Starting a Business QuickStart Guide. Ken Colwell PhD MBA
Competitive advantage is the sum of conditions that put one business in a superior or favorable position over another. The elements that make up a winning competitive advantage are valuable to customers, rare, difficult to imitate, and not easily substituted.
A startup’s distinctive competencies are a key driver of that venture’s competitive advantage. Small firms are agile, and they often benefit from specialized knowledge, a high degree of team cohesion, and fewer internal bureaucratic barriers.
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What Are You Afraid Of?
Chapter Overview
Self-limiting beliefs that hold back would-be entrepreneurs
The fear of failure and the role of luck
Do you need a business plan?
Starting a business is a big step, and would-be entrepreneurs must ask themselves difficult questions. Many people have fundamental self-limiting beliefs and misunderstandings that prevent them from taking even the first steps. Before you begin, think carefully about the following items. Which of them apply to you? Are they holding you back from achieving your dreams? What can you do about it?
Self-Limiting Beliefs
One of the main barriers that holds us back is strongly held internal beliefs about ourselves and our ability to succeed as entrepreneurs. These beliefs are almost always based on generalizations or stereotypes about what “real” entrepreneurs are like or what the process of starting a business entails.
Here are some of the most common misconceptions that lead to self-limiting beliefs:
Entrepreneurs Are Born, Not Made
Everyone has an idea in their mind about what a “typical” entrepreneur is like. What is yours? Are they brilliant? Driven? Self-made? Charismatic? The answer may surprise you. In his 2003 book The Change Makers, Maury Klein profiled twenty-six of the greatest US entrepreneurs of all time. His conclusion? Outside of some very superficial characteristics such as “hard worker,” they really don’t have much in common. Some succeed in school. Some are dropouts. Some come from great families and others from broken homes. Some are very popular and sociable while others are loners and misfits. There simply isn’t an overarching “entrepreneurial personality.” Klein summarized what each of these men have in common as a series of intersections.
Every man had his own vision, his own style, and his own obsessions. Their common ground seems little more than a series of intersections where their ways of doing business crossed. No single explanation could embrace their roads to success or the routes by which they reached their destination. No formula or set of rules can transform one into a great entrepreneur any more than it could produce a great artist or scientist. 4
– MAURY KLEIN
Does this mean that successful entrepreneurs don’t share any common mindsets? Absolutely not. The remainder of this chapter explores not only the misconceptions that form the foundation of the self-limiting beliefs that hold would-be entrepreneurs back, but also the mindset changes that can help them approach their endeavors in a realistic and successful way.
The talent necessary to successfully launch a venture is the same that’s needed for any other creative endeavor. Think about learning to play the piano. A few people are born tone-deaf, and no amount of work will result in their being competent musicians. A few are blessed with natural talent and can become world-class pianists without the need for extensive formal training. The vast, vast majority of us fall somewhere in the middle. Maybe we’ll never play Carnegie Hall, but with enough practice and the right coaching, we can reach some level of competence. We can’t all be Mark Zuckerberg, but that’s okay. We should be following our dream, not his.
Quick Case: To illustrate the range of personalities that are no obstacle to success, consider the stories of three titans with entrepreneurial roots: Warren Buffett, Mark Zuckerberg, and Thomas Edison. Buffett was born in 1930 as the son of a congressman in Omaha, Nebraska. He expressed an interest in entrepreneurial activities as a child and worked in his grandfather’s grocery at a young age. He also dabbled in various other entrepreneurial undertakings, to the point of amassing a considerable amount of money as a child. His intention was to skip the world of higher education and instead head straight into the world of business; however, he was overruled by his father, who insisted Buffett receive a college education. Decades later, Buffett—in addition to being considered one of the most successful investors in the world—is worth over $80B. Despite his outsized wealth, Buffett famously lives frugally and is a noted philanthropist. His success has been built on building a plan, sticking to it, and repeating that process.
Contrast this approach with that of Facebook founder and CEO Mark Zuckerberg. Zuckerberg was born in 1984 in White Plains, New York. At a young age he became interested in computer programming, and by the time he graduated high school he had developed a reputation for being a programming prodigy. He attended Harvard to study psychology and computer science, and it was from his dorm room there that he famously created the first iteration of Facebook. Zuckerberg dropped out of Harvard to lead Facebook and has championed an approach to success that largely consists of the ethos “Move fast and break things.” Unlike Buffett, who sticks to the course he has laid out for himself, Zuckerberg channels what has become the Silicon Valley mentality of constant change, growth prioritized above all else, and what has been called “the hacker mindset.”
In 1847—eighty-three years before Warren Buffett was born—inventor and entrepreneur Thomas Edison entered the world as the last of seven children. He received only a small amount of formal schooling; he was homeschooled by his mother after attending public school for only a few months. After working for the railroad as a young man, Edison struck out on his own and obtained the exclusive right to sell newspapers on his local railroad. This endeavor morphed into a series of jobs that provided him income while he continued to dabble in his true twin passions of reading and experimenting. Edison’s legacy is that of a prolific inventor with over 1,000 patents to his name, but he was also a shrewd and successful businessman who founded fourteen companies. The most notable of these is General Electric, which to this day continues to be an internationally successful company. In his personal life, Edison followed a strict doctrine of nonviolence and lived as a vegetarian.
All three of these men have made an indelible mark on the world despite the differences in their background, education, and personal style that got them to their lifetime of accomplishment. All three worked hard, but, more importantly, a common thread that ties them together is a deep passion for the path that they chose.
I Don’t Have Any Business Skills
News flash—most entrepreneurs don’t have a business degree, and often their first experience in the business world is when they start their own venture. Business skills do help make the process an easier one, however, and will be required once you become established. This means you will have to acquire them yourself, create a team of people with the right skill sets, or hire experts. The contributions of your founding team are critical, and I cover founding teams at length in chapter 12.
Business skills aren’t a must-have, but there are two major skills that you will need. The good news is that, though some people are born with a natural aptitude for these skills, anyone can learn them. Even more good news: learning these skills won’t just