The Fearful Entrepreneur

What are you afraid of? I don’t mind confessing that I have issues with claustrophobia. This manifests when I get inside an MRI machine. Even an open CT scanner gives me the heebie jeebies. My heart pounds in my chest and my blood pressure goes through the roof. I don’t know what happened in the past for me to develop this fear, but it’s a cross I bear. I’ll never forget the time I heard about a poor soul who was exploring a cave and got stuck deep inside – upside down – and no matter how hard they tried, rescuers could not get him out. Within days of that story, I found myself in an MRI machine for 45 minutes. It took every ounce of my fortitude not to completely freak out.

I don’t know of a single entrepreneur who doesn’t experience a fear of something. There is the fear of public speaking, fear of heights, fear of flying, fear of being in social settings, fear of spiders (and snakes), fear of death and a wide assortment of other phobias that we may experience at a personal level. And then there’s what I consider to be “entrepreneurial fears.” Let’s examine a few of them and their antidotes.

  1. Competition“I’m afraid that the competition will overtake my company. I’m also fearful that someone is going to steal my business concept and crush us.” There’s a lot to unpack here. The forward-thinking entrepreneur will see competition as a healthy factor in his or her business life. If we have the right mindset, we can use competition to make us better. How? We do this by understanding exactly what our customers need and want and tool our product or service accordingly. We know that the competition is probably studying the customer in similar fashion – we just have to do it better!
  2. Ideas “My ideas are no good. I’m afraid that I’m just not creative enough to win in this business.” No one knows our ideas better that do we. And it’s not so much about having fresh new ideas as it is our ability to iterate on those we already have – or that someone else has. Look at Facebook for example. Many students of the Facebook phenomenon point out that the company has rarely had a new idea. They simply steal ideas from other developers or companies and execute them better.
  3. Failure “I’m afraid to fail and I’m afraid of what others will think of me if I fail.” This is one of the most common entrepreneurial fears that I’ve heard during my career. Unfortunately, this fear reflects a misunderstanding about what failure is. Too many entrepreneurs confuse “failure” with “defeat.” Failure is simply an unfinished experiment in the laboratory of life. It’s part of a process that we undertake to achieve success. Success is built on failure. Without some failure along the way, how do we really know that we have succeeded in optimal fashion?
  4. Money “I’m afraid that my money is going to run out before I succeed.” There are entrepreneurial stories abound where the founder was down to a triple digit bank balance and somehow pulled a rabbit out of a hat and turned things around. I also know that there are many more stories of businesses that folded when the cash spigot turned off. In the entrepreneurial world we learn how to improvise. We learn how to stretch a buck. We barter and trade. Better yet, we always have a Plan B in our hip pocket . . . just in case. Having a little bit of the “cash-strapped” fear is actually a healthy thing as long as we use it in a positive way to maintain focus on scaling our enterprise.
  5. Talent “I’m afraid a competitor is going to steal my best people; or my best people are going to walk across the street and start their own company.” Here’s the thing. If we provide the best value for our team, they’ll stick around which is the same philosophy we adopt with our customers. Sure, employees want to be fairly compensated, but loyalty goes beyond pay and benefits. Developing a dynamic culture goes a long way toward talent retention. So does making people feel that they and the contribution they make are genuinely valued. In the companies with which I’m involved, we don’t lock up our team members with long-term contracts or non-compete agreements. Instead, it’s incumbent upon us as leaders to show our team every single day how they are in the right place with our firm.

Being afraid can either be paralyzing or motivating. Smart entrepreneurs overcome fear to propel themselves to great success.

You can also listen to a weekly audio podcast of my blog. What you hear will be different than what you read in this blog. Subscribe on iTunes or wherever you get your podcasts. You can also click on this link – Click here to listen to Audio Episode 129 – The NPS and You.

This blog is being written in tandem with my book, “An Entrepreneur’s Words to Live By,” available on Amazon.com in paperback and Kindle (My Book), as well as being available in all of the other major eBook formats.

Moats

We know from our history lessons that in medieval days, members of noble families often lived in castles. These fortresses were imposing in appearance and have stood for centuries – a testament to their design and construction. Castles were actually built over a 900-year timeframe which in itself is truly amazing. These structures were protected by a wide range of defenses including various forms of artillery, arrows, boiling oil, tar and sewage, and there are even reports of diseased dead bodies being catapulted at assailants. Finally, deep wide ditches were dug around many castles and filled with water, requiring access via drawbridges. In fairy tales we heard about moats being home to alligators, crocodiles and other horrible monsters though it’s doubtful that in real life moats were populated in this fashion.

So what’s your moat? Strange question you ask? I’ve written several times in the past about how important it is that entrepreneurs differentiate themselves from their competitors. In 2007, Warren Buffet was speaking to a group of University of Florida MBA students and had this to say about differentiation.

“I don’t want a business that’s easy for competitors. I want a business with a moat around it. I want a very valuable castle in the middle. And then I want…the Duke who’s in charge of that castle to be honest and hard-working and able. And then I want a big moat around the castle, and that moat can be various things.”

“The moat in a business like our auto insurance business at GEICO is low cost. I mean people have to buy auto insurance, so everybody’s going to have one auto insurance policy per car basically, or per driver. And…I can’t sell them twenty…but they have to buy one. What are they going to buy it on? They’re going to buy it based on service and cost. Most people will assume the service is fairly identical among companies, or close enough, so they’re going to do it on cost, so I gotta be the low cost producer. That’s my moat. To the extent my costs get further lower than the other guy, I’ve thrown a couple of sharks into the moat.”

Thinking about differentiation in terms of a moat is a slightly different perspective than I’ve had in the past. I’ve viewed differentiation proactively and as an opportunity to exploit. Buffet seems to be seeing it from a defensive standpoint – thus his moat analogy. Either way, we get to the same place. There has to be a reason that people want to do business with us beyond our charm and good looks.

I am advocating for a combination of defense and offense with respect to differentiation. On the one hand, I’m looking for products and services that have high barriers to entry. Perhaps this is due to substantial capital requirements; extremely complex aspects to the product or service; maybe it’s a patent; or perhaps there’s a vertically integrated process that is extremely difficult to replicate. All of those factors become the moat. They make it hard for competitors to easily jump into our space and make inroads.

Now let’s play offense. Simply keeping our competition at bay doesn’t ensure success or profitability. It’s what we do inside the castle that really counts. We can sit on a throne, eat rich foods and get fat (dumb and happy), or we can exploit the opportunity we have to function in an arena where competition may not be as intense. This might take the form of developing a premium product, or a marketing strategy that creates FOLO – the Fear of Losing Out. Maybe exploiting the opportunity looks like the streamlining of an internal process that produces even greater profits. The point is that with a moat in place we are able to take our endeavor to an even higher level than ever before.

Differentiating ourselves as entrepreneurs is essential to our success. Doing so with a dual strategy of building a moat and exploiting the opportunity allows us to play defense and offense at the same time.

 You can also listen to a weekly audio podcast of my blog. What you hear will be different than what you read in this blog. Subscribe on iTunes or wherever you get your podcasts. You can also click on this link – Click here to listen to Audio Episode 29 – Lost Art.

This blog is being written in tandem with my book, “An Entrepreneur’s Words to Live By,” available on Amazon.com in paperback and Kindle (My Book), as well as being available in all of the other major eBook formats.

moats

Hall of Famer

“Just concentrate on throwing the ball over the plate rather than breaking the sound barrier, and be more varied and selective with your pitches.” That’s the advice catcher Norm Sherry gave to future Hall of Fame pitcher, Sandy Koufax, in 1961. Prior to that Koufax had labored through several seasons of mediocre pitching. Once he solved his control problem he became nearly unhittable striking out 2,396 batters in his relatively short career. Koufax retired from the game in 1967 at age 30. Without a doubt, he went out a winner.

When we think of winning, what comes to mind? Most of us would say that we have achieved the success of victory – that’s the obvious answer. But when we’re asked how we won, the answer becomes a bit murkier. So, exactly how do we win? Do we simply throw the ball harder than anyone else? Or is there something deeper?

As we study great winners in sports and other walks of life one thing becomes abundantly clear. Great winners are fanatical about the basics and fundamentals of what they do. We’ve all heard how the basics and fundamentals are the foundational elements to success. And yet many times we just want to swing hard and hit the ball into the left field seats. The result is that we often strikeout. Lesson #1 – we’ll strikeout less and win more if we pay attention to how well we are executing the basics and fundamentals of our game. In business, perhaps we have enjoyed a winning streak lately. Human nature may cause us to take our foot off the accelerator and start enjoying the ride. What happens then? Maybe our winning streak comes to an end. We haven’t spent the time and energy continuing to cultivate relationships. We aren’t making the follow-up calls that we used to make. And we aren’t doing the homework necessary to understand what our customers really need and want.

Sandy Koufax would be an anomaly in today’s sports environment. He shunned the spotlight and stayed out of the public eye. He loved violin music – it’s said that Mendelsohn was one of his favorite composers. He chose not to chase the money and quit the game rather than risk further injury to an ailing arm. He was his own man which in itself is a special mindset. Lesson #2 – ignoring the noise in the world around us and maintaining our focus puts us on the path to winning.

Winning is seemingly about competing – right? Well, yes and no. If we are out to “beat” someone else the chances are higher that we won’t. In other words, if we become fixated on how to beat the competition we’re really ceding our power to someone else. Why? Because our focus has shifted away from what we need to do to execute in the necessary fashion, and we’re now conjuring a methodology that we think will give us a competitive advantage. Unfortunately we’ve forgotten that the way we win is to ignore the noise around us and execute our game plan in a flawless manner. Lesson #3 – don’t allow our competition to dictate the terms and conditions for winning.

Zig Ziglar famously said, “You were born to win, but to be a winner, you must plan to win, prepare to win, and expect to win.” I used the term “special mindset” in this blog. The only thing really special is the absolute, 100% core belief that we deserve to win and we will win. But there’s one more piece to this puzzle. We must relax into winning. If our intensity is too great, we can easily deviate from the basics and fundamentals and overcompensate. I’ve seen terrific baseball pitchers that start losing because they are so amped up that they try to “throw” the ball and over-control it, rather than relaxing and “pitching” the way they know how. Lesson #4 – to win, we must believe that we will and we must remain relaxed while doing so.

Winning is a relatively simple formula that involves always executing the basics and fundamentals; ignoring all the noise that is going on around us; playing our game and not trying to beat the competition, and believing without any doubt that we’ll win. Oh, and yes, relax. Putting it altogether ensures that we’ll be Hall of Famers in our own right.

You can also listen to a weekly audio podcast of my blog. What you hear will be different than what you read in this blog. Subscribe on iTunes or wherever you get your podcasts. You can also click on this link – Click here to listen to Audio Episode 6 – A Right Way and a Wrong Way.

This blog is being written in tandem with my book, “An Entrepreneur’s Words to Live By,” available on Amazon.com in paperback and Kindle (My Book), as well as being available in all of the other major eBook formats.

sandy-koufax

Mousetraps²

I don’t want our customers to be satisfied. Put another way, customer satisfaction is not our objective. I also don’t want our team members to be satisfied. There, I’ve said it. I’ll bet you’re thinking that there’s a punchline somewhere in all of this. And yes, there is. But let’s dig a bit deeper before getting to the bottom line.

When we serve others we certainly want them to be satisfied – right? This seems like a perfectly rational objective because we all know what happens when a customer or team member is dissatisfied. So, when a customer (or team member) makes a request, we do our best to satisfy that request. We generally believe that when someone is satisfied they are happy. Here’s an interesting dilemma. Suppose we’ve done everything we can to satisfy our customer; they tell us they are happy, but then they quit anyway. What’s up with that?

One of our companies is involved in managing apartment properties for our own account and for third-party clients as well. I can remember several times over the past many years that a long-time client told us he was perfectly satisfied with our service, only to make a change and hire another firm. We were assured that we’d done nothing wrong and other circumstances stimulated the change. In some cases the client was consolidating the management of all his properties with a national property management firm. In another instance we were told that the client had a relationship with another company and though he was satisfied with our performance, he thought he might do better with the other firm. Naturally there’s a strong level of disappointment when we hear that someone is satisfied and yet they are still making a change. What in the world are we to do?

OK, here comes the punchline. Customer satisfaction isn’t enough. Team member satisfaction isn’t enough. Customers and team members leave even when they are completely satisfied. Attempting to achieve customer and team member satisfaction is a siren song that will lure us into the rocks and sink our ship. Instead, we need to focus on fulfillment. Fulfillment is a much higher state than satisfaction. It’s a concept that’s similar to exceeding expectations but is even more than that. Trust me – you won’t get any help from the dictionary on this one. It says that to fulfill is to satisfy. I think the dictionary’s definition misses a very important nuance here.

Suppose an apartment resident calls and reports that her kitchen faucet is dripping. If our maintenance technician goes to her apartment and completes the repair, then he’s satisfied her request. However, if he goes and fixes the faucet, and then checks a number of other physical elements in her apartment and fixes other items that he finds, then we’re moving toward a level of fulfillment for the customer. Total fulfillment comes when there’s nothing else a customer could possibly want or need, even if he or she hasn’t articulated it. In other words, we’ve anticipated every possible scenario that could impact the customer and we’ve taken all the steps we could to resolve unforeseen issues and create an over-the-top experience. This was what was missing when we lost a client who told us he was satisfied. We had not gone above and beyond to create the over-the-top experience that achieved total fulfillment.

Customers and team members leave or quit all the time when they are satisfied. Usually it’s because they aren’t aware of a better alternative. But when that better mousetrap is presented to them it’s not hard to understand their motivation for making a change. Changing our focus from satisfaction to fulfillment increases the odds in our favor that we possess the better mousetrap.

Achieving fulfillment for our customers and team members requires a combination of commitment, innovation, understanding, vigilance, appreciation and gratitude. Fulfillment is the best mousetrap in today’s highly competitive entrepreneurial environment.

This blog is being written in tandem with my book, “An Entrepreneur’s Words to Live By,” available on Amazon.com in paperback and Kindle (My Book), as well as being available in all of the other major eBook formats.

mouse-trap-helmet

The Enemy?

Evil, dirty, underhanded, devious, conniving, despicable, dishonest, cutthroat, backstabbing, snobbish, arrogant, lying and cheating. These are terms I’ve heard applied to competitors over the last 40 years. Without a doubt I’ve missed some. What emotions are evoked when you think about your competitors? Some entrepreneurs I know have pure hatred for the competition and others display a great deal of fear. Why do we associate such negativity to our competition?

The amateur psychologist in me believes it has something to do with our childhood (don’t all of our issues?). On the playground we engaged in competitive duels involving kickball, dodge ball, four-square and other gladiator-like activities. Losers were vanquished with taunts and teasing. When we were older, competition for relationships with the opposite sex was intense. When a sought-after girl or boy chose someone else, we were crushed and dejected. Fast forward to today and it’s no wonder that we often see our competition as the enemy.

But do we really benefit from viewing our competitors in this manner? Competition is actually a wonderful thing. Let’s look at several of the reasons why.

  • Competition stimulates creativity and innovation. Every day we know that our competitors are working overtime to develop new products or services. To keep from being left behind we do the same. New discoveries are made out of this process that may generate greater profits and capture a larger market share.
  • Best practices emanate from a competitive environment. Let’s face it; we don’t have all the answers. So, observing how others do things and testing our approach accordingly can lead us to implement better systems and processes. Without competition what would be the incentive to improve?
  • An inefficient market is the byproduct of competition. Some competitors are stronger and some are weaker. If every competitor was equally strong how would anyone win? The concept of winners and losers is critical to a healthy yet inefficient market.
  • Hand-in-hand with the inefficient market theory is the opportunity for differentiation. This is good for the consumer and it’s outstanding for the entrepreneur. Why? Because we have the opportunity to create a level of variety that may appeal to more customers. It’s not just about “better;” it’s also about “different.” If every boutique sold the same black dress, doesn’t it stand to reason that a boutique selling a purple skirt might win a few more customers than the black dress sellers?
  • Competition helps to broaden the talent pool. It provides career paths for the workforce into which we as entrepreneurs can tap. We can create cultures where people want to work, giving them the chance to grow and advance their careers. And in the process we get to attract the best and the brightest.

For years we’ve enjoyed good relationships with our competitors. We view them with respect and in some cases, admiration. Other terms come to mind as well; friendship, collaboration, empathy and gratitude. Collaboration you say? Yes, we’ve often referred customers to our competitors when we couldn’t meet their needs and they’ve done the same for us. In 2008 a Maine portable restroom business owned by Jeff Bellino burned to the ground. Who came to the rescue? Bellino’s competitors! They provided portable restrooms, toilet tissue and chemicals so that he could keep going while he rebuilt his operation. Competition is at its healthiest when competitors have each other’s backs in a time of need.

When we embrace the notion of strong and healthy competition we enhance our chances for success. There’s no doubt that competition makes us better entrepreneurs in every respect.

This blog is being written in tandem with my book, “An Entrepreneur’s Words to Live By,” available on Amazon.com in paperback and Kindle (My Book), as well as being available in all of the other major eBook formats.

gladiators

Stick a Hose In Their Mouth

Question: The other day I was making a purchase and I asked the salesperson about another product sold by one of his competitors. He was very disparaging about this competitor. How should talk about a competitor be handled?

Answer: I have come to the point of believing that only if we have competition will we be better. This is true in business and in life in general. Everyone wants to win but does beating up a competitor when talking to a customer really put us in a winning mode and make us better?

When a salesperson makes derogatory comments about another company or its products that indicates that he or she isn’t confident enough in his or her own company’s product to help the customer buy it. Instead, the salesperson must resort to tearing down the other company and its product. I’ve been in this situation many times as a customer. And I can tell you that my reaction was not positive. In fact it is such a turnoff that I may not even purchase the product that the offending salesperson is trying to sell.

If you are an entrepreneur, how do you feel when you read or hear about one of your competitors landing a big contract or succeeding in some other way? Are you angry or are you happy for them? How do you view your competitors? Are they the “enemy” to be beaten into submission? For me, life is too short to constantly be engaged in hand-to-hand combat with the competition. I choose to see people trying to earn a living or even live a passion. I see people working hard to perfect their product or service. Those who view competition and competitors in an adversarial manner also see the world as a zero-sum game. They define the market as finite and believe that success for a competitor means that they are losing something that otherwise might have been theirs. With few exceptions this is a not a pathway to success.

A different mindset could produce much better results. Ray Kroc, founder of the McDonald’s restaurant chain is quoted as saying, “If any of my competitors were drowning, I’d stick a hose in their mouth.” Rather than focus on and react to the competition, it’s much better to focus on the way we serve our customers; develop new and innovative ways to improve our products and services, and improve the way we operate our businesses. We embrace competition to push us to do better and be better. We learn from the things our competitors do better. And we also observe their weaknesses and use this knowledge to avoid the same mistakes.

Healthy competition can be transformed into cooperation and collaboration. When this happens we experience a state of co-opetition. Everyone wins when this state is reached.

This blog is being written in tandem with my book, “An Entrepreneur’s Words to Live By,” available on Amazon.com in paperback and Kindle (My Book), as well as being available in all of the other major eBook formats.

garden hose

Batter Up

Question: I am very competitive and want to win in the worst way. It depresses me when I lose. Are these feelings healthy?

Answer: The world is more competitive than ever before. Companies are competing for customers. Individuals are competing for jobs, promotions, more compensation, better assignments – it never ends. And yes . . . competition is healthy. It makes us better at what we do. It makes us stronger, tougher and more innovative. But this can only happen if we are willing to embrace competition in a positive and constructive way.

How do we embrace competition and why would we want to? It comes down to something I mention quite often – mindset. We can either fear and resent competition, or we can view it as an opportunity for growth. And we know that fear and resentment are negative energy. How then can we win with negative energy? Instead, we can look at competition with an attitude of what we can learn. Moreover, we should take the opportunity to accentuate our strengths and shore up our weaknesses.  

I used to obsess over the competition. I would incessantly study the win-loss records of our competition and try and figure out their every move. When they won and I lost, it was devastating and I would move through a series of emotions from second-guessing myself to believing that they somehow cheated. Finally at some point I realized that I was so focused on the competition that I was failing to focus on my own performance. Could this have been the reason they were winning and I was not? Going forward I opted to create a game plan that was different and began to focus on executing that game plan to perfection. I stopped obsessing about the competition because it was apparent that I was giving away my power when I did so.

As a kid I loved to play baseball. I can still hear the coaches drilling the words, “keep your eye on the ball” into my brain. The analogy certainly fits in a competitive context. Fixating on my competitor causes me to take my eye off the ball. When I watch the pitch, I hit home runs. Today the only reason I watch the competition is to find something I can use constructively to incorporate into my own game plan. And then I hit even more home runs. Batter up.  

This blog is being written in tandem with my book, “An Entrepreneur’s Words to Live By,” available on Amazon.com in paperback and Kindle (My Book), as well as being available in all of the other major eBook formats.