March 11th, 2014
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Recently I had the chance to listen and participate in a discussion regarding an entrepreneurial ecosystem embedded within a particular culture. The point was made that there is a need to separate start-up culture from the larger culture. I believe this to be true as you consider start-ups and entrepreneurs in the business of creating new social institutions. The larger culture isn’t used to new things and so you need a different kind of environment that is supportive. Basically, entrepreneurs are responsible for convincing the world and the people in it that the start-up has the right to exist and that what it does is valuable enough to support with various forms of legitimacy. It helps to have a subset of that world to help ease into the larger one.
The conversation got side tracked with what to do about it (what entrepreneurs move straight to action?). But I believe we jumped too quickly to supposed solutions without fully understanding the problem at a deeper level (also not an uncommon thing for entrepreneurs to do).
A culture is a bunch of shared underlying beliefs about what is important and appropriate that shows up as norms or practices. In a start-up culture I feel like how failure is seen and handled is the gauge for how supportive a culture is to entrepreneurial growth. In healthy start-up cultures failure is valued experience or a badge of honor. Other entrepreneurs recognize that failure is the expected result for most of us. The individual entrepreneurs celebrate the effort and courage regardless of the outcome.
In the talent market of a successful start-up culture it means employers or better yet other start-ups recognize that an incredible set of skills has just come available that can crush it for the next little while. Unhealthy start-up cultures avoid hiring former entrepreneurs for fear that they’ll leave again.
In the right kind of culture that is exactly what you want anyway. You want that entrepreneur to leverage those costly lessons and contacts in the next venture as soon as possible. The measure of a successful entrepreneurial ecosystem may very well be how quickly an entrepreneur becomes a part of another start-up.
Unfortunately, if that isn’t something we are currently looking for and so what happens is a gradual and often silent departure from the community to avoid the shame of failure and the awkwardness of no longer belonging. If we continue to have more entrepreneurial events as our solution to building a start-up culture then at least take the time to scout for talent and ways to help each other. As we make that our focus in our respective start-up communities we’ll begin to focus on the important things that underpin a great start-up culture.
December 15th, 2013
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Last night I was helping my son with some English homework that involved a kind of definition map that he was supposed to use with his vocabulary. The definition map requires that you give examples, non-examples, and describe the properties of the word besides the actual definition. We found verbs were a lot harder to conceptualize than nouns. This activity caused me to reflect on the word ‘entrepreneurial’. I recently reviewed a book that advertised entrepreneurial quizzes. It turned out to be nothing more than a career interest tests with the word ‘entrepreneurial’ slapped in front of each section.
This is not an uncommon problem since being an entrepreneur or entrepreneurial is en vogue. Established businesses are entrepreneurial, leaders are entrepreneurial, and apparently even accountants can be entrepreneurial. It definitely fits into the current business buzzword vernacular. What does entrepreneurial finance mean anyway? Does it refer to finance done by an entrepreneur, a financier doing entrepreneurial things or something else? What is so different about entrepreneurs that it has created this additional adjective?
Often entrepreneurial is used in place of the word innovative, inventive, or creative. However, these are different things. Creative is the use of imagination to create something unique. Inventive is the creation of a new thing. Innovative is using new and old things in new ways usually to solve a problem. However, entrepreneurial is more than that. It solves a problem while making money. This situates the definition in the business world but still requires further clarification.
Google’s top result is a nice big definition but I don’t understand how “taking financial risks in the hope of profit” is different than what any other business person does? This definition is illustrative of the view that start-ups are just smaller and newer versions of large companies. I won’t bemoan what Mr. Blank has so eloquently described in Why the Lean Start-Up Changes Everything. The point is start-ups are about learning what works before scaling and optimizing. That learning function is a key; learning in uncertainty when there is no one right answer or way of doing things. We’ll cover more in just a second.
My definition of entrepreneurship or entrepreneurial is functional allowing people to be entrepreneurial one minute and normal the next whether you are inside a corporation or part of a start-up. So what is the function of an entrepreneur? What do they do? Well, from an economic standpoint they reduce uncertainty and make a profit by doing so. Now when I say uncertainty I am using economist Frank Knight’s version of the unknown unknowns that don’t have probabilities attached to them. Any time someone seeks to reduce uncertainty in executing a business model they are entrepreneurial. The uncertainty may lie within the different business model components such as the technology, market, or even the execution (e.g. franchisees or copy cat firms).
To be entrepreneurial is to reduce uncertainty in the execution of a business model in ways that are profitable. This happens through vision, action, and learning. Most uses of the term are used incorrectly in the context of risk rather than uncertainty which is what regular business is about and what comes after the entrepreneur has done their job.
April 30th, 2013
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Just as a follow up to the previous post and to get back into the swing of things. So a couple of obvious confirmation of other tips that have already be given by other experts. You’ve got 2 weeks. If you can’t get a significant portion of your goal funded then any future onlookers pass the project over assuming that it is unlikely that they will get the rewards promised or that it isn’t worth it. On a related note make sure you set realistic goals-not realistic to you but to others. Social media is a great avenue to generate buzz as are ask emails.
Other things I had never before supposed include bad metrics, market test, alpha or beta customer identification. So I was using this as a market-product fit largely and was unimpressed by Kickstarters back-end metrics dashboard. I could basically see how many started to watch the video and how many watched the whole thing (so does that mean if they stop with 10 seconds to go it doesn’t count as the whole thing?). I wanted to know about who was interested and if they watched the video before the chose to donate or not. A word to the wise try to use a bit.ly or run it through your own website to get better numbers. I was able to interact with those 1st customers pretty well and I did end up running a few ads on Facebook and Google Adwords to get an idea for how much a customer acquisition might run and also use LinkedIn to target potential future acquirers or distribution partners. Facebook was cheaper but didn’t drive as much traffic as Google Adwords.
Things I wish I would have done: A better job on the video. Better prep work-meaning create some press releases for local media and related bloggers. The feedback I received was that people knew of others that had the problem I was solving but just didn’t hear about it or because of the fashion-nature of the sandals people wanted custom colors. I should have perhaps used the project as a forum for color preferences as well. I don’t think I’ll continue this particular project but a great learning experience.