Getting involved in ballot measures that locally could have a positive impact on economic growth.

Ridding your community of opportunity scarcity means we’re all better off. It also helps reduce the effectiveness of fear mongering and hate.

5. Stop considering college as the only path to entry

Education is a traditional barrier in professional environments. Yet, I’ve worked with many smart people with only a high school education. Treating college as just one route to success rather than the only one is an important step. You can do this by:

  • Supporting a trade school by volunteering for mentoring, guest speaking, and participating in hiring fairs
  • Advocating for blue collar workers (ex: consider incorporating local fabrication shops into bids for product prototypes vs outsourcing everything).
  • Considering skilled people for employment regardless of their backgrounds

People are feeling a divide, where those with formal educations are perceived as the “haves” and those without are the “have nots.” As an entrepreneur, you may have insights into how to break down this divide within your own organization.

Consider how you might use these approaches in your own community, and leave comments below on other ideas that might help heal our country and world. As an entrepreneur, you’re more equipped than you know to encourage change and help fix some of what is broken in our society.

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3 Ways to Ensure That Your Idea Takes Root

When it comes to ideas, most disappear in the first hour they’re created because bringing something into the world takes serious effort. But no new thing can exist without real determination, struggle, and the effort of multiple people to see something come to life and flourish. Yet, some of the world’s best ideas disappear as quickly as they’re thought of because people shoot themselves down before telling another person what they’re thinking.

The simple truth is that often times our ideas don’t even get past the first handful of people because negative feedback is taken as justification to not do anything with the idea. What should happen of course, is that you take that feedback as a means to improve your idea and continue to iterate til it takes root.

How to do that though, can be easier said than done. Here then, are just a handful of steps that should help:

Tip #1 – Don’t let criticism get to your head

There are many successful people today living exciting lives built on their ideas, who had to fail at getting traction several times before they succeeded at getting their ideas to take off.

  • Akio Morita’s first rice cooker sold fewer than 100 units, because it burned the rice instead of cooking it. You may not have heard of him, but you’ve probably heard of his company, Sony.
  • Walt Disney was fired by a newspaper editor, because the editor felt “he lacked imagination and had no good ideas”
  • During his lifetime, Vincent Van Gogh only managed to sell one painting but painted 800 anyway, during his lifetime.

The potential and ideas were there in each of these people all along the way. These ideas they had just had to either go through several iterations, or wait until everyone around them caught onto the idea themselves. In each case though, these people refused to let the ideas and concepts they had die at the hands of themselves or anyone else they encountered along the way. That’s what separated them from people with good ideas who you and I haven’t ever heard of before.

Just like getting a car out of a ditch, it takes real effort to get your idea moving initially until it takes off on its own momentum. Be careful to not be your own worst enemy, by failing to get the idea off the ground because you weren’t willing to conquer your own fears and insecurities to get the idea on paper and begin sharing it with people, while using that feedback to refine / shape the idea along the way.

Tip #2 – Don’t be afraid to alter your plan of attack

The hardest ideas to surface can sometimes be around questioning something already agreed to, or pushing back on something half way built. The truth is though, that the most difficult ideas to surface can end up leading to the biggest improvements, as those ideas can help reveal blind spots missed along the way.

I’ve worked with companies that have had to choose between incorporating the next idea, shipping the product as is, or pivoting altogether because something drastic changed since the product road map had been put in place. Though it’s never an obvious choice which direction to go, shipping something they knew would be flawed always turned out worse in the end than delaying shipment to get the product right. It’s important to consider new ideas at every stage of product development in order to ensure that the right product ships every time.

Tip #3 – Continue sharing the idea, re-calibrate with user input, and persevere

Only through doing difficult things multiple times does it become easier, and being innovative and driving new ideas certainly is a muscle we must flex multiple times to get better at it. Repeating the process of developing ideas, refining them, and getting those ideas into meaningful outcomes is certainly worth the effort, but will always take effort (either internally or externally). It will also require dedication and determination, but will produce meaningful outcomes each and every time.

You need to always be willing to bring something up and share freely so that your company can continue to reinforce a culture of innovation and collaboration.

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10 Steps to Turning your Idea into a Business

“Your billion dollar company starts with a million dollar product, and your million dollar product starts with a hundred dollar prototype.” – Spark.io Team (http://bit.ly/1e1xkuk)

I think there’s alot of great ideas out there in the world that never get off the drawing board because X gets in the way of Y. Whether it’s finances getting in the way of the prototype, or work commitments getting in the way of reading that book you need to research the topic you want to improve, there’s a world of things getting in the way.

I encourage you to take these 4 steps in mind, and accept that in the time it takes you to read this note, you have the time to take your idea and get it to the next step which you can then justify putting some time and effort behind. For what you’re already paying for (a computer, internet connection, chair) you have all the tools you need to create something great.

Step 1. Open up a word document and describe in 3-500 words write down the problem you think needs to get fixed, and potentially your idea to fixing it.

Step 2. Post that idea online, on a social network, and get people’s feedback on what they think of the idea.

Step 3. Accept your idea in it’s present form isn’t A) the last idea you’ll come up with and B) not the final form it needs to be in.

Step 4. Take that feedback, noodle on it, refine it, and write 500-1000 words on the idea

Step 5. Do research online to see what exists out there already to solve this problem, and how your product might be different

Step 6. Figure out what it takes to bring this product / service to market for as little money as possible. You’d be surprised how much is already out there for little to no money to help bring your product to market.

Step 7. Build a support team that’ll encourage and keep you accountable to bringing this to life. Keep in mind it’ll change 100 times, and ideas are plentiful so don’t worry if you feel like you need a new one.

Step 8. Take the first step in your research plan, fail, learn from that failure, try and try again.

Step 9. Get encouragement, get feedback, get more encouragement

Step 10. Never, never, never give up and keep trying to solve the problem without holding the solution too closely. That solution can look 100’s of different ways, but you only need one solution for the problem.

The risk you’ll face is falling too much in love with a single solution, and spend too much money trying to make it work. If it’ll solve the problem, the product / service will sell to people that need help, so it’s about awareness and feedback to keep making it better – both can be cheap, but will take time so get encouragement to keep working on the right combination of solutions and awareness.

You need money to scale, and help grow exposure, but prototypes and trials are cheap and t-shirts are a nice to have, not a need to have so don’t worry about the thickness of your business cards when you haven’t yet sold your answer to the problem.

An important note on Patents – They are great in theory, but once that idea goes public then it’s an easy step for a larger company to change the idea just slightly and avoid infringement, so make sure you can quickly get funding for the legal support you’ll need to enforce that patent, or keep it un-patented until you’re getting enough exposure and success that you know you’re on the right track with the idea as is. It can take 7+ years to get the patent filed, so focus first on getting the concept to market so you can prove the interest, get the investment, and grow the company while getting advice on when to pull the patent trigger.

A note on Advisors – it’s important to find 3-5 people that have been where you’ve been at before, can help you get to where you want to go, or help steer your idea in the right direction. Start by meeting with professors or community college teachers, that are teaching classes on the subject you’re researching. You can reach out to professionals as well, such as lawyers or financial advisors, and get some simple advise for free but consider bringing them on as advisors in exchange for a small piece of ownership if they’re on board for that. Don’t get too many advisors though, and don’t give away too much of your company or you’ll run into real problems when you have investors getting involved.

 

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