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The entrepreneurial leader in you

May 29, 2018

Entrepreneurs have become the new superheroes of the C21st, figures like Zuckerberg, Bezos, and Musk are icons, seen as innovative pioneers. However, we tend to fall back on broad stereotypes without really understanding what makes entrepreneurial leaders special.

Research by Tim Butler from Harvard Business School compared the psychological-testing results of more than 4,000 successful entrepreneurs from several countries against those of 1,800 business leaders who described themselves as successful business managers, but not as entrepreneurs.

Unsurprisingly, the two groups had much in common. On 75% of the 40+ dimensions of leadership evaluated, there was little or no difference between their skills. Yet when Butler looked more closely, combining the skill assessments with data on their life interests and personality traits, he discovered that entrepreneurs had three distinguishing characteristics:

–      the ability to thrive in uncertainty

–      a passionate desire to author and own projects

–      unique skills at persuasion and influence

Butler also found that many of the traits popularly associated with entrepreneurial leaders didn’t truly apply. For example entrepreneurs aren’t always exceptionally creative – but they are more curious and restless; they aren’t risk seekers – but they find uncertainty and novelty motivating. Butler’s research tackled some of the myths about entrepreneurs and explained the more nuanced reality.

Let’s take a look at four key elements of Butler’s research and the popular perceptions about entrepreneurship, and what the research findings indicate are the true drivers of entrepreneurship. Reflect on this, and what it says about the entrepreneurial leader in you.

1. The Stereotype: Entrepreneurs are unusually creative. The Subtler Truth: Entrepreneurs are curious seekers of adventure, learning and opportunity.

One popular notion is that entrepreneurs enjoy constantly changing, innovative environments and are more creative than others. But ‘creative’ can mean fixing things that are broken and have been stuck for some time. While it’s certainly true that entrepreneurs excel at original thinking, so do many non-entrepreneurs. In reality, what sets entrepreneurial individuals apart is the ability to thrive in ambiguity and tolerate uncertainty.

A critical aspect of this is openness to new experiences. Butler’s research found that it is the single entrepreneurial leader trait that most distinguishes them.

Openness to new experiences is about having a hunger to explore and learn, not just a willingness to proceed in unpredictable environments but a heightened state of motivation that occurs at the edge of the unknown and the untried. The unknown is a source of excitement rather than anxiety.

They don’t see the constraints of boundaries, rather looking at a blank piece of paper and saying, ‘Now, what do I want to create here?’ Entrepreneurs enjoy the ‘dreaming it up’ process, they thrive where there is an unfulfilled market opportunity with no product or service, or where there is a product but the go-to-market strategy is not clear.

2. The Stereotype: Entrepreneurs enjoy and seek risk. The Subtler Truth: Entrepreneurs are more comfortable with risk.

Another prevailing view is that entrepreneurs love risk, the thrill of taking chances. This is not true; entrepreneurs are not skydivers, they seek to minimise risk at every opportunity but have higher comfort and tolerance thresholds with risk than others. In other words, when accepting risk is necessary to reach a desired outcome, entrepreneurs are better at living with it and managing the anxiety that might be disabling to others.

Butler’s research likewise showed entrepreneurial leaders aren’t necessarily tougher and more stress-hardy, rather the point that emerged was that highly unpredictable and ambiguous environments are a source of motivation. This is a second reason they thrive in uncertainty.

Openness to new experiences and comfort with risk are the main components of the ability to perform well in unpredictable environments, although many people misperceive the essentials to be tough-mindedness, hardiness, or resilience. An entrepreneurial leader has made choices that clearly favour adventure and learning over convention and minimisation of risk.

3. The Stereotype: Entrepreneurs are more personally ambitious than other leaders. The Subtler Truth: Entrepreneurs are driven by a need to own products, projects, and initiatives.

Entrepreneurial leaders score exceptionally high on the need for power and control. We know that, they have big personalities and are extroverts! Not always so. Butler discerned an interesting variation on the need for power in that it’s less about dominance and more about ownership, and ‘making a mark’. It’s not about having supremacy or authority, it’s about having control over the finished product. In this way, entrepreneurs have more in common with authors and artists than with dictators.

Entrepreneurs are hands-on, they want to be in the middle of the buzz and hustle as a new venture, day by day, comes into the world and starts to walk, then run. They are not ones to sit in corner offices sitting on their hands. They want to be the artisans with their hands on the wet clay. They want to take a finished piece from the kiln and say, ‘This is mine – I did this’ – not in an egotistical sense but in the manner of ‘I shape materials that become valuable and useful things.’

Long after Apple had become a large company, Steve Jobs still had to be part of every critical design discussion, hold prototypes in his hand, and assess every detail. Power, for the entrepreneurial spirit, is about being the owner of and driving force behind an initiative. Getting it right becomes a compulsive obsession.

This expression of power is different from positional power (based on rank), charismatic power (influencing people through your personality), or expert power (when others defer to your knowledge). Entrepreneurial leaders do not see themselves as exerting power or authority from above, rather they see their role as being at the centre of a circle, creating and enabling with their energy, influence and resources, rather than the top of a pyramid.

That is not to say that entrepreneurial leaders do not display aspects of authority, expertise, or charisma, but the aspect that unites them is not the desire to be a decision maker. For such leaders, a venture is an expression to the world of who they are.

4. The Stereotype: Entrepreneurs are natural salespeople. The Truth: This one is correct.

Butler’s research corroborated many earlier studies that highlighted the importance of confidence and persuasiveness among entrepreneurial leaders. When it’s crucial to get somewhere or make something happen, but it’s not clear how to do so, you must, first, believe that you can reach your goal and, second, convince all the people whose help you need that you can, too and very often, with little or no evidence to back you up.

Many startup founders have to sell their ideas to initial investors – and all entrepreneurs must be able to sell to the customer. But they’re not trained sales people, and are often clumsy. However, they have a natural self-belief, sell the vision, and remove all roadblocks creating the ‘art of possible’ as they create engagement with prospects.

So taking Butler’s research and the framework of four entrepreneurial leadership norms, let’s consider further attributes and characteristics frequently noted in the entrepreneurial personna, and use this analysis to reflect on your own leadership dna.

Emotional intelligence This is perhaps an unexpected quality to mention in a list of leading traits for entrepreneurs, but I consider it essential. An entrepreneur’s EI depends on the ability to understand his or her own emotions and to self-regulate those emotions in the interests of attaining a higher goal. Emotionally intelligent leaders are also attuned to others’ sensitivities, and are able to demonstrate empathy. They use this understanding to lead others in times of turbulence and uncertainty, creating trust

Authenticity and integrity These qualities involve remaining true to one’s own aspirations and vision, even in the face of opposition, and often lack of support. By rising beyond the day-to-day setbacks and challenges that every startup faces sooner or later, it’s important that you remain true to yourself, don’t fall for compromises, and continue to do the right things for the right reason.

Create an atmosphere conducive to growth With a deep understanding of the importance of other people’s contribution to organisational success, the entrepreneurial leader creates an atmosphere that encourages everyone to share ideas, grow, and thrive. They actively seek other’s opinions and encourage them to come up with solutions to the problems that they face. The entrepreneurial leader also provides positive feedback when employees come forward with an opinion.

Mental toughness In some ways, resilience is related to emotional intelligence and risk tolerance, but it goes further in helping an entrepreneur build immunity to the ups and downs, the successes and slumps, that accompany the launch of any new enterprise. Emotionally resilient people become frustrated by failure, but they refuse to allow it to defeat them or to interfere with their ability to integrate important lessons from the experience into the way they approach problems in the future.

A sense of passion and purpose Entrepreneurial leaders’ strong individual convictions inspire those around them to produce their best efforts. A good leader has developed the ability to share a powerful vision of success in ways that infect others with the desire to help make it a reality. The force of dedication to a larger purpose can serve as a major source of inspiration both within and beyond a company.

Self-esteem Underlying everything is a high sense of one’s own self-worth. Without that, you will never undertake tough challenges. Making a start, keeping going, and never doubting yourself at any time is part of an entrepreneur’s journey of self-discovery and learning. If you begin to doubt yourself you lose the confidence to make decisions by instinct, and end up making steps into safety and not growth. Conformity is the jailer of free thinking and the enemy of growth, brought on by self-doubt. 

Entrepreneurial leaders know who they are and what is meaningful to them. They have a purpose in life and work, knowing why they started their companies and why they lead them. They understand how their businesses fit into their industry and their community.

Entrepreneurial leaders simply get up and do what needs to be done. However, it’s hard to lead a cavalry charge if you think you look funny on a horse, so the characteristics and traits outlined above are vital behaviours, and don’t come scripted. There is a link between startup growth and entrepreneurial know-how – market insight, strategic orientation, customer impact – but aligning leadership characteristics and traits with the company’s growth ambitions, potential and trajectory is essential.

Is there an entrepreneurial leader in You?

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Thoughts on startup pricing strategy: money is the applause

May 21, 2018

The price of everything and the value of nothing. This Oscar Wilde quote reflects much of today’s business environment, discount retailers have flooded the high-street, online models offer seductive monthly subscription pricing options, and ‘pay-as-you-go’ is an established enabler of contract free affordability.

The very essence of Wilde’s quote is that it’s useless knowing the monetary price of something and yet not fully understanding its true non-monetary value to your customers. This is the challenge faced by all startups.

Yet often startups struggle in developing a pricing strategy and opt for a play which misses opportunity, due to their lack of insight into their drivers of value, and simply focus on ‘that’s the market price we can get away with’. Many default to a pricing model based on an accounting principle known as cost plus – take all your costs (salaries + materials + overhead) and add your profit wish. Pretty simple. Pretty awful.

Many startups make pricing decisions in a seemingly random and detached manner from their go-to-market strategy. This is understandable to some extent, as early-stage entities lack self-belief, branding gravitas and customer intelligence. They have pressure on their runway to execute, however, given pricing is such a strategic play in your business model, making a ‘bet’ isn’t good enough.

It sounds obvious, but pricing drives revenue, it underpins your overall go-to-market approach an ultimately profitability, so you need a good sense of where to start, and be confident in pricing experimentation as part of the learning and iteration process.

Startup pricing is more art than science. You have no anchor to customers, but you have to start somewhere. Getting pricing right requires a confident, experimental mindset and willingness to have an honest and bold dialogue with potential customers. Each conversation is another signal telling you if you’re moving in the right direction, or if you need to pivot. There are a number of bad habits and pitfalls to avoid, for example:

Prices are developed without customers You can’t figure pricing out without engaging customers as benchmarking research. All the answers are in your customers’ heads not in your spreadsheet, so get out of the building. A startup has to prove it can solve a problem and then develop a repeatable, scalable sales process for customer discovery, validation and growth. Pricing is an integral element to this model.

Prices are set in stone, not in motion Founders often fall into a common trap: they pick a price, get early confirmation, and declare ‘this is the price we’re taking to market’. They have a hypothesis to test, but then get nervous and lose this focus, and end up with a series of random prices as they seek to close deals. Your strategy should be to pick a pricing starting point, and stick with it as a permanent solution for a sufficient period of time to provide validated learning.

The price is too low Even the most confident founders price low. Instead of letting the market tell them where they’re not going to win deals, they’d rather price low and end up trying to interpret where on the pricing spectrum they’ve landed. That’s how founders talk themselves into the discounted side of the pendulum. If you’ve already started from a low price you’re already capping your revenue growth.

The pricing structure is complicated Many early pricing pitfalls are rooted in trying to innovate too much on pricing structure. Customers are used to buying in a certain way, such as a monthly fee or per transaction. Anything too far from this, which you may regard as ‘innovative’, can be a barrier for customers to understanding and adoption. Startups must maximise their learning per conversation around pricing.

So take a step back. Pricing is a pathway to the market, so it must serve the strategy through which you hope to get a foothold. Before you begin experimenting with pricing, get clear on the main driver in your early go-to-market strategy:

• Getting your first referenceable customers – who are your ‘famous five’ whose badges represent credible testimony?

• Securing targeted, specific large customers where you can build a footprint to scale long-term revenues

• Maximising revenue across a number of targeted customers in a specific segment

• Gaining widespread market share and brand awareness

Each of these goals has a different pricing optimisation, often exclusively. Statistics show that as few as five customer development conversations provide 80% of the price testing and learning you need. You can apply the takeaways and adapt the next experiment. You need a different set of customer development questions depending on where you are with your pricing experiments.

Here are a few of these questions to consider for customer development conversations for early or neutral prospects:

• What is the last similar solution you bought? Tell me about your evaluation process.

• If I told you that I have a solution to [insert pain point], would you be interested? Why?

• What do you think is an acceptable price for a product that solves this problem?

• What is an expensive price?

• What is your budget for a solution?

These customer development questions are part of getting a more informed understanding of how customers think about your product, and helping you to define two key inputs to help shape your pricing strategy that follows:

Your upper price ceiling This is the highest price the market signals for the value you provide. Force yourself to test this, even if it means getting into the uncomfortable zone of pushing for a higher price, you need to find it. You’ll get pushback and refusal, but if you’ve done a good job showing the value of your product, prospects will be interested. I’ve worked with tech product startups where we’ve gone from £5k to £20k in price testing the ceiling.

At a certain point, price can be a barrier and even if prospects value your product, they may delay or defer purchase. But the key here is that you’ve identified your upper ceiling, and now decide whether pricing at this point is strategic or counter-productive to growth.

Your anchor Your anchor is an alternative that customers compare your product against. What are you replacing? Set the anchor to something the customer understands. Make sure you find an anchor that gives you a price point that’s high enough. Don’t expect your customers to figure this out on their own, it’s up to you to paint the full picture. The goal is to get data that will really give you confidence in your upper ceiling and anchor.

Once your customer development conversations provide insight into these two factors you can shift your focus to the more robust pricing conversations that you will run, but you now have a range. There will be times where the customer is pushy and you need to deliver a price. The best practice is to deliver a range. When you’re testing the market, pricing is inherently a nerve-wracking conversation, but one you must embrace to get confirmation that customers see the value of the product.

The goal is to validate the tangible value your product offers and get customers to move themselves to your price point. If a customer baulks at your price offer, they are saying ‘this solution to my problem does not provide enough value’ – but don’t take that as a signal to reduce your price, rather it’s an opportunity to recognise they are not rooted with sufficient knowledge of your offering, so go again. After this, if prospects still don’t get to that point, you’re wasting your time, as they are buying based on cost, not the value of your product.

In addition, conversations not only allow for adjustment, but also set the tone for follow-up. They may not be able to give a specific price that works now, but don’t panic. You have more than one shot, don’t knee-jerk and panic to get a deal closed today and offer a discount, who knows what’s going to happen. Both parties have invested time at this point, an instead of jumping to a discount, foster empathy.

Don’t be afraid to own up being an early-stage company, along with the constraints that come with that, explain your seeking to understand what is a valid price point for the value you’re providing.

This type of exchange reframes the sales conversation and gathers further intelligence. No matter where you start with pricing, at some point, your structure will change – you may introduce new product features, enter a new segment, or develop a different go-to-market strategy. Maybe your ideal customer profile changes. Each of these scenarios alters the equation, but until that point, develop a minimum viable process to help determine your early pricing.

Free markets tend to undermine themselves, as Marx identified, from the bottom upward – which is why we see a race to ‘cheapest price’. Many business people are besotted by ‘market rates’, but as Economist Paul Krugman says, this is beauty clad in impressive mathematics for a convenient truth. Equally, opportunist pricing can make short-term gains, but don’t get too rosy eyed, markets can be easily bewitched, and scoundrels seeking easy exploitation ultimately fail.

Be confident and curious in creating and capturing value for customers. Be obsessed with value, your clients will appreciate it. Many startups take a ‘case by case’ opportunity basis to pricing, and convince themselves ‘this is a big new client, it’s a valuable opportunity, we’ll reduce our price to win the job’. This is flawed, negotiate and fix the commercial expectation. Respect yourself and your business. Do you want to haggle over price, or do you want to showcase the ideas that will give you innovation, growth and success, as the basis for your pricing?

So, the key considerations are:

Establish the right pricing culture in your startup Be a value pricing firm that prices according to the external value created for customers

Establish a pricing strategy and make it a core competency There’s a big difference between listening and waiting to talk. Establish the floor and ceiling price by being confident and clear about the value you create.

Price on purpose What are you really selling, what are your customers really buying? A florist isn’t selling flowers, it’s selling love; Dulux don’t sell paint, they sell the colours of life; Harley Davison don’t sell motorbikes, they sell adventurous lifestyles; software companies don’t sell technology, they sell innovation.

The most critical input at an early stage startup remains the voice of the customer, not your product. Don’t fall into the four bad habits identified earlier, and stumble into a pricing conversation. Resist customers jumping the gun to talk about pricing before you’ve unpacked and explored the value fit of your offering to their problem – never panic or prematurely discount if there’s pushback, but continue to fact-find around constraints.

Don’t get seduced by the numbers in articulating your value proposition – money is the applause, not the reason you’re here.

Have your startup numbers at the tips of your fingers

May 14, 2018

The goals of a startup are in three steps: validate the problem you’re solving; develop a repeatable sales process; build a scalable business model. These early stages are typically a tough time, with the inevitable focus on managing the cash whilst holding a vision and searing ambition.

With a hundred and one things to do, one of the main issues I frequently come across with startup founders is that they don’t pay enough attention to their numbers, especially the critical ones. Numbers are second nature to me, but for many first time entrepreneurs they hold an inherent fear. However, it is something you need to learn and take the time to do on a weekly basis. Running your numbers keeps you accountable and will help you sleep a bit better at night.

It’s simply knowing and understanding the inner workings of your business model and the financial levers which generate the numbers, which then enable you to focus on acquiring new clients, leads and sales. If your start-up is getting some traction and generating leads or sales, you need to know your numbers to make sure that you are just not generating cashflow with no profit.

From the outside, it seems ridiculous that people don’t look at something so simple closely. Entrepreneurs who know their numbers have a tremendous advantage over those who do not. The financials tell a story, and understanding the story is one of the most important ingredients for long-term success.

But this isn’t boring, geeky stuff. Having the numbers at your fingertips will show you if the business is starting to work. Confidence must be tempered with the reality that we all make mistakes. We need to measure things all the time. That way we can correct those mistakes and make adjustments as soon as possible.

Entrepreneurs that do everything by gut instinct are missing a trick. Hunches will take you so far, but as you scale, you need to analytical too in order to make good decisions, and for that you need good information. So what numbers should you be looking at?

In the early days of a startup there isn’t much to measure, but that doesn’t mean you shouldn’t start building a dashboard and focusing on building key numbers right away. I think there are ten key sets of metrics that you need to keep at your fingertips: on the left hand, where are we today? on your right hand, where we heading?

This will give you insight into your current progress and operational cadence, and help short-term forecasting, whilst also ensuring you are focused on growth velocity and trajectory. It’s a combination that ensures you have a dual focus on the ‘business of today’, and the ‘business of tomorrow’. This current/future orientation is a good step toward focusing discipline and attention on the information needed that will lead to informed decisions.

On your left hand

For me, knowing where you are is just common sense. It’s all very well having moonshot ambitions, but you need to know the current pulse in order to know what to do next. Think about yourself as a pilot navigating a journey – you need to know altitude, speed and direction – do you know where you are today against your plan?

The vital signs should focus on current performance to budget, targets and milestones regarding customers, revenue, product development, cash, and operational gearing to answer the questions: are we creating stickiness in our market with what we are currently doing? Do we understand where we are, what’s working today, and what’s not?

Once we have a grip on the ‘business as usual’ drivers, we can then look to the horizon. So, for example, here are suggestions for key number headings of ‘today’:

Customer metrics: building traction Do you know your customer numbers, how much it costs you to attract each customer and your churn rate? It’s a good way to monitor the efficiency of your sales process. How is your customer base growing, how sticky is your base? The absolute value is important here, so is the trend. There are a wealth of other customer metrics that feed into these high level ones.

Revenue metrics: creating a growth engine As you grow, develop a working product and gaining customers you need to start measuring how your business is scaling. Your revenue run rate measures how sales are developing over time. It helps you see how likely you are to hit your forecasts, capture any trends or patterns and tease out potential problems with your pricing strategy.

 Looking at average revenue per user is a starting point. An average can’t tell you anything about the quality of your sales, you need to get really granular, and do so on a weekly basis to get close to the drivers.

Product Development metrics: roadmap milestones Retaining a focus on building out your product is important and shouldn’t be put to one side whilst also seeking to build customer attention. It’s important to keep a line of sight on the product development roadmap milestones and creating a backlog of customer driven development from features identified. The agile development process has built in metrics around user stories, points and sprints, and these should always be in focus.

Cash flow: burn rate Staying on top of your burn rate – how much cash goes out the door every month – is critical. Running out of cash is an avoidable car crash, but needs attention. Knowing your burn rate is like looking down the track towards a finishing line with the stopwatch running. You need to know how much time is left before you run out of money.

Understanding your runway is vital – at the current burn rate, how many months of spend do we have remaining? Short runways cause entrepreneurs to be myopic, and removes the liberty to tweak and iterate when necessary. It also forces them to focus on the next fundraising round instead of growing the business. It’s a separate discussion from this blog, but fund raising should be focused on milestones, not the runway.

Operation gearing: learning The early stages are about trying things out, learning, and improving. How much operational efficiency does your startup have? In other words, are you getting a return on your spending or are you underinvesting in critical but areas? When you’re ramping up, you’ll need to spend more on marketing and hiring and to get traction, and you need to build these into your metrics.

On your right hand

As your left hand holds metrics for today, so your right hand should hold numbers with a forward-looking orientation, focused on the ability to scale fast, and typically go through three stages – traction, transition and growth. Each of these stages requires different priorities that are reflected in different objectives, strategies, team etc., but all focused on your North Star – your overall aim.

The North Star has been used for navigation since man began sailing, and applying it as a metaphor to startups is useful to get clarity in the maelstrom of things to do. For me, your North Star is determined by answering the question: How many people are getting authentic value from our product?

So, on your right hand, hold a set of metrics that inform about progress on your North Star, capturing the velocity, direction and momentum on progress. It’s a simple goal and easy to measure. I use authentic value to avoid vanity metrics. The moment when a user gets authentic value means you are getting traction, and can anticipate revenue, and when you have paying customers, you have a chance to turn your startup from an experiment into a business.

Simply, traction refers to the initial progress of a startup, seeking product-market fit, gaining market share and mind-share from its target audience.  If you achieve success in the traction stage, you have forward movement, finding what moves the needle of your initial growth, testing different offerings, and nailing down your product-market fit. Your aim is to maximise what makes you unique and what makes you valuable to customers.

The truth is that many startups make the same mistake of thinking if something doesn’t work, it must be everything, or they just guess the wrong reason why their business is not working. The truth is, any part of a customer’s experience can influence them. Here are some other metrics to consider, the 5C Scorecard:

Customer Numbers Growth A simple, binary index, set and measured for each period, provides visibility, clarity and simplicity of your North Star.

Conversion Rate Growth to be a very telling KPI in that it reveals a combination of the company’s ability to sell its products to its customers and the customers’ desire for the product. It is particularly instructive to track and review Conversion Rate over time and regularly run experiments to improve.

Customer Acquisition Cost Reduction is the unit cost of spend on sales and marketing, on average, to acquire a new customer. This tells us about the efficiency and effectiveness of our marketing efforts, and you need to be looking at this reduce as customer numbers uplift.

Customer Retention Rate Growth indicates the percentage of paying customers who remain paying customers during a given time period. When retention rates improve over an indicative time period, you know you have a sticky product that is keeping customers happy.

Customer Lifetime Value Growth is the measurement of the net value of an average customer over the estimated life of the relationship. Improving the ratio is critical to building a sustainable company.

For a company seeking outside funding, knowledge and management of these metrics is critical to allowing investors to understand your business and potential.

Clear data leads to productive conversations, recognising that whilst there are lots of moving parts in your startup which you need to stay on top of, a forward focus on customers forms the core of a dashboard of growth metrics. Over time, new financially based metrics can be plugged-in as it’s important to put an emphasis on the numbers you need to actively improve profitability.

But that’s the key: don’t use numbers to measure a startup financially at the outset, use them to guide and drive growth ambitions and the direction of travel and development of your business model.

Equally there is a ‘lead’ and ‘lag’ orientation to metrics, some track was has happened, others can be used to look forward. Progressions are far more important than numbers without any context: what was that number last month, compared to this month? How has it changed? What is the growth curve? Is it static? Is it dynamic?

Use your numbers to ask questions, the things you need to know to be sure that what you’re doing is having any effect at all. It is difficult to prioritise product and customer growth: Should we write a new feature? Remove a feature? Fix a bug? Redesign a user interface? Remove a step in the sign-up process? Write a blog post? Offer an e-book for a lead nurturing campaign? Change pricing? Hire a customer support person?

You must have an understanding of what levers can be pulled towards achievement of your North Star, which is then reflected in KPIs. The focus should not be on the KPIs themselves, but the meaning behind them and knowing what impacts each one.

In reality, the numbers should just confirm your instinct on performance and progress, but often they produce a reality check of where you are on the runway, offering a balance to the emotional ‘feel’ of what represents real progress on growth aspirations.

In my experience, startup founders can fall into the habit of innocently deceiving themselves with their own view on data, by only focusing on the KPIs and data that sounds positive and offers a positive outlook. We all have cognitive bias, tending to hone in on the metrics we know are improving over time, and ones that sound impressive without much context.

For example, I’ve seen startups ignore the hard stats of monthly active user numbers, but talk about the number of web site visits or downloads of white papers. Beware of ‘vanity metrics’ such as these, they don’t provide any meaningful indication on issues on which you should be making decisions. Focus on metrics and numbers that you can improve, and that inform you on your direction of travel in a meaningful, clear way.

To me, the indicators that matter most in the life of an embryonic startup are about customer development. If you don’t have a handle on these numbers, then you’re simply fiddling round the edges, and your actions will make far less of an impact on growth direction, velocity and scaling ambitions.

Entrepreneurial learning journey: sat in the barber’s chair

May 7, 2018

Should I get my haircut at the new barber in town, or stick with my existing bloke, who’s done a decent job for the last twenty years?  Tried and tested, traditional barber’s shop, good chat and always a decent brew, or time to switch and see if there’s something new and different on offer?

How can the new barber attract me away from my long-time relationship? This is the challenge all startups face, how to attract those early customers.

The new place has opened in the old fruit & veg shop on the high street. Nice job they’ve done on the refit, polished wooden floors, modern sinks, trendy lighting and décor. It looks like the kind of place where they might give you a choice of herbal teas, massage your scalp vigorously beforehand with spicy unguents, and soothe your face afterwards with a hot towel.

It’s about loyalty, though. I always use the little place fifteen minutes walk down the hill from my house. It smells faintly of damp dog – because you can bring your dog in – and charges £6 for a standard trim. I took my son there for his first cut, and now we continue to go independently. I wouldn’t think of getting my hair cut anywhere else, until now.

The new barber is part of a resurgence in our high street, an uplift to C21st retailing with a vibrant new artisan café, a decent pizza restaurant and as of this week, a new barber. All startups, entrepreneurs pushing themselves with passion, creativity and expertise.

My wife thinks I should try it. But then my wife thinks I should go almost anywhere other than my usual place. Though she agrees with me that £6 for a haircut does indeed represent great value for money, her feeling is that the quality of the work that my £6 buys is variable and can range from what she might merely describe as a bad haircut, all the way through to something more closely resembling a full-blown act of self-harm.

Whilst sometimes she may well have a point, they’re both haircuts, aren’t they? It’s just that one is shorter than the other and gives me a few more weeks before having to visit again. My wife thinks I should go to her hairdresser, who does blokes and ladies. I scoffed the first time she suggested this. Why would I spend £15 on a haircut? I asked. There was a slightly awkward pause. Apparently, £25 would barely get your hair combed, let alone cut, at my wife’s hairdresser.

But it’s about allegiance, as well as convenience and familiarity. At the barbershop favoured by my son and I, our hair gets cut by two men, known to us after more than two decades of custom, as ‘our bloke’ and ‘the other one’. We’re on first name terms with Dave and Ken, but we have our own routine: if ‘our bloke’ is busy when you go in, ‘the other one’ does it. Hence the typical exchange when one of us comes back with a haircut: Who did you get? Our bloke? No, the other one.

And the finale of each performance – because that what a haircut is – I always look forward to the pointless ceremony with the mirror, showing me how the back of my head now looks. This is my opportunity to comment critically, but I think both of us know that’s not going to happen. In twenty years of the ritual of being shown the back of my head by our bloke or the other one, I have only ever said: Smashing, just the job, that’s great. Thank you. You don’t want to appear difficult, especially if you don’t really have an opinion in any case.

If, during the mirror inspection, it emerged that the barber had, say, removed a portion of my ear, I might just be motivated to ask him if he would have another look at it. In the main, though, as long as I’m not actually bleeding afterwards, I tend to be perfectly happy with the haircut as given. Then I pay £6 and leave. See you next time.

But maybe it could all be different in this bright new emporium, a new pair of scissors and groomer with whom I would have to cultivate a new relationship, and potentially, a whole new experience of lights and music and herbal tea. On the other hand, it would cost a lot more than £6 a throw – starting at £15 looking at his price board. For a haircut! And wouldn’t I miss our bloke? Not to mention the other one.

If I switched, then maybe the first few cuts would impress, then start to get a bit sloppy until weird bits of hair are sprouting in all the wrong places? Why would I change? £15 for someone to attend my personal (reducing) follicular assets; just set it at number two to avoid the Humpty Dumpty look.

The challenge for the new barber in town is winning new customers and early adopters, the goal of any startup. He has to provide a gesture that he has a different value proposition for them, to connect with them – customer attraction and retention is what turns a start-up into a high-growth business.

Have you noticed that the really big startup wins in the last couple of decades have come from creating and dominating their market with compellingly different value propositions? Steve Jobs was a master of this, preaching the need for new thinking as he introduced the iPad, iPhone, and Apple Watch. Uber and Airbnb have subsequently done the same.

Many entrepreneurs tout their new technology and solutions as disruptive, implying that the change is so dramatic as to open new markets and win hordes of existing customers, switching from the incumbent providers. In many cases, this approach fails by confusing customers. The goal of a startup is to orchestrate major change without disruption, by making it seem natural and even the customer’s idea, a progression or evolution to a new provider.

Related to my barber scenario, Michael Dubin, founder of Dollar Shave Club, is a great example. The disposable razor blades market was dominated by a couple of companies, mostly Procter & Gamble’s Gillette brand. Dubin launched the business of selling razors because he was fed up of paying for expensive disposable products, and was always running out of them. His new business would offer customers easy access to good-quality razors via a subscription service.

Dubin tapped into this pool of consumer resentment with an amusing commercial video on YouTube. He touched a collective funny bone while generating demand for his razors. His pitch – the video’s title was Our Blades Are F***ing Great – played well to men annoyed by the rising cost and myriad features of disposable blades, and mocked the established brands while claiming to offer better value. The video has so far had 24m views. https://www.youtube.com/watch?v=ZUG9qYTJMsI

Though not the first personal care subscription service, Dollar Shave sent exactly what was ordered. Initially, customers receive a razor handle and pack of cartridges. Each month thereafter, replacement cartridges arrive at their regular price of $1, $6 or $9. In addition, the company sells so-called ‘premium’ products, such as shave butter and post-shave cream.

Dollar Shave Club has not been the only underdog in its sector. In the UK, King of Shaves, a male style and grooming range, started out as a challenger to the status quo. The impact on the industry leaders from both became noticeable as online sales took off.

They attracted plenty of attention, with a $1bn valuation after raising $90m in 2015 Eventually Unilever, showed an interest and bought Dollar Shave Club for $1bn – hardly a steal at x5 2016 revenues. From nothing, Dollar Shave Club had a 1% market share in just three years, building on what Dubin seems to do almost effortlessly: connecting directly to the consumer with irreverent marketing and a sense of purpose, with a back-to-basics approach.

Dubin’s gamble was that people would be prepared to pay for his blades in advance, and that a delivery service would add value and convenience for his customers with his “SAAS” (‘shaving as a subscription’) model.

Some brave and bold moves saw Dollar Shave Club elbow in to a mature, existing market, dominated by strong brands. Figuring out a go-to-market approach is no trivial exercise for a startup. Start by identifying a small number of very specific customers, put yourself in their shoes by thinking about their issues and by talking to them not about your product but about their challenges and pain points (this is Steve Blank’s ‘customer development” process’.)

Once you’ve taken these steps, you can experiment with a go-to-market approach with the expectation that you’ll continue to refine and change it based on experience and further insights, but without understanding the customer’s issues, it’s almost impossible to get right.

So what are the key elements in the ‘go-to-market’ strategy for a startup? Here are some thoughts on things that can set you on your way for rapid early customer attraction and becoming a high growth business.

Make thinking differently part of the company culture If your vision is building a new offering, then product innovation and design needs to be in the culture of everything you say and do. Being disruptive means getting customers to respond ‘I didn’t know you did that!’ and show them significant added value they didn’t expect.

Create a powerful and provocative story of a new view Better solutions may be cheaper or faster, but they are not always different. Different requires a new view with logic or an emotional appeal that stretches a customer’s brain, allowing people to see themselves benefitting from the solution, outside the normal justification parameters.

Condition the market to expect something new A startup is about changing people’s consumption, usage, and buying decisions. Why would they switch from one trusted barber to a new one? What will impact their thinking, their emotions and stir their curiosity? You need to build momentum as this helps people move away from the way they used to think, to a new frame of reference.

Know your customers Sounds obvious, but listen to your audience and understand the issues that your product or service must address. Work out who needs you most and what you have to do to get on their radar, and keep in touch with them regularly so you know what’s going on at ground level.

Make it personal Be clear about your personality and purpose, be memorable, and give customers a reason to believe in you – and to talk about you, advocacy is a great sales asset. Word-of-mouth recommendations are great for business growth. Incentivise customers to stay with you and reward them for referrals.

So, will I stick or twist with my choice of barber for my next haircut? Dollar Shave Club shows how you can reinvent an existing business model in a traditional, stable sector, so I’m curious about the new shop to see if they can out do our bloke or the other one. When I sit in the chair, will they start at the front or back? Top or bottom? Swivel the chair or walk around? One thing for sure, he won’t greet me with Our Blades Are F***ing Great!

Lessons in entrepreneurial thinking from Greek philosophy

May 2, 2018

Many of the everyday fundamentals of our Western lifestyles owe a debt of gratitude to the Ancient Greeks – democracy, drama, all-action blockbuster war epics, and lying around thinking about stuff, or philosophising as it’s known. All beloved activities in the Eastern Mediterranean 2,500 years ago, and all still popular today in our house – as well as other aspects of their culture including souvlaki, retsina, lashings of taramasalata and a big, chunky feta salad.

Greek dancing and plate smashing are optional and mostly accidental at home, but my affection for all-things Greek stems from the fact that I met my future wife as a student whilst on holiday in Corfu back in the halcyon summer of 1984.

A Greek holiday romance which blossomed to the sun drenched sounds of bouzouki, fuelled by dolmades and lashings of ouzo, and survived the return flight home, as did the irrepressible deities etched on some hideous cheap pottery bought as presents. Dôs moi pâ stô, kaì tàn gân kīnā́sō.

So every time we have Greek food – yesterday Moussaka’s had an extra fluffy topping of cheese and béchamel sauce – the Greek influence on our way of life and their pioneering attitudes once again came into my thoughts.

The Greeks were thinkers, half decent too, and there is no doubt Greek philosophy can help us understand more about ourselves as entrepreneurs. Accomplished entrepreneurs like Reid Hoffman and Peter Thiel credit their philosophy backgrounds for their success, and after all, many of the qualities that make outstanding entrepreneurs are the same for philosophers – both require clear, critical thinking and strong communication skills to socialise their ideas to a wider audience.

Although today’s entrepreneurs obviously live a very different way of life than Plato did, a lot of what he had to stay still applies to what we all long for: to be happier and more content in our day-to-day living. Three quotes from his writing struck a chord with me when thinking about this blog as being very relevant to startup thinking:

Wise men talk because they have something to say, fools because they have to say something With so many opportunities to voice your opinions online and in public these days, it can be difficult to just sit with your own thoughts. Plato reminds us that we should only speak when it is of benefit, and not just to toot our own horns.

The beginning is the most important part of your work. Make a start! All to often we put off doing good work and losing opportunities left, right, and centre because we never start. Fear stands in the way for some, but Plato encourages us to just get our hands dirty and see what transpires. Even if we fail, at least we know the outcome. Never starting doesn’t teach us anything.

If a man neglects education he walks lame to the end of his life. Entrepreneurial life is full of amazing things to learn and opportunities for new experience, but you have to take them. Don’t cut yourself off from all the things that are out there just waiting to be consumed and understood by you in your search for revenue, a startup is much more about learning than money.

Philosophers have a reputation for freewheeling thinking, open minded and thoughtful, but maybe metaphysical, lost in the context of their times, so is there any relevance for today’s startup entrepreneurs? Look again, I find that, in reality, the Greek philosophers were very realistic and pragmatic. They understood that things often go the opposite of the way that we want them to go, so they’re resilient, and it’s all about thinking things through and reflecting. Doing so will make you a more successful, thoughtful and self-assured entrepreneur.

As an entrepreneur, adopting some of these philosophical approaches can transform negative emotions into a sense of perspective and prepare you to have the right state of mind. At its heart it’s about controlling things, which are in your power to control and ditching the rest. So let’s look at the traits of Plato and others, and how we can benefit from their philosophical outlook on life for our startups.

They love of debate An important trait that all philosophers have is the ability to follow an argument all the way to the end. As an entrepreneur, it’s an essential skill, for example, if you’re sitting in front of a potential customer.

Equally, healthy discussion becomes more important when your business starts to grow, debate is often the key to finding the most effective course of action from a range of options. Encouraging your team to share a different point of view is healthy. Remember, you’re not trying to win arguments (‘be right’), rather, you’re trying to find the best path forward (‘get it right), so embracing other perspectives is powerful.

They’re comfortable with the uncomfortable As an entrepreneur, you have to make decisions on issues that aren’t always conveniently shaped in black and white,  you have to get comfortable working in an environment of uncertainty and unknowns – if you want a guarantee, buy a toaster.

It’s a steep learning curve ploughing your way forward in a startup, but for philosophers, ambiguity is nothing new. Embracing it teaches you to manage uncertainty and stay calm. As an entrepreneur, you’re always, in the words of Walt Whitman, conquering, holding, daring, venturing.

You’ll likely spend a lot of your time operating in the unknown, so you’ll need to be able to tolerate ambiguity. Next time you find yourself at a fork in the road, think about making a decision with 51% confidence, simply look at the balance of outcomes and make a judgement call. While it’s not ideal, it’s far better than procrastinating and waiting for ideal or easy solutions that never present themselves.

They see the big picture in the smallest details If you can’t see the big picture, you’re lacking direction and consequently can end up going randomly anywhere, wasting time and energy. It’s easy to get sidetracked by details and suddenly find yourself struggling in the long grass.

Taking a more philosophical approach helps you envision how smaller decisions will eventually fit into bigger ones, playing back your thinking. One way to ensure that you’re always on the right track is to step back, reflect and go back to your vision and big picture, and your broader horizon, and consider how minor tweaks might affect your future expansion plans.

They keep their emotions in check Your passion makes the difference as an entrepreneur to what you do, but never confuse enthusiasm with capability. In philosophy, you learn to detach from your emotions and make decisions with sound logic. As an entrepreneur, that’s a valuable lesson, since it’s easy to fall in love with a new idea, and overlook obvious flaws.

They dissect complex problems Einstein said, If I had an hour to solve a problem I’d spend 55 minutes thinking about the problem and five minutes thinking about solutions. This thinking highlights a skill that philosophers have mastered: the ability to break down complex problems into simpler ones.

As an entrepreneur, you’ll have to solve complex problems early and often on your startup journey. You’ll have a leg up if you can break the big stuff down into digestible pieces, rather than trying to solve it all at once.

Recently the philosophical approach of Stoicism has become an influence on entrepreneurial thinking. Stoicism is a philosophical practice considered to be a complete way of life. It focuses on these four core principles:

  • Make the best use of your time
  • Be the master of your emotions
  • Walk the path of virtue
  • Develop self-mastery

In the increasingly competitive, confusing and complex digital world, the key is stripping back the nonsense and keeping things simple and straight forward, it’s vital we focus on the signals and not the noise.

Stoicism reminds us that amidst this maelstrom, we are required to be mindful, fully present and aware, and exercise self-control, rather than being lost to emotion and lost to random thought processes. It can build the resilience and state of mind required to rebound from knockbacks.

The things you think about determine the quality of your mind, so lets look at the four tenets of Stoicism and how they impact an entrepreneur.

Make the best use of time Some periods of time are snatched from us, some are stolen and some simply seep away. Yet the most shameful loss is the loss due to carelessness – Seneca

Seneca reminds us to not waste our time because time is precious. In other words, live your life with intention and be the master over your time. Be clear with your intentions for the day and be firm on getting goals complete. Design your week in a way that makes sense for you

Be the master of your emotions The Stoics teach us that unpredictable things happen in our lives that we can’t control, but we can control how we respond to events. Responding (as opposed to reacting) requires you to be in control of your emotions and thoughts, and in control of your daily habits.

Entrepreneurs often have to figure out a way to make something possible within all the things that are impossible, and can’t waste time complaining or blaming because of deadlines to meet – we have too much on our plate to worry about that.

Take time to think before responding to pressure and avoiding immediate reaction is a difficult style to develop, but invaluable. If you’re frustrated with a business situation or a chain of events that is seemingly running away from you, close your laptop and go outside, calming your emotions will help you to think more clearly.

Walk the path of virtue As a startup entrepreneur, there will be plenty of ethical dilemmas in your company, requiring you to make difficult choices. Take a moment to think through the possible ways you could respond, and consequences. Cross out the negative responses and circle the positive ones. These are your virtuous reactions.

Develop self-mastery The Greeks famously called this form of self-discipline askesis. Seneca writes It is precisely in these days that we need to discipline our spirit… for the spirit gives the strongest proof of its resolve by not being attracted or distracted by pleasures which lead to self-indulgence.

Developing self-mastery and rigorous self-discipline enables you to become a master over your time and your actions, and can result in incredible helpful outcomes. Zeno said Man conquers the world by conquering himself. The core of his philosophy consists of virtue, tolerance, and self-control.

Entrepreneurs need to be able to achieve goals within specific time periods, they want to see quick results. That’s not to say you can’t have any self indulgence, though, we are human, but taking a more thoughtful approach adopting some of the lessons from Greek philosophers has merit. Instead of the usual headlong rush into getting stuff done, take a deep breath, open your mind and speak the future into being.

As an entrepreneur, if you believe, as the Greeks did, that man is at the mercy of the gods, then you write tragedy. The end is inevitable from the start. However, if you believe that man can solve his own problems and is at nobody’s mercy, then as an entrepreneur you will probably write melodrama and romance.

Which takes me back to Corfu, August 1984. In the middle of a relentless hot sunny day, I relaxed under an awning outside of a cafe biting into a goat’s cheese and carrot marmalade sandwich, the Mediterranean sea breeze blowing gently, starting a discourse which has become a constant, lifetime conversation with a girl from Oldham. We danced outside the Vassilopoulos supermarket I recall, but that’s another blog.

Choose your startup co-founder like you would a spouse

April 24, 2018

They started to arrive about eighteen months ago, an endless cascade of luxuriously quilted envelopes, thumping onto the doormat. The wedding invitations. Nothing to do with Harry and Meghan, but friends of my children. It’s that mid to late twenties age group.

It’s unstoppable, luxuriously creamy envelopes the thickness of a letter bomb containing a complex invitation. They are a triumph of paper engineering, a comprehensive dossier of mobile phone numbers, email addresses, web sites, how to get there, what to wear, Amazon gift lists.

This isn’t the first wave of weddings I’ve been witnessed, that was when many of my contemporaries married soon after university. In these wedding photos the bride and groom are seen raising pint glasses, raucous groups of silly 1980s haircuts, and modest wedding gifts.

There was a second wave, the late-twenties weddings, which still retained a little of that tongue in cheek home-made quality. The most memorable was a reception that took place in the groom’s parent’s gardens in Bristol, vows were self-composed and rigorously secular. But a cold, hard edge of professionalism had started to creep in: the idea of the pre-prepared ‘wedding list’ had begin to rear its head.

I remember the ‘entertainment’ was from an all-girl band – including the bride – that had obviously taken a series of wrong-turns and bad choices in their musical direction. Their sang their own songs, one was about miserable summer jobs. The bride subsequently packed up the band and took a course in Circus skills until is transpired that she had none. Trapeze was not the answer.

Then the third wave emerged, proving to be the most spectacular, weddings of friends in the early to mid-thirties who had been working for the best part of a decade, and had some money to throw at a once-in-a-lifetime event. Country House hotels, vast marquees like Bedouin tent cities; silk grey morning suits and top hats, hired and worn with absolutely straight faces, string quartets and Ceilidh callers, even ice sculptures. One couple left the reception in a hot air balloon.

Now I’m on the fourth wave as I say, friends of my kids. This weekend I was at one in Cheshire. I was on table twenty-four, near the back of the room. I didn’t take it personally, although I was tempted to tamper with the seating plan. What’s the main course I asked? The rumour mill says salmon. Salmon, salmon, salmon at weddings, I feel like swimming upstream.

A wedding requires immense reserves of love and commitment and time off work, not least from the guests. Confetti costs two pounds a bag – it had to be Vintage Rose Pink and White Heart Biodegradable Tissue Paper Wedding Throwing Confetti. A bag of fragrant boil-in-the-bag jasmine rice from Aldi wasn’t approved by my wife.

Will it be bonding, soul mates for life, or the start of melancholy, wet winters of recriminations, slammed doors and watching TV together in silence?

It’s really not an exaggeration to say that hooking up with a new partner launching a new business is just like getting married and gaining a spouse, you embark on a joined-up hope-fuelled journey towards a bright and optimistic future. So you should prepare for a co-founder relationship in much the same way you would for a marriage – even when two people are a perfect fit, there are going to be times when someone needs to speak up, and say something difficult.

Great co-founders can make even the worst times feel fun and bearable, they will sit with you at the bottom of the pit on your lowest day and tell you that it’s going to be okay. This relationship can determine the success or failure of your business. When you build a business with someone, your lives will inevitably intertwine, and as in marriage and business relationships, you have to have each other’s backs.

Many successful companies were built by productive co-founder relationships. How did these individuals find their business buddies, and what made their combined skill-sets a successful collaboration? Not surprisingly, many were long-time friends, classmates, or relatives, but there is a common trend: the most well-rounded co-founders recognised their individual limitations and respect what the other brings to a partnership. Let’s look at a few examples.

Larry Page and Sergey Brin founded Google (1998), meeting at Stanford’s PhD program in 1995, but they did not instantly become friends. During a campus tour, Brin was Page’s guide and they bickered. Despite their quarrel, they worked on a research project together, The Anatomy of a Large-Scale Hypertextual Web Search Engine, which became the basis for Google.

Steve Jobs and Steve Wozniak founded Apple (1976). They became friends at a summer job, Woz was busy building a computer, and Jobs saw the potential to sell it. Why did their partnership work? Woz admits that he never thought to sell his computer model, that was all Jobs. Woz’s technical skills paired with Jobs’ business foresight makes the two an ultimate business match.

Bill Hewlett and Dave Packard came together in 1939. Classmates at Stanford, following graduation, they went on a two-week camping trip, and became close friends. Shortly after they started HP. Why did their partnership work?  They were best friends that clicked because they had complimentary strengths and were driven by joint-achievement, not personal success.

Francis Jehl was Thomas Edison’s lab assistant at the Menlo Park research facility as an eighteen year old, straight from school. After the completion of Jehl’s first assignment, Edison noticed Jehl’s work ethic and was so impressed that he started to work collaboratively. Whilst Edison regarded Jehl as a co-founder, not all entrepreneurs need an ally.

Research shows start-ups with co-founders are four times likely to be successful than those going solo – a strong case for forming a double act. Going it alone it’s easier to make decisions quickly and go for it, and generally you can’t fall out with yourself, and you also learn more – by necessity.

Alternatively with a co-founder you have the benefits of ‘two heads are better than one’, improving decision making and being more likely to reach the right outcome faster. With a co-founder, you’re also not spreading yourself too thinly, taking responsibility for everything, and working with complimentary skills and doubled bandwidth, more gets done.

So, everything considered, what are the attributes you should consider when seeking a co-founder?

Aligned motives If one founder wants to build a cool product, another one wants to make money, and another wants to be famous, it won’t work. Pay close attention and unearth true motivations, which are revealed, not declared, it’s better to get that out in the open early and talk it through.

Personal compatibility Play a couple rounds of monopoly together, just to see how they react to opportunity and adversity – and if there is humour in the relationship. There are of course other such ways to gauge this but don’t co-habit without dancing together socially first, doing something outside of work with your potential future partner may be eye-opening.

Future skills matter more than present skills It’s impossible to judge the potential skills of a person on day one. So instead, while we don’t predict future skills, avoid giving too much importance to current skills too. Startups demand different sets of competencies at various stages in their journey – being a CEO of a startup means being the Chief Everything Officer initially – co-founders need to be fast learners in order to acquire new in-demand skills.

How will decisions get made?  This is a fundamental tenet of the relationship and BAU operating model. If it’s tied to voting the number of shares, you’re on dangerous grounds. Setup a management board and decide what kinds of decisions are made by the board, and which ones don’t. Common areas to address are decisions around hiring/firing, pricing and employee salaries.

Learn to trust each other The underlying question here is Can the founders work closely together for an extended period without killing each other? If one or more of the founders has some ‘tic’ the others don’t like or if there’s some odd feelings there, it might be overlooked in the rush to include people on the team who have a particular skill. Basically, can you spend 24/7 time together and have trust, tolerance, space and stretch when needed?

What it’s like to share the highs and lows, the successes and the failures, and the feeling of having someone alongside you, shoulder-to-shoulder all the while confident they think the same way? By merging their disparate talents and idiosyncrasies, effective co-founders sync when it comes to the course they co-charted. That kind of strategic cohesion is the secret sauce behind successful startups, so try to create that serendipity in your own startup enterprise.

Of course, besides the ‘strategic’ stuff, there’s also the everyday realities of working together. The face you see day in and day out, no matter what hour of the day, what day of the week, will be your co-founder. They know everything about you – while it may start with knowing about your business personality, their knowledge of your life will soon extend to everything personal. They will also know what your poker face, happy face, sulky face, and goofed-up-big-time face looks like.

Whether you’re married or not, your co-founder will always prove to be your alter spouse, so what about the real day to day issues you need to be aware of when selecting a co-founder. Here are a few:

Tantrums and bickering Each mind is different and there’s going to be noise. It will be fun for the honeymoon – and then reality sets in as you deal with everything under the sun. Hopefully your passion for the startup will always be enough adhesive to bring you together again.

You’ll learn about each other’s likes and dislikes Your co-founder will know what order to place for you at the coffee shop. The same goes for you, you’ll know if she prefers to work with music on in the office or in the quiet. More times than not, you’ll have learnt these things the hard way

Washing the pots In a startup, there will be loads of little, time consuming things to do and only the two of you. You’ll split the workload between yourselves, the good chores and dirty chores alike. Remember, the most important four words for a successful marriage: I’ll do the dishes.

Compromising to get along You’ll be scanning every small area of expenditure. There will always be disagreements over what you need and what you don’t need, and learning to compromise is key.

Keep it fresh Like spouses, business partners need their own ‘date night’, relationships won’t flourish without regular, open and honest communication.

The things that make startup co-founders work effectively together reflect spouses’ relationship in a successful marriage. Most important it that you make it a habit to set aside time for getting together to review priorities, discuss challenges, concerns, frustrations and generally check in with each other.

In the end, the best way to determine whether you should work with someone is to choose a co-founder like you would a spouse. The best type of relationship is the kind where you share a vision and purpose, see yourself building things together, where you know there is give-and-take.

Marriage is a wonderful invention, then again, so is the bicycle repair kit, but it offers us insights and parallels to a successful co-founder relationship. They say don’t marry the person you think you can live with, marry the individual you think you can’t live without. Apply the same to choosing a co-founder.

When you feel like you’ve finally found that with someone, take the leap; don’t bother with those luxuriously creamy envelope for invites, just get on with it.

Van Gogh the entrepreneur: I dream of painting, and then I paint my dream

April 18, 2018

Einstein’s favourite habit was gedankenerfahrung, it’s when he’d close his eyes and imagine how physics worked in the real world, instead of formulas drawn on a chalkboard.

When he was 16 he imagined what it would be like to ride on a beam of light – how it would travel and how it would bend? He contemplated gravity by imagining bowling balls and billiard balls competing for space on a trampoline surface.

Gedankenerfahrung means ‘thought experiment’, daydreaming. Imagination has nothing to do with physics, but Einstein’s imagination is what made him a genius physicist, connecting his math skills to his dreaming in a way that let him see what others could not.

Entrepreneurs have something of this too, outlier success comes from them going out of their way to be disruptive, to make people think differently. Likewise artists, thinking in pictures and images, using their imagination to navigate the human experience to present new ideas.

Vincent Van Gogh was one such artist, where fantasy and reality merged in some of his most enduring paintings. With his bright sunflowers, searing wheat fields and blazing yellow skies, Van Gogh was a fanatic about light, giving the world many of its most treasured paintings. His 1888 Sunflowers remains one of the most popular still life in the history of art.

But he was also enthralled with night time. The painter of the most audacious, crazy, passionate, frenzied, unleashed bursts of brushwork, may be more evident in his daylight paint­ings, but in paintings such as his iconic The Starry Night, painted while in an asylum in Saint-Rémy, his touch is more restrained and you really see his craftsmanship and endeavour.

Van Gogh’s was only an artist for the last decade of his life. Before painting pictures that would adorn the walls of the most celebrated museums, he tried (and failed) at three other careers. He spent the final years of his life traveling through Belgium, Holland, and France in pursuit of his vision.

Alone in a studio or in the fields, Van Gogh’s discipline was as firm as his genius was unruly, and he taught himself all the elements of classical technique with pains­taking thoroughness. He had initially absorbed the dark palette of great Dutch painters such as Rembrandt. As an art student in Antwerp, he had the opportunity to see the work of contemporaries and frequent cafés and exhibitions.

There, having encountered young painters like Gauguin, as well as older artists such as Monet, the brighter colours and the expressive force he’d been searching for erupted.  He painted feverishly. And then, just as he achieved a new mastery over brush and pigment, he lost control of his life. In a fit of hallucinations and anguish, he severed part of his ear and delivered it to a prostitute at a local brothel.

After neighbours petitioned the police, he was locked up in a hospital. From then on, the fits recurred unpredictably, and he spent most of the last two years of his life in asylums, painting what he could see through the bars of his window or from the surrounding gardens and fields.

It seems that Van Gogh never dreamed his paintings would become such stars in the art firmament. In 1890, less than two months before he ended his life with a pistol shot, he wrote to a Paris newspaper critic who had praised his work, It is absolutely certain that I shall never do important things.

Van Gogh shot himself soon after painting The Starry Night and died two days later. Painted in June 1889, it depicts the view from the east-facing window of his asylum room at Saint-Rémy, just before sunrise, with the addition of an idealised village. Against the backdrop of this poignant biography, Van Gogh’s night pictures take on added significance, for it was to the night sky, and to the stars, that Van Gogh often looked for solace.

The night scenes captured his interest in mixing dreams and reality, observation and imagination. He lived at night. He didn’t sleep until three or four in the morning. He wrote, read, drank, went to see friends, spent entire nights in cafés or meditated over the rich associations he saw in the night sky.

It was during the night hours that his experiments with imagination and memory went the farthest. The Starry Night he considered a failed attempt at abstraction. Vincent didn’t live to know that in his reaching for the stars, he had created a masterpiece.

The Starry Night was painted in Van Gogh’s ground-floor studio in the asylum, a view which he painted variations of no fewer than twenty-one times, depicted at different times of day and under various weather conditions, including sunrise, moonrise, sunshine-filled days, overcast days, windy days, and one day with rain. The Starry Night is the only nocturne in the series of views.

Although he sold only one painting during his lifetime, his radically idiosyncratic, emotionally evocative style has continued to influence artists to the present day. His unstable, impulsive personal temperament became synonymous with the romantic image of the tortured artist, using gestural application of paint and symbolic colours to express subjective emotions.

Entrepreneurs know the value of being innovative and memorable like Van Gogh, unlocking new conversations and possibilities. Modern day entrepreneurial behaviours mirror Van Gogh’s, so what we can learn from his attitude and approach to his art that will guide us in our startup thinking? Here are my thoughts, with quotes from Van Gogh to illustrate his entrepreneurial attitudes.

Open mindedness One must spoil as many canvases as one succeeds with. Van Gogh’s work was always drawn from a huge range of influences. His uniqueness was often the product of combining existing elements in new ways, with a prowess for producing something entirely his own, throwing ideas together randomly to discover new combinations and possibilities. This ability to create genuine uniqueness is a key trait of entrepreneurs.

Restlessness For my part I know nothing with any certainty, but the sight of the stars makes me dream. Van Gogh never succumbed to the stick-to-a-formula mantra. At the height of the success he pressed the eject button, and re-emerged with something completely new and unexpected. Not all of his experiments worked, but this willingness to try out new ideas, knowing that not all will triumph, is a trait every innovator needs.

Time you enjoy wasting, was not wasted I put my heart and my soul into my work, and have lost my mind in the process. Van Gogh was a thinker, hungry for new experiences to stimulate his creativity. Socialising your own startup idea with other entrepreneurs will help shape, inform and improve your thinking. Never miss the opportunity for gaining and sharing insight.

Reality leaves a lot to the imagination I dream of painting and then I paint my dream. Reality, plus a sprinkle of imagination and intuition, turns that which seems impossible into something that is possible. If you can imagine it, and you can believe it, you can achieve it by asking yourself the question, ‘What if?’ Then go do.

The ability to follow your gut instincts as an entrepreneur is vital to the creation process and carving out your own niche. Steve Jobs followed his instincts to create the iPhone as Michelangelo painted the Sistine Chapel.

You don’t need anybody to tell you who you are or what you are What would life be if we had no courage to attempt anything? You are what you are! Ignore the naysayers, your startup is your road of self-discovery. Listen to your inner voice and stand up tall knowing who you are. Like Van Gogh, have ambition that reaches way beyond your current horizon.

Your audience or customers are craving the unexpected – give it to them. I hope to make something good one day. I haven’t yet, but I am pursuing it and fighting for it. They want to be wowed. Why not come up with some novel, out of the box ideas like Van Gogh did, and give them a little clue about the depth of your uniqueness?

The artist can easily be pulled into copying what is ‘trendy’, but the best artist and entrepreneurs don’t copy, they produce outside of the norm. The most successful aren’t trying to think outside the proverbial box, they no longer see ‘the box’ as they aren’t trying to copy, they are interested in creating something new and improving upon what has already been done.

Be bold and experiment If you hear a voice within you say ‘you cannot paint,’ then by all means paint, and that voice will be silenced When a canvas (or any startup venture) starts, the learning and journey are as important as the end result. You should always experiment, prototype and be thoughtful about the whole process. Look to the future, but start with the small steps today. Van Gogh left many unfinished canvases, which may not have been true reflections of his intended meaning, but they added to his thinking.

Value critique There may be a great fire in our hearts, yet no one ever comes to warm himself at it, and the passers-by see only a wisp of smoke. Being different and disruptive doesn’t mean you shouldn’t listen to other opinions. Artists are accustomed to hearing direct critique, incorporating feedback into their work, and defending their choices.

Practicing accepting critique can vastly improve not only your products but your entire startup process. This is what stands at the basis of the Lean Startup Method — get feedback, iterate, improve and continue with speed in order to one day get it right.

Take pride in your work Paintings have a life of their own that derives from the painter’s soul. Van Gogh strove for perfection, to create something that resonated with his identity, a personal statement about himself. The products, content, and service you provide from your startup should be a reflection of yourself. Don’t be afraid to try new things, and don’t settle for ‘good enough’. Van Gogh told other artists to Make sure it’s so good it doesn’t die with you, and you can apply that to any product or service.

Keep working – do it for yourself One must work and dare if one really wants to live. Don’t let anyone’s opinion of your work stop you from doing what you are so driven to do. The work will evolve. Don’t ever try to deliberately force your work to fit the desires of the masses. First and foremost, focus on your practice. Second, make sure you have a strong, cohesive body of work. Third, make your presence known.

Prioritise consistency over heroic efforts For the great doesn’t happen through impulse alone, and is a succession of little things that are brought together People often assume that art is a part-time muse-fuelled blitz, pouring out genius. But that’s simply not the case. Though inspiration can suddenly strike, turning it into a tangible finished product is a matter of sustained effort.

It’s getting up every day and doing the work, taking thousands of fresh touches and refreshes alongside the productive mornings. It’s the same for your startup, it’s a combination of inspiration and sheer hard work.

Both the artist and entrepreneur must get their ideas and products into the marketplace and into the hands of customers We don’t know the artist who kept their art at home hidden away. The same is true of the great entrepreneurs, they got out of the building and their ideas into the hands of customers.

For Van Gogh, it ended in tragedy at the young age of 37 with a self-induced gunshot to the abdomen. During his life, Van Gogh produced some of the most revolutionary works of art the world has ever known. What’s holding you back from having the same ambition and impact? Gedankenerfahrung. Dream of painting and then paint your dream.