How to Think Like an Entrepreneur: Business Entrepreneur

I often hear two interesting comments. Both demonstrate a misunderstanding of the role of knowledge and intellect in business, more specifically, the needed knowledge and intellect of the lead entrepreneur in a start-up company.

The first comment is usually said by relatively bright individuals, or, at least, individuals who feel they are relatively bright! It is something akin to, “I’m smarter than Michael Dell (or Bill Gates or pick your successful entrepreneur), so I’ll be able to build a more successful company than Dell.”

In many cases, these individuals are highly talented in a difficult computer programming language like C++ or Java. Nevertheless, their companies often never really get off the ground, and they go back to computer consulting. Yes, they make a good deal of money consulting-measured in the low hundreds of thousands-but they don’t achieve their dream of the multimillion-dollar company. Why is this?

The answer is simple. How talented you are as a programmer will not determine how successful you will be in building an informational services company that grows to significant worth. In particular, to grow requires doing more. Writing more code. Creating more software. This is especially true in the specialized solutions provider category. By this, I mean companies that are hired by other companies to create specialized custom-written software. What these companies produce is computer programming code. One person, no matter how good a programmer, can only do so much. There are only so many hours in a day, and you can only spend so many of those hours doing any given thing, including programming. This sounds simple, I know. But, many miss the point.

What is worse, once a business is started, the founder instantly finds that there is a whole slew of other company-related demands that take time-administration, sales, and marketing, for example-which don’t even involve creating the product to be sold, computer code in our example. So, our ace programmer is left with, maybe, 1,000 hours a year of a 2,000-hour work year in which he can write code. This is a significant limit to the amount of product that can be created by only one person.

This brings me to the second comment I hear even more frequently. It goes something like this, “I can’t possibly start a business. I simply don’t know enough.” Sometimes, this is true. But, often, the comment comes from someone who has years of experience in a field. A good question for such a person to ask himself is: “When will I know enough?” Then ask, “What more must I learn before I am ready?” Occasionally, there will be a few definite, concrete things you must learn to function in a given industry. Some generalized business study is very useful. By all means go and learn it.

But what happens most often is the person begins making an all-skills-encompassing list that would take a lifetime or more to master. You think, “How can anyone build a successful company? I will never know enough! All those company founders who created hundred million dollar and billion dollar companies must be geniuses to know so much.” SECRET INSIGHT: This is just not so. Many of the founders of even billion dollar companies are not really any brighter than you are. Many of them believe they are brighter! But it’s a case of the tail wagging the dog. Most people who build hugely successful companies are quite understandably highly confident and, in time, will start to believe that it is their inherent intelligence that was instrumental to their success. More on this later. The primary question is: How did they build a company that has such vast intellectual capabilities?

Let’s take a simple example of a guy who wants to start a multimedia production company. By this, I mean a company that produces interactive CD-ROMs, maybe, Internet web pages, and, maybe, computer-based training for other companies. If you are not familiar with these areas, don’t worry about it. It is not necessary to know exactly what this terminology means in order to fully understand this example. Let’s say our entrepreneur is named Henry. Henry does know what the above terminology means. In fact, he also knows just what software can be used to create the above content.

Henry makes a list of “What I Need To Learn.” The list includes Java, JavaScript, C, C++, Director, PhotoShop, Premier, Authorware and Sound Edit. He thinks, “OK, I need to be a good programmer. I need good artistic skills. I’d better be able to communicate clearly in writing. I’d better know something about sound and video editing. Some 3D modeling could come in useful. I should probably also know a bit about music scoring, and I will probably need to use some video within the CD-ROMs and computer-based training (CBT), so I’d better learn basic videography, also.”

Poor old Henry has a big job ahead! But, he persists. He learns it! And, he creates his first complete multimedia piece. And, it sucks! Bummer. Well, Henry was a good programmer, better than most. But his artistic skills sucked, and it showed in his creation. His video was better than he initially expected, but it wasn’t really that good, either. Henry simply could not do it all. No matter how hard he tried, he was just not mastering all of the areas he needed. He thought about going back to work for someone else. After all, that seemed so much easier!

My advice to Henry is to take a break. He’s earned it. Go watch a movie. In fact, make it The Magnificent Seven with Yul Brynner. It’s a great story. This little Mexican town is being pestered by bandits who take what little crops the town can produce. Further, the bandits are just downright rude when they visit. So, the little town collects what little money it has, presumably hidden from the bandits, and it goes to another slightly larger town to buy guns, so that the little town can defend itself. In their search for weaponry, the town representatives meet up with Yul Brynner, who, they hope, might be able to sell them guns. After all, Yul is a pretty tough-looking guy. They go to Yul, and ask him, “Will you help us buy guns?” Yul listens to them, and he responds, “Why buy guns? Why not buy men? Men are cheaper than guns.”

Never forget that line. If Henry really understands this line, he won’t look at things the same way. If Henry wanted to be a consultant and “do it all” himself, then, his list of learning topics would be valid. But, why spend any time trying to master PhotoShop, a graphic arts program, when you are not an artist to begin with? You can find people to hire who are artists and who know it. If you can’t justify hiring someone full-time, maybe, you could hire someone part-time. Maybe, you could scout the local technical colleges to see if any students would be interested in an internship. They gain experience and a reasonable entry-level wage, and you get a chance to evaluate their skills. Maybe, you already know someone with the skills you seek. Keep your eyes open and build contacts. Make lists of people who have skills that might be useful to the type of company you want to build.

Even if Henry learns PhotoShop well, does it really matter? Not if he is interested in growing his company. He can only do so much. Beyond some point, he will need to delegate, even if he is a master of the area under question. When you seek to hire others, you should always look for people who far exceed you in a given area that is important to your company. Even if you aren’t putting people on staff, be sure to build contacts with these people, anyway, in case you ever need help.

I recall reading that, on average, any given person in the world is at most seven steps away from any other person in the world (no, this isn’t one of those Stephen Covey things). This means that they know someone who knows someone who knows someone. four steps later.who knows the person. You just need to find the chain! Of course, this will depend upon how many people you know. The more contacts you have, the better. But, who cares about contacting a given person? The fact is that any person is usually only one of many people who can help you. If you need a top-notch person in, say, C++ computer programming, there are many great candidates. If you need a great salesperson, there are many of those also. You just need to be able to identify them. This means your chain of seven people is drastically reduced. Within one or two contacts, you should be able to find someone who suits your needs.

Copyright 1999 by Peter Hupalo. Excerpted from “Thinking Like An Entrepreneur”, HCM Publishing.

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