The Richness of Success

It is often assumed by the uninformed that the only reason for becoming an entrepreneur is to make a lot of money. While making money is clearly a fundamental goal for entrepreneurs, profit is not the only metric they use to measure their success. Just ask any entrepreneur how their business is going and you will begin to see the richness of how they measure their successes.
For some entrepreneurs, success is measured by the jobs they create. When I was asked about our business, the number of employees we had grown to was always at least part of my answer. My partners and I took pride in creating good jobs in an industry that was not always kind to its workers.
For others success is measured by the satisfaction of their customers. A famous local coffee shop owner here in Nashville, known as “Bongo Bob,” takes great pride in creating coffee shops that have a sense of community for his customers. The number of “regulars” who come into his stores indicates to him that he is doing well in his business.
Reell Precision Manufacturing, located up in Minne-so-cold, measures success in terms of creating “an environment that fosters human development and provides for the common good”. Their policies reflect this commitment and they find ways to asses whether they are reaching this goal.
Clearly financial success is fundamentally important for all entrepreneurs. We need to make a living and most want to create wealth. But, profits can be viewed as a natural outcome of pursuing what each of these entrepreneurs view as their real success.

Court to Define “Small” Business

The Supreme Court may soon be getting into the debate over what constitutes a small business in the US as they decide a case that is before them this term.
From Inc.com:

The case, which was heard on Jan. 11, may not only have an immediate impact on small employers currently mired in lower-court battles, but could also help define small-business employment for more than half a dozen federal statutes — including the Americans With Disabilities Act and the Family and Medical Leave Act.

Putting Principles into Action

I wrote the other day about the importance of having a clear and compelling vision. Part of that vision should spell out the values and principles that will guide your business and define its culture. However, too often we see entrepreneurs who are long on rhetoric about their values, but fall short when it comes to putting those values into action day-to-day in how they run their business.
Our values should drive our specific actions toward each of these stakeholders:
– Toward partners, investors, family members
– Toward those who provide debt financing
– Toward employees
– Toward customers
– Toward vendors and other resource providers
– Toward competitors and industry
– Toward the community and society
You need to commit to specific actions and policies for each principle and stakeholder that are important to you based on your values.
For example, it is not enough to say that we are going to be open and honest. We should develop specific policies on who we are going to provide information, how much we will provide, and in what form we will provide it. We cannot realistically be open and honest about every aspect of the business to anyone and everyone. There is some information that employees just do not need to know and should not know. So define what this value really means and how you will put it into operation in your business.
As another example, saying you value your employees and want to create a family atmosphere in your business is a lofty principle. How are you going to bring this to life in your business each and every day is the challenge. You need to commit to specific actions and policies or the odds are that this principle will remain words on paper.

The Transition from Employment to Entrepreneurship

“How do I make the leap from my current job to the business I want to start? I can’t afford to just quit working, and my new business will take several months to make a profit.”
I hear this type of question quite often. For many entrepreneurs the transition from their current job to their new business becomes a real challenge. For some start-ups, there is no option beyond a clean break. The entrepreneur, for a variety of reasons, cannot keep her current job while starting up the new business.
However, for others, it can be possible to straddle the worlds of employment and entrepreneurship long enough to make the financial pressures more manageable. StartupJournal has a profile of an entrepreneur who was able to make a relatively smooth transition.

So What’s the Big Deal About Vision?

Entrepreneurs are told time and time again about the importance of having a clear and compelling vision for their business. But, what exactly goes into a vision and how should it be used?
An entrepreneur’s vision should include three main elements. First, the vision includes a mission statement, which should (in 25 words or less) define the product/service the business produces, the market for which it is produced and any specific and unique aspects of the business that will give it a competitive advantage (such as technology, customer orientation and so forth). This should become your quick answer to the question, “Tell me about your business.”
Second, the vision goes beyond the more objective description in the statement of mission to include the core values and principles that the entrepreneur intends to use to guide the business. It is through the pursuit of the new venture within the entrepreneur’s moral framework that he begins to address the purpose of his work. More specifically, this can be shaped by the opportunities he pursues, the people with whom he chooses to do business, whom he hires, decisions he makes about products and markets, decisions about whether and how fast to grow, the corporate culture he builds and his engagement with the community as a leader and/or citizen. Each action we take shapes our character. These actions become habits — good or bad. The moral principles we bring to our business will become the seeds of the shared culture the business will have as it grows.
Finally, the vision also incorporates the entrepreneur’s aspirations of what outcomes are hoped for from the venture. An entrepreneur’s definition of success can go well beyond profit maximization to include a whole range of other factors, including employment in the community, ability to create balance with family responsibilities, bringing a needed service or product to the market, or creating a certain work environment for employees that is not available in other businesses.
Initially a clear and compelling vision is critical to keep you focused. We often get tempted to pursue more opportunities than we can effectively handle. It is also an essential part of attracting employees, investors, suppliers and customers.
As your business grows, your vision becomes a compass to guide decision making both from a strategic and from an ethical perspective. It helps create order and meaning out of the chaos that so often part of a growing venture.

VCs Give Their Top Tech Trends

A group of VCs recently gave Red Herring their top tech trends for 2006. This is interesting to note as it shows where they are planning to invest their funds.

1. More investment in green startups
2. Voice becomes free within data networks
3. Electronic technology changes from a growth engine to a commodity
4. China to become low-cost world innovator
5. Microsoft, SAP, and Oracle will lose dominance in software
6. U.S. on path to following the third-world
7. Biological sciences become popular in colleges
8. Most compelling technologies will help save time
9. Wires will disappear from the home network
10. Design will count more than ever

What’s On Your Mind

Entrepreneur magazine and PricewaterhouseCoopers released their 2006 “Entrepreneurial Challenges Survey” Here are what they found to be the biggest challenges for entrepreneurs with growing companies in 2006:

Retention of key workers–73%
Developing new products and services–38%
Expansion to markets inside the U.S.–36%
Increased productivity–35%
Upgrading technology–28%
Creating business alliances–23%
Better management of cash flow–21%
Expansion to markets outside the U.S.–14%
Improving risk management–13%
Finding new financing–11%
Buying another company or launching a spinoff–11%
Preparing company for sale–7%
Going public–2%

Opportunities in Podcasting?

Podcasting, the audio version of blogging, may offer some opportunity for profits according to an interview with podcaster Chris Pirillo post at Red Herring.

Mr. Pirillo told beginning podcasters to pay the extra money for audio quality, focus on building a brand, and provide enough text to attract good search results but not be a substitute for actually listening to the audio.
“We’ve gotten to the point that everybody and their grandmother can produce a podcast and everybody and their grandmother is producing a podcast,” he said. “Now it’s about separating the wheat from the chaff.”
As for a business model, Mr. Pirillo–who said he makes a fifth of his income from podcasting– recommended sponsorships. He suggested there are legions of companies who will pay for relevant discussion of their products to an engaged audience, mentioning his own lucrative deals with Citrix, Nikon, and Microsoft.

And as for my podcasting career? I’ve been told that I have a face for radio and a voice for newspaper, so I guess I’ll just stick with blogging for now.

Entrepreneurship Education is in High Growth

I have just returned from the annual conference of the United States Association of Small Business and Entrepreneurship. What I came away with from this meeting was a renewed sense of optimism about the state of entrepreneurship and small business in America. Just a few years ago it was rare to see entrepreneurship taught in Colleges of Business. Now it is not only common in Colleges of Business, but is moving across campuses to reach students of all majors at colleges and universities of all sizes. The innovation in these programs is amazing. When I get caught up on e-mails and get rid of this nasty cold that won’t seem to go away I hope to highlight some of the innovations going on in higher education across the country.
Inc.com today offers a profile of just one of the many new programs being offered.