Entrepreneurs know ideas are nearly worthless; Execution creates value. I promise that very few, if any, of the investment bankers are executing on tens of millions of dollars of value creation. They are siphoning.
This continent was settled by the religious but the United States was founded by entrepreneurs. Entrepreneurs will use whatever infrastructure we give them to build real value. They will use whatever safety net we give them, like loans and health insurance, to take more risks and try new things.
There are many versions of the old adage, “When the economy catches a cold, the poor have pneumonia.”
A poll on LinkedIn asking about business spending patterns shows a wide range of responses to how much the economic downturn is effecting spending patterns (self-reported) of businesses. At last look, 100% of those in large enterprises reported that the economy had no effect on their spending, while 76% of those in small businesses report that they are scaling back or operating on necessities.
I hate to be grumpy about this, but I have to make these two points:
An awful lot of money was pumped into the economy – guess where it went. Large enterprise, though it is easy to write just one large check rather than thousands of small ones, do not represent either most of the spending or most of the jobs in the economy.
The small businesses are the ones that innovate, create substantial new value, and are most at risk of failure.
Healthcare socialism would benefit small business substantially. Bail-out socialism helps only those at the top.
My father always told me that every job is a sales job. That’s at least a little bit true, but in my experience, most entrepreneurs are a little disconnected from their inner
Harvard Business Review offered a special issue on Sales in 2006 (Vol 84, Issue 7/8) that included a number of articles that offers a number of quick reads that should at least help you purge whatever negative image you might have of sales and begin replacing it with an appropriate understanding of where it fits operationally across the life-cycle of an enterprise and as am integral part of the Sales and Marketing continuum.
Psychologist and Anthropologist G. Clotaire Rapaille is interviewed in a piece that presents a concise discription of the sales person archetype as Happy Loser, someone as motivated by the hunt as the kill. Usually entrepreneurs need to develop rejection coping skills, but they don’t enjoy rejection. Sales people love it…according to Clotaire anyway.
For entrepreneurs, I suggest you learn a few solid basics:
Focus on zebras – Even though your business plan says you are targeting a huge market, chances are your initial offerings will only really appeal to a small portion of the market in a particular place in their life-cycle (there are lots of horses, but you only want the zebras). In marketing, we might develop a persona of the most likely customer so that the sales team can ask just a few qualifying questions to can help determine if they are talking to the right people at the right time. Remember each sales activity has a cost and spend your budget wisely. You’ll still face rejection for reasons you may not understand, but you can optimize your closure rate and minimize your funnel by maintaining focus.
Mostly listen – The shape of your products and services and the way they are priced should evolve with your understanding of the customer. Listening to the way customers think about your product, what their expectations are, and what created the situation where they are considering your offering are invaluable as market research, engaging as a business development practice, and a time-tested means of closing a sale.
Respond – Remember that “time kills all sales.” Respond in a timely fashion – think about the service you expect in a restaurant, except the tips you’ll get as an entrepreneur will likely be in the form of a positive referral.
It would be helpful for you to have an objective sense of where you are on your sales skills. I love the very affordable assessments available from the managment psychologists at Pradco. For $50 you get an assessment of your skills and attitudes and a prescription for improvement.
I find research in human behavior fascinating and constantly applicable to both the BizDevGuy consulting business but also to how I advise our clients. Marketing, business planning and human resources are complex, if not tricky, because our models and understanding of human motivations and behaviors are, for the most part too simple or sometimes dead wrong.
This article is a quick read about the work of Dan Ariely who is equally genius in business and cognitive psychology.
There are two factors that I think parallel the present economic crisis with the crash of 1929: credit directed at zero-sum gains and delusional leadership.
Business and markets are not wise. Both the strategic and daily decisions of businesses and individuals are about the marginal utility of a small set of transactions, on the whole. As a community, either global or more local, we can decide whether some processes for money making are good for the whole and under what conditions. It’s easy to see in retrospect that loose lending practices, whether for homes, hedge funds, or corp buy-outs, are a dangerous element in maintaining a society directed at enabling individual prosperity. Only some measure of centralized control can have both the visibility and the leverage to affect the situation.
It isn’t the job of businesses to determine the effect they have on society on the whole. As a business leader, you should make every attempt to understand the impact of your decisions of the welfare of your stakeholders and the community in which you operate. It is imperative that your success, over the long term, doesn’t degrade the context in which you operate. Ultimately, business interests that align their success strategically with the success of stakeholders, customers, and everyone around them will find their efforts supported widely, their success more easily won and multiplicatively more sustainable. As you build your business model, I always suggest that you keep this in mind. Build a model that makes it easy, if not enjoyable, to support you.
However, we should be content to hope that business leaders are so enlightened. Clearly, we have plenty of examples to the contrary and sub-prime lending is a solid example. This crisis was entirely predictable. Shame on these businesses for driving themselves, and obviously, all of us to this point and shame on us for allowing it.
The inability of the present governmental leadership to recognize areas where rational controls could ultimately benefit all business and therefore society makes matters much worse. Now all the President can do is speak hopefully about a clearly damaged market and throw money at the situation.
I love when I find a resource that distills a common strategic question down to a few simple calculations. This article on doesn’t quite get to the paint-by-numbers status, but it does lay out a clear set of topics to consider when thinking about your product launch.
Vaporware or surprise attack?
So often your fortunes are dominated by thigs you cannot control, having a checklist of things that you can clearly make some predictions around should help minimize risks and allow you to make a decision with confidence.