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 Entrepreneurship Insights

October 2014

Welcome to the latest bulletin offering entrepreneurial insights from the Startup Owl. Enjoy and learn. This issue is mostly about the fuzzy business of startup strategy..
Flat and Round
Startups Can Do It Differently

The world is flat and we live in the round.


Thomas Friedman starts his book, The World is Flat, by quoting Christafanu Columbu*, otherwise known as Christopher Columbus, who reported to Queen Isabella that the world was round.


It's nearly ten years since Friedman's book came out and the concept of the flat world, fully connected and with a level playing field is now commonly understood. We take it for granted that the tech support we get in Boston, in the US State of Massachusetts is provided by an outsourced service from Bangalore, in the South Indian State of Karnataka.


Working in a Round World

Not only do we work in a flat world, we work in a round one, too. Working 'in a round world', by contrast with the flattened one, means that we work with people all around us. We're interrelated, whether we like it or not. The depth of our inter-connectedness is, of course, our choice. It's round in another sense, in that our every interaction is like living in Yurt - there's no place to hide.


The round world has profound implications for business. Taking a decision to outsource our tech support to some far off place with different norms and culture, should be based on more than simple economics. Even when the South Indian help desk agent has been given an 'American' name and some coaching in colloquial speech, following procedures and reading text(book) answers can make the investment unrewarding for both customer, agent and the company concerned.


Entrepreneurs Have an Advantage

It's a case of efficiency aiming to be effective and failing miserably. The advantage for the entrepreneur at the early stage of a business is that direct contact with customers and human relationships are not only desirable, but inevitable. Sadly, many startups, perforce begin that way and soon lose themselves to bureaucracy that flows from hiring staff and the temptation to maximize profits, outsourcing left and right, as well as establishing hierarchies and standard operating procedures.


Living life in the round means having a commitment to being personal and honest. Too often customers have to contend with "company policy does not allow me to..." Encouraging or even mandating that all employees behave like a founder, on the other hand, results in people dealing with people in a way that would like to be dealt with. Easy to say, but difficult to do.


Five Rules for Founders

So, how can it be done? It has to be a conscious strategy, inculcated in the acculturation of everyone who joins the firm. The entrepreneur has a conscious choice to make about the way the company is to grow. It may involve creating an employee-owned firm, or getting BCorp certification, for instance, but even then there is no guarantee that employees will live in the round. In the early life of a firm, habits have yet to form, but pretty soon norms will get enshrined in 'that's just the way we do it round here.' Try to avoid that happening by using these five rules for founders to be round in a flat world:

  1. be honest, with yourself and others, openly examining shortcomings;

  2. define what responsibility means in the firm and for individual behavior;

  3. agree how to value real relationships with everyone at work (inside and outside the firm);

  4. measure how you and others model honesty, responsibility and relationship;

  5. check that systems do not contradict standards of honesty, responsibility and relationship.

* Christafanu was the son of a fisherman in Calvi, Corsica, though he was claimed by the Genoese, since at his birth, Calvi was a Genoese possession and when the bankrupt city-state of Genoa ceded Corsica to France in 1768, they absconded with all their records. When in the service of Queen Isabella of Spain, Columbus 'discovered' Amerigo, the Genoese hastily claimed him as one of their own. Why do I tell you this seemingly irrelevant piece of information? Because, for many years I happened to live three minutes from where Christafanu was born and to me it's an important bit of mis-recorded history!


Hmm? or Wow! Strategy
A Compass for
Startup Strategy

Strategy is tough stuff. Richard Rumelt (author of GoodStrategy, BadStrategy) makes it sound easy: undertake good diagnosis, develop guiding policy, and implement coherent action. This is excellent advice, but getting it right has us looking skywards for diagnosis, policy and action, as we bumble through 'ah-ha'... and 'mmm'.


Big words and grand visions pepper failed strategies. Motherhood and apple pie don't crack the code. They're what Rumelt calls bad strategy or fluff. The trouble is that we are all good at bad strategy and fluff. Not least because strategy is a craft not a science.

Seek a Wow! Response

Even if we do achieve an approximate diagnosis, we then have to craft a policy that can be communicated, since no amount of wishful thinking will get us there without commitment from the people out there doing stuff. Many so-called strategies, even well articulated ones cause the recipient to react with a "Hmm...", when what we want is a reaction more like a "Wow!" because the policy is inspirational or sexy. 

A 'Wow' policy can often come over as a "Yep" one, which feels luke-warm. A 'Yep' policy may still get implemented, but probably not with the same verve as a 'Wow!' one. The 'Yep' policy may be less risky than a 'Wow!' one, and while it may be ready to go, at least it will not be scary.


Dare, Mitgating the Risk

If the guiding policy comes over as 'Nah' - that'll never fly, beware. The 'Nah' may also be risky. Risky and scary. I suggest that as you review strategy, you use the compass I have designed (see the image at the top). It will help you with all those inner feelings that strategies evoke - and you will be better able to discern if you are on the right track. It's a visual way of what Peter Drucker used to ask of organizations. He would inquire a) what the organization is now, b) what it will be, and c) what it should be.


Of course the 'Wow!' strategy I hope you will achieve, is more demanding of everyone who has a role in its implementation, because inertia and resistance will bedevil the daring play. The timid strategy will tend to feel more comfortable. 

The trouble is that nothing will ever go quite as planned because we are not in control of outcomes. Things will emerge that look like derailing what we have set as our strategy. If you have done your homework and identified the risks, though, you can mitigate their nefarious effects.


Henry Mintzberg points out, strategy will emerge, whatever we do. So maybe it's better to aim high than to aim safe, hence the body of people, and especially entrepreneurs who are prone to action anyway, who will say 'Ready, Fire, Aim', rather than 'Ready, Aim, Fire'. That's what Lean Startup is all about: fail fast and fail often. Losing can help you win, but aiming to lose certainly won't.


Thanks for reading this issue of Entrepreneurship Insights. If you have any comments or would like help with your startup, do write to me:

Will Keyser
a.k.a. The Startup Owl

In This Issue
Telling Startup Stories: Keep the End in Mind
by William Keyser
Kindle ebook Edition
Make your startup pitch the most persuasive by learning how to tell your best story.

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Look Into the Crystal Ball
Take a look at these ten slides for some of the reasons why.

Make Like Big, Stay Like Small

In the article entitled Flat and Round, also in this issue, I was in essence talking about hi-tech (the flat interconnected world) and hi-touch (the round world where we're in relationship with one another). 

To the entrepreneurs whom I mentor, I say, "Make Like Big, Stay Like Small."

Make Like Big means, even at the moment of startup, an entrepreneur should be on that flat, level world where everyone has access to the Web, the Cloud and the Software Engineer, appearing to clients and other stakeholders as being big. Big in the sense of using the same techniques and processes as much bigger enterprises.

Stay Like Small means, even when scaling the enterprise, an entrepreneur should still live life in the round world, maintaining the humility and respectfulness that characterizes the baby business. Small in the sense of continuing to behave as an individual being.

Your fledgling business has to be pretty ambidextrous to pull it off. If you make like big, it will create expectations among your stakeholders that you have service in depth, when in fact, the founder is the guy who fixes the problem. If you stay like small, the enterprise has to reflect that feel, enabling the newest recruit to come across like a founder.

Buy This Book Now!

"Start a company that is fundamentally innovative, morally compelling, and philosophically positive. Create an aura of authenticity about your startup by carefully crafting your mission and communicating it with charisma and passion." These are words of Bo Peabody, venture capitalist and entrepreneur who has started many companies. He wrote this 50-page book, back in 2008. 


I missed seeing it then and found it via another venture capitalist whom I know. But I recommend it to you now, a) because you can learn its message in a single sitting, b) he pulls no punches about making your own luck and c) w itill re-energise your flagging enthusiasm. Lucky or Smart? Fifty Pages for the First Time Entrepreneur.


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