When entrepreneurs say “Risk? What risk ?”

2 09 2009

Businessman walking a tightrope2 articles on how entrepreneurs take decisions made me re-visit how to deal with perceived risk.  The first one “The innovative brain” from the november 2008  issue of Nature and the second one, “into the unkown: How do we get there from here” based on “Marketing under uncertainty: The logic of an effectual approach” in the May 2009 issue of AMA’s Marketing news

In the Innovative Brain, we learn that entrepreneurs, it seems, have a highly adaptive risk-taking behaviour. When there is no emotions involved in the decision, the ability to take high-quality decisions is the same for managers and entrepreneurs alike. But when emotion is involved, when there is a perceived risk for the outcome,  research has found some interesting things.

Entrepreneurs have shown superior cognitive-flexibility performance. The ability to put the decision in different contexts. When combined with some functional impulsiveness, this generates the ability to seize the opportunity so typical of entrepreneurs.

This would explains why sometimes entrepreneurs are “tough acts to follow”…

Now the AMA articles raises a question that I love. “What happens if there is no past to consult ?” which is often the case for a start-up, specially an innovative one.

In the decision process, here again, managers and entrepreneurs differ.

The entrepreneur showed the following tendencies:

  • They started taking action based on what and who they know and the resources they had available
  • They evaluated opportunities based on whether the downside risk was acceptable rather than on the attractiveness of the predicted upside
  • They sought partnerships
  • They embraced surprises and leverage flexibility
  • They focused on activities where they had some means of controlling the outcome

The key for me in all of this is their evaluation based on the downside risk.It comes back to “what are you willing to lose ?” The focus on what they can control makes them move forward faster. The functional impulsiveness mixed with their capacity to leverage flexibility makes for that Ready-Fire-Aim approach, which put them in a quite different time-frame than partners and investors.

I think I would even go further, considering all of this, in the entrepreneur’s mind once the downside is accepted, the risk isn’t worth wasting energy on, it almost vanishes!

Coaches, consultants, bankers, angels and VCs, keep that in mind when you think the individual in front of you acts like a bronco. 😉

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So you think… you are a crazy being an entrepreneur (part 3)

27 08 2009

iStock_000008515543Medium

Oh no, this can’t be happening…

Excerpt from the article from Pam Slim

Square Three: The Hero’s Saga

Description: You whittle down your big list of business ideas to one that appears to be viable. You launch the business. Everything goes wrong. People criticize you. You question your sanity.

Mantra: This is much worse than I expected, and that’s okay

Recommendation: Don’t get flustered. Expect that things will go wrong. Do not beat yourself up when they do. Focus on tweaking, learning from mistakes, and moving forward. Surround yourself with smart people and good support.

——————————————————-

That is the moment when a strong mindset makes a hell of a difference. Be prepared for things to go wrong but don’t “expect” it. Expect things to turn right. You have to carry around the mental image of success. I’m a big believer in the “blink” theory of decision. But for it to work, you have to feed the right brain, the right images.
I also like to add an “affirmation“. Something that will pop-up in your brain, to moment you loose your edge. Something that will keep your mental toughness up. Important because Tough calls are pouring in usually…
Once that image is in place, once an “affirmation” is found. I usually get into…
Getting crystal clear on what you want, what you really really want out of this….
It’s also the time when a regular “brain dump” is in order…
Finally, if things begin to turn sour (It should habe been done in the startup process too…)

What are you ready to lose?
Once you set “what” you are ready to lose, and until “when” you’re willing to play a “losing” game, funny enough, pressure drops. These measurable milestones are trigger points. Think about it once, thoroughly then put them aside.
Think about

  • career
  • money,
  • friends&family
  • your self-esteem.

What is your edge on each of hese topics ?
When you you consider you went overboard ?
Think-decide-act on it!
That way, once it’s done, the dwelling falls behind you, it frees up your mind for more productive thought processes.
If you have the right attitude and the right habits to cope with the risk and uncertainties of those four realms, you will “survive” that particular era of your entrepreneurial life.
As I said in part 1 and 2, keep that Ready-Fire-Aim attitude all the time
Do surround yourself with good people. Play on their strengths. Don’t waste time learning stuff you’re no good at or you don’t like. It’s a waste of time and energy. THIS is not the time! Find people for whom these topics are real strengths (talent and knowledge) and hire them. Be clever about it. Who can you get on your advisory board ? Who said you had to hire someone 40hrs a week. Think about Virtual Assistans, and former CEO\CTO\COO\CFO of large corporation that are looking for just a few hours a week.
Starting up involves lots of iterations (I’ll talk about that in another post).

Be ready





What’s your rituals ?

26 08 2009

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So you think you are a crazy being an entrepreneur ? (part 2)

25 08 2009

4.-I-m-the-king-of-the-world!_imagelarge“I’m king of the world”

Entrepreneurship is quite a roller-coaster ride. Going from the top of the world to the bottom of the sea can happen in a sudden shift, specially in the beginning!


In this second post we’ll see where you are and what to do to prevent sailing a sinking ship

Excerpt from the article from Pam Slim

Square Two: Dreaming and Scheming

Description: Once you get more comfortable with your shift in identity, you begin to brainstorm a bunch of different business ideas and scenarios. The sky is the limit as you imagine yourself as a software genius, media tycoon, or rich inventor.

Mantra: There are no rules, and that’s okay.

Recommendation: Don’t edit your imagination. Run wild and think up new ideas for products and services. Don’t worry if they don’t make sense, or that no one you have ever known has ever been successful at it. The important thing is to brainstorm as many possible ideas as you can and gather lots of data from different sources.

—————–


The coaching:


When you have reached a “closing” with the Just Over Broke market, when your brain is boiling over with ideas, when all you see are opportunities, when all you breathe is freedom, sit down for a moment and try this.

Write a letter, dated 2 years later. You write it a the present tense. Using the “Magic Wand” (what if you we’re sure to succeed), you transport yourself 2 years from now. Writing to a friend you haven’t seen in  along while, telling him\her where you are, what you have, what you do, what you have accomplished, so on and so forth.


From there, you work your milestones backwards. Where you have to be in 18 months, in 12 month,s  in 6 months. It will give you a set of beacons to guide your decisions. Those miles stones are the general direction. Just make sure there is some kind of possible alignment between those milestones. Try to align the planet (so to speak) to get maximum “attraction”.

Remember to shoot first, aim afterwards. As I said before, when you start, there are no successes or failures, there is only feedback. It’s what you do, how you react to that feedback that will keep you moving forward.

The rest is the “put your money where you mouth is” attitude. Get an accountability partners (coaches can be ruthless ones), and keep moving towards your dream, towards what you wrote in that letter.


The coaching will put emphasis on short term marketing tactics. Working on getting those first clients, the “evangelists” that will talk about your product and services to anyone they meet, that will talk about you in their social media groups. Their feedback will be paramount on coming up with upselling and crosselling that work for your core product/services. It’s from that base that you will develop a “unique customer experience” (instead of a unique selling proposition) Your coach will help you keep an open mind on tweaking you product/service to fit the market.


Conversation will revolve around the fit between “you” (your values), your “ideas” and the environment.






So you think you are crazy being an entrepreneur ? (part 1)

24 08 2009

iStock_000001419386XSmallIn her excellent post “You’re aren’t crazy you’re just an entrepreneur” for Open Forum, Pam Slim quotes Martha Beck.

She talk about the four stages of an entrepreneur.

Let’s look at them and how coaching can help

Square One: Death and Rebirth

Characteristics: This first stage of change happens when you consciously choose to move from employee to entrepreneur. Nothing is familiar anymore, and you grasp to both feel normal and explain your new work identity to others.

Recommendation: Stay focused inward, on your own insights and creativity. Exercise, eat right and stay grounded. Don’t worry about figuring everything out at this stage, just pay attention to how you feel, and stay open to possibility.

The coaching: It’s easy to get in information overload at this stage. So much stuff to think about. The fist phase of coaching has to be centered on “why” you chose that business, that way of “‘earning a living”. Making sure a purpose is driving you, energizing you. filling up your “energy tank”


Second phase, It’s also a moment where it’s easy to loose a lot of energy doing everything and being everywhere. Working on monitoring that loss of energy and making sure short term goals keep you in “focused action” and celebrating small victories. “Staying open to possibilities” means to “shoot” with confidence because you are looking for feedback. The feedback will help you “aim” better.


Third phase: It’s the time to put in place the “rituals” that will ingrain to good habits necessary to succeed. Either getting rid of bad habits that prevent you from moving forward; bad habits that are constraints, bad habits related to unproductive beliefs. Or, developing good habits to adopt to make sure results will be showing!


The coaching conversations will make sure you stay on track, on purpose!

Stay tuned for the next steps…








Think you’ve got no competitors ?

13 08 2009

iStock_000004111211XSmallYou’re always fighting for money that comes from someone’s pocket!

Who has a claim on that money besides you ?

That is a nail that we have to hit repeatedly with innovator and tech firms. And although I agree with a a “blue ocean strategy”, customer money will have to come from somewhere

Of course you can come up with a disruptive technology, but again, the money will have to come from somewhere.

From the customer’s pocket point of view, there is always competition going on. It’s a hierarchy of needs!

Finally, anyone that will look at your business model/plan will have their idea on what competition might be. If you don’t address that upfront, you’re cooked. If they “think” they have seen something you haven’t, your credibility (and partnership/money whatever) is gone!





Are you a solution looking for a problem ?

11 08 2009

iStock_000004409273SmallReading @startupPro’s blog post, I said to myself, so many struggling coaches, mentors and business advisors should apply to themselves that simple truth.

What is the “real” problem ?

Are you just a solution looking for a problem ?

Sure every client wants to start/run a business, but what is the real need behind hiring you?

Brainstorming, pat in the back, kick in the pants, understanding context, finding business partners, overcoming the business plan writer’s block, etc.

To find out the “real” need of your clients,;

  • Remember to start by asking questions, many questions
  • Coaches don’t forget to ask that “how do you feel about…” question.
  • Remember to “really” listen to the answers
  • Make sure you DO NOT have an hidden agenda
  • Remember to focus on finding the right solution (even if it’s not yours)

Basically, you can’t listen yourself out of a sale but it’s real easy to talk yourself out of one.