Note this article also appeared in Entrepreneur Middle East and can be viewed here.
There’s a lot of ‘wisdom’ going around. Especially when we’re talking about entrepreneurs.
For all the startling statements we see, is there in fact business advice that may ‘feel right’ but could actually be damaging?
Every year, millions of new businesses are launched around the world. And with this tidal wave of entrepreneurship comes an even bigger tsunami of advice from books, magazines, consultants, self-styled business gurus and university professors.
But it’s important that an opinion is not mistaken for best practice. In reality, every business is different, and every businessperson has their own style of decision-making. Problems arise if a founder bases their whole setup on one piece of advice, without questioning its appropriateness to their specific company.
So how do we cut through the noise?
Let’s look at five pieces of entrepreneur advice that you have certainly heard before, and examine whether they should be taken as golden nuggets or discarded completely – or somewhere in-between.
1. ‘It’s okay to keep your day job’: No, it’s not. True, starting a business is scary. And yes, Patrick McGinnis wrote a book about being a part-time entrepreneur and stated it was possible to be in business with only a commitment of 10% of your working time. And of course there are the blog businesses, mumpreneurs, garage-run businesses, and so on.
But in reality, for most businesses to succeed it will take full-time commitment. And then some.
Clients, customers – they need to see you are a real company in order to take you seriously. Having an office that is reachable for the full working day (and the full working week) will put you on the map. Giving up full-time employment and the buffer of security that goes along with it is definitely scary. But bravery is needed if you truly want to reshape your life as a serious entrepreneur. By keeping your day job, it’s like accepting defeat before you start.
Giving up full-time employment and the buffer of security that goes along with it is definitely scary, but bravery is needed if you truly want to reshape your life as a serious entrepreneur.
Want an example? Okay, this is a little extreme but look at the routine of Jack Dorsey, founder of Twitter and CEO of Square. It’s reported that every day he gets up at around 5am and works for about eight hours for Square followed with eight hours at Twitter, sticking to strict schedules each day. While you don’t have to emulate the workaholic ways of Mr Dorsey, the point is that people don’t succeed by being part-timers.
Make your business full-time and fully commit.
2. ‘You have to meticulously plan out your first few years’: Nope. The reality is that a business is a more organic, more evolving beast than many a founder would care to admit. While a plan is good in order to sketch out your direction, from day one there will be unseen challenges and the need to adapt and change so you can stay on track.
A study by Babson College (that focuses on entrepreneur education) analysed 116 businesses, comparing success factors such as revenue, number of employees, and net income. It found that there was no statistical difference between those who had formal written plans and those who didn’t. What to take from this? Simply: Don’t waste time, get on with business. You don’t know what is around the corner, so agility is key. Writing down your intentions and looking at them isn’t doing business. One phone call to a prospect is worth more than an hour on your business plan.
As the 6th Century BC Chinese poet Lao Tzu said: ‘Those who have knowledge, don’t predict. Those who predict, don’t have knowledge.’
3. ‘Simple hard work will get you there’: Yes, it sounds nice but it’s just not helpful. While you do need to put in the hours, hard work in isolation is not enough for success. What we’re talking about here is intellectual capital – whether it’s the know-how of you and your staff, your client relationships, or non-physical infrastructure such as your databases. All put together, this is the real value of your company and this is where its success lies.
Dave Ulrich from the University of Michigan argued in the Sloan Management Review that intellectual capital is ‘competence multiplied by commitment’. While everything else in your company depreciates in value like machinery and equipment, your intellectual capital has to be an appreciable asset and grow if your firm is going to prosper. When you provide a service, as a manager you need to make ‘knowledge productive to turn intellectual capital into customer value.’
While everything else in your company depreciates in value like machinery and equipment, your intellectual capital has to be an appreciable asset and grow if your firm is going to prosper.
4. ‘Get a great sales and marketing team and you’re there’: Not useful either. Why? Sure, sales and marketing are cornerstones to any business but if the product or service is not good in the first place, people will find the glaring flaws. Coca Cola didn’t get successful due to great marketing, it found success because people liked the product.
The Harvard Business Review article entitled Why Most Product Launches Fail listed some classic errors made by companies. Notable inclusions were the product falling short of claims made about it, or the product being too revolutionary and hence there being no market for it. (Apple’s entire modus operandi is to make products that the market doesn’t yet know it wants, so right here is a great example of advice that should be questioned: How does this advice apply to your specific business?)
Ultimately, mediocre products have mediocre appeal and that is lethal to a business. No amount of marketing can fix it. Plenty of businesses get great visitor traffic to their websites but fail to convert to a sale and that’s got to set alarm bells ringing for business owners about the very nature of their offering.
5. ‘Just do what you love and everything will be fine’: Run away from this one. Yes, there has to be some love in what you are aiming to do as otherwise the commitment required would be torture without it. However, to imagine that you can get away with just doing the nice stuff (the things that don’t even feel like work) is a dream.
Running a business, especially when you’re ‘swapping hats’ every moment of every day (accountant, salesperson, inventor, marketer, team manager), means a lot of unpleasant or at least ‘more boring’ tasks have to get done.
But your productivity in these areas is important: A Stanford University research paper titled Why Bosses Matter revealed that the average boss is 1.75 times as productive as the average worker. So you naturally have to get stuck into everything to some degree and take responsibility for making it all work.
Running a business, especially when you’re ‘swapping hats’ every moment of every day (accountant, salesperson, inventor, marketer, team manager) means a lot of unpleasant or at least ‘more boring’ tasks have to get done.
So what should we take from these pieces of advice, or rather non-advice? Only what works for you personally. Engage critically with any business advice offered. Question it. Because in the end, it’s important to remember that some advice sounds right (even feels right) but isn’t a reflection of the realities of your business.
Reading an essay on ‘how to run marathons’ won’t make you an athlete – you need to get out in the real world, work, adapt and perfect your business methods in order to see what works and what does not.