As I advise and strategize with entrepreneurs, I am noticing a trend, particularly amongst those driven by creativity and passion.

It’s that their biggest strength- the creativity that sets them apart- is often their biggest weakness in business.

I have gone deep with the owners of some of the coolest, most interesting business concepts around, who are doing phenomenal, creative, impactful things with their businesses.  From the outside, it looks like they have a veritable goldmine.  But as I get to look at their financial statements, many of them are not making enough to get by.  Some aren’t making profits at all.

For many of these high-touch or creative businesses, the uniqueness that sets them apart is what keeps them from growing, reaching the next level or in some cases, even turning a profit.

For some, their unique service is in demand, but only at a price point that won’t support the business’s viability.

For others, their high-touch services are so specialized, it is difficult for them to be replicated- the owners are burnt out because they are working too many hours or they are having a hard time teaching their staff to deliver on the value proposition.

What do you do when the vision that drives you is what’s keeping you from being successful?

In these circumstances, compromise has to happen.

If you are in this position, are you willing to let your creative vision inform you, but also to scale back some of the uniqueness for the sake of growing the business (or staying in business)?

I hope you can make that mindset shift.  You don’t have to give up your values or your mission, but you may have to implement them in a way that cuts out some of the smaller details in order for the business to thrive.

The challenge is to do that in a way that is still appealing to the customer, as well as to you as an entrepreneur.

Is what’s setting you apart holding you back?

 

In order for us to move forward in our lives and our businesses, we need to take on risk.  However, there seems to be a pervasive feeling that being willing to sink or swim is required to be successful.

In my experience, that couldn’t be further from the truth.  In fact, one of the best things you can do is not take on more risk, but rather, mitigate risk.

Let’s say that you have a new business idea.  For many people, the logical next step would be to try to find an investor for the idea, or perhaps even fund it themselves.  But ideas don’t get you anywhere today- it’s all about the execution.  So, how can you take the risk out of this new business idea for yourself or an investor?

-Can you find some paying clients who will be willing to test or even better, purchase, the product or service?

-Can you build a working prototype to show your product’s functionality?

-Can you start out on a small scale and demonstrate that not only you can get customers, but they come back as repeat business?

-Or can you accomplish any host of other milestones that demonstrate your ability to execute the viability of the business model and the customer demand?

This doesn’t mean that you won’t have any risk, but it certainly mitigates the risk for you and for any other people (aka investors, employees, partners) you may want to get involved.

There will always be situations and circumstances that pop up that you didn’t or couldn’t plan for.  But the key is that if you plan for the situations you can plan for, at least you can focus on solving one issue that may arise- instead of having to put out a dozen fires at once.

I’ve yet to hear anyone say, “I’m so bummed that I prepared for that.  Boy, was preparing a waste of time.”  But I have dozens of examples of regrets for not being well enough prepared.

I’d err on the side of preparation any day.

 

Most people in business have a story of selling baseball cards in the school playground or other “Pre-Teen-Donald-Trump” type anecdote. Maybe you have one of those stories? I don’t. As far as business is concerned, I was raised to the “steady job” school of thought. Entrepreneurial habits did not come easy to me, but rather than limit me, I think missing some of those lessons actually helped determine my business growth.

Despite coming from the “dotcom” world, and having been a founding member of some startups, I have never personally borrowed money to start a business. Oh I have borrowed, been in some pretty hairy debt in fact, but never for business. The reason I wouldn’t accept even a penny of business loan is precisely because of those startups and personal debts.

Everything I have founded in my own business has been bootstrapped. People have called me fool, particularly venture capitalists, and people have offered me money.

Instead, my investment has come from revenue. My business was profitable from the first day, the overheads are low, and I would like to keep it that way.

The mindset of a funded business versus a bootstrapped one are significant

Bootstrapping changes how you think about making money, and forces you to focus on profit as the key metric from day one. Contrast this with funded companies who focus on eyeballs, brand awareness, membership numbers, and so on. A funded company can take staff on 1st class all expenses trips and buy foosball tables, have in-chair massages, use dentist chairs rather than office chairs. The bootstrapped company would like to do those things but wonders how it will increase the margin, bring more customers, or cut costs.

When I want or need something new, I launch a new product and fund it out of the proceeds

My trip to SXSW is being covered by a product launch, just as my trip last year was. I’m looking at buying a truck, I will pay for it the same way.

If you have the systems where you can get a new product to market quickly that people actually want to buy, then that is your go-to funding source. If you are interested in rapid product creation and launches, this is the exact process I use.

I would say the most important thing though is not even that. It is the mindset that you are working for your clients, it is your product serving a market. Funded companies have to consider many more outside interests in decision making. My goal for leaving my job and starting a company was mostly for the freedom that affords, when you have to answer to so many people then that freedom ideal becomes ever more illusive.

Anyone can spend money that does not belong to them and they didn’t work for.

A healthy company generates income from service and value, not by asking for it.

OK, your goal might be different, you might be in this purely for ego, to create the biggest, best known, most powerful organisation. It might be to knock Facebook/Twitter/et al off their perch. That’s fine, but to me that is sport not business. Businesses should make profit.

Here are my tips for bootstrapping:

1. Know your costs, and keep overhead down without sacrificing customer experience or the value you provide.
2. Build a war chest of bank balance for bumps and knocks that your business will face.
3. Be as productive as you can without taking on “walking overhead” (human beings are very expensive, especially when they are a net loss of profit rather than working to attract more profit). If you need more hands then hire freelancers on a project basis and manage them well.
4. Focus on your core business. Every organisation has a 80-20% rule where 20% gets most of the results and the remainder is either busy work, a distraction, or just inefficiency. Focus on your 20%.
5. Have systems in place to boost income quickly when you need to. This is the productivity and product creation process I use.

Bottom line is, like in personal life, it is tempting to gamble or spend in ways we can’t afford. Do you really need that swanky office? The herd of receptionists? That designer desk? Business Class travel? It’s not about being cheap, it is about getting your priorities right.

When you are working with others as a partner, service provider, co-worker or otherwise, it’s important to be able to compromise.  You will need to make concessions, and sometimes painful ones, in the sake of progress.

But while you may encounter situations where you need to compromise, you should never compromise your standards.

I have had many situations lately where this exact situation came up.  But as I am about 4 weeks away from the official release of my first book, The Entrepreneur Equation, it makes me reflect to almost exactly a year ago when I had to “break up” with my first publisher.

My draft manuscript- all 80,000 words worth- was finished in July 2009.  I had a major publisher secured just a few months later (yes, I know that’s the backwards route, but that’s another story) and we had set a September 2010 release date.

I knew going in that this type of partnership would require a lot of compromising.  However, it was a bit more painful than had been expected.

My brand is bold and provocative and I wanted the book title to be consistent with the brand and message, while also having other key features.  Then came January 2010, when I submitted my list of a dozen potential titles, each with a lengthy reason on why it made sense, to the publisher.

The feedback was that they were not acceptable.  But they had a better idea: “The Rules for Entrepreneurs”.

Not only was this the most boring title I could think of, there was another problem.  My book didn’t have any rules for entrepreneurs.  I could just imagine being interviewed on television:

Host: “So Carol, tell us your top 3 rules for entrepreneurs.”

Me:  “Well Bob, I would love to, but I have no rules for entrepreneurs in my book.”

I saw this as a huge problem- the publisher, not so much.

I wanted to compromise, so I asked them to give me guidance.  What was it that they didn’t like about my title selections?  What was it that they liked about The Rules for Entrepreneurs?  Was it the use of the word “entrepreneurs” for SEO purposes?  Was it a certain number of words?  What worked and didn’t?

There response: “There’s no special alchemy to coming up with a title.  Either it works or doesn’t.”

Fantastic.

They gave me 24 hours to come up with new titles.  My team and I scrambled to come up with another half-dozen acceptable titles, each with its own deep reasoning explained in painstaking detail.

Again, the committee didn’t like any of them.  They came back with the super-amazing, “The No-Nonsense Guide to Entrepreneurship”.

Clearly, they did not understand my brand, my message or my purpose.  Plus, “nonsense” is a word only used by Ned Flanders on the Simpsons.  I would at least say “bullshit”.  I couldn’t do it; the message was too important.

So I asked the publisher, in the spirit of partnership, what the options were.  The options were to take one of the two titles or to be released from my contract.

This was one of the toughest decisions I have ever had to make.  I desperately wanted to get my message out into the market.  I knew that breaking up with the publisher would have severe implications.  It would delay publication for at least 6 months.  Plus, I may be blackballed in the publishing industry, because who wants to sign someone who just broke up with another publisher because they couldn’t agree on titles (especially a first time author)?

I decided that I was willing to compromise, but not compromise my standards.

I set the intention that, come hell or high waters, the book would get published one way or another.  We broke up.  And within several weeks, I was fortunate to have three options present themselves and ended up with a fantastic new publisher, who better understood collaboration (and my brand).  And this time, the book became The Entrepreneur Equation.

So, how can you decide when to compromise or when doing so would be compromising your standards?  Ask yourself the following questions:

-Are you making the decision personally or emotionally?  If you remove yourself and your emotions from the equation, does making the compromise make sense?

-Does making the compromise get you closer to the intended outcome?

-How will you feel about the end product after you make the compromise?

-Is the product important enough to pick the battle, or is there another more important battle to pick?

Hopefully these questions will help guide you to decide when to compromise and when doing so would be crossing that line for you.

And now for the shameless plug: if you want to check out what I was fighting for, you can download a free chapter of The Entrepreneur Equation (and pre-order it) at www.TheEntrepreneurEquation.com.

A few people have told me recently that I have “seemed to come out of nowhere”, meaning that they had not heard of me maybe a year or so ago, and now my name is popping up frequently on their radar.  Part of me was totally confused, because I have been working my ass off for almost 16 calendar years (which, given the number of hours I work each week has to be at least 20 business-equivalent years).  But, I realized that I used to play in a different “sandbox” and to those in the new sandbox that I am hanging out in, it seems like I showed up overnight.

The same thing was said about my friend Jason Wu, who was called an “overnight sensation” after Michelle Obama chose to wear his stunning white chiffon gown to the inaugural balls.  And while her choosing that gown was certainly a fortuitous boon in the then 26-year old’s career, he had been working his butt off too, since age 16 as well, including as Creative Designer for another company for about a decade.

There are some folks who are just plain lucky, but the reality is that most of us create a great part of our own luck.  I hear a lot of spiteful comments about certain entrepreneurs being lucky or blessed, but the truth is folks, they have created their own luck.  They work hard and smart.

So, if you are working hard, make sure to give yourself some credit.  If you can’t take the time to acknowledge what you have accomplished and reap the benefits of your long, grueling and draining hours, then why are you doing it?  And hey, if you put a few naysayers in their place in the meantime, that’s just gravy.

I remember last year having lunch with a fantastic woman I knew who reached out to me as she evaluated her current career opportunities.  At the end of our meal, she thanked me for being willing to help her and told me she was “blessed” to have contacts like me and other colleagues that were willing to help her.

I looked at her with my head cocked sideways and said, “Blessed?  Being blessed didn’t establish this relationship. You and your hard work did!  If your last name was Rockefeller and I was here because of that, then you would be blessed.  I am here because of what you have achieved and your willingness to nurture a professional relationship over many years.”

She looked at me with wide eyes and then said softly, “Thank you for acknowledging that.”

Don’t wait for someone else to acknowledge it for you- take the reins and acknowledge your hard work.  If you win the lottery (financial, genetic or otherwise), then I will buy that you are blessed.  However, if you have worked your ass off, you have worked your ass off.  Don’t discount that.

The first rule of a marketable idea is that it will solve a pervasive customer problem.  Although it’s important to pursue a concept that you can dedicate your career to, it’s equally essential that you think about what the market needs.  You will not be able to earn a good living if there are just a handful of people who feel as strongly about your product or service as you do.  Starting a new business is time-consuming and expensive, so your idea should be one that makes a lot of people care because it cures their pain right now.

Be Clear and Credible

To learn more about the science of developing good ideas, I turned to Chip Heath, the co-author of Make to Stick: Why Some Ideas Survive and Others Die. Heath, who is also a business professor at Stanford University and has done a lot of research on this subject, says that sustainable ideas are credible and easy to understand.  For example, if you were an engineer pitching a foreign concept like a new energy grid, you could make it more relatable by saying that it’s “like an interstate highway system for energy particles.”

Beware the Curse of Knowledge

Heath also advises us to be careful of falling into the curse of knowledge trap. “Experts can’t imagine what it’s like not to have their level of knowledge, so their messages go over people’s heads,” he says.  Instead, develop two concrete examples of what you’re talking about, and then “test them out on a friend or family member who’s not in your field.”

Think Inside the Box

What if you have trouble coming up with the big ideas?  Heath has an interesting suggestion.  You can make it easier by narrowing your focus, or thinking inside the box – it’s much more manageable to brainstorm a list of white things in your fridge than it is to brainstorm in general.  Another idea is to piggyback your idea on a concept that’s already successful and attracts the demographic you want to target.  Let’s say you want to hold a fundraiser for a nonprofit you care about but aren’t sure where to start.  Why not look at the organization’s history to determine – and then mimic – the type of event that has attracted the greatest interest in the past?

 
Life is like a roller coaster, with peaks and valleys and even some corkscrews in between.  This is especially true for entrepreneurs. You will be going up, up and up and then all of a sudden- when you are on top of the world- bam, you fall off that cliff and go free-falling.  When one bad thing happens, it is unfortunate. But when you rack up a few bad situations in a row, it seems as if the entire world is out to get you.

So, how do you deal with the tough times?  Here’s what I do- I call it the Hissy Fit Cleanse.

I have been doing it for so long that I have forgotten exactly who inspired me, but I believe it was Barbara Sher.  At any rate, when the going gets tough, I have a full-blown fit.  We’re talking about jumping up and down, screaming, cursing- the whole kit and caboodle.  The only thing I try not to do is cry, and that’s only because my face gets puffy when I cry and I look like a blowfish for days (yes, I lean towards vanity over sanity).

What this hissy fit does is release all of the stress, tension and frustration from the situation.  It truly is cleansing for my mind and body.

But, then there is another very important part to this ritual.  After I have my fit, I compose myself and get directly back to work, focusing on the problem at hand.

A series of circumstances happened recently that changed some important factors relating to the launch of my upcoming book, The Entrepreneur Equation, including having to move its publication date to March 22^nd.  Everything had been going well and at the 11^th hour, a number of very important factors changed, and included throwing up some new roadblocks.  I had a total meltdown, complete with swearing and foot stomping.  Then, I regained my composure and said to myself, “How do I solve these issues?” That led me to reach out to some key people and get their input.

The funny part is that when I talked to my publisher, he said, “Carol you are always a pleasure to work with because you are so composed and calm and don’t let anything throw you-even in the face of adversity.” I was laughing when I heard that because I knew that that wasn’t the case at all.  But what was the case was that he didn’t get to see me losing it.  I did my hissy fit cleansing directed at the issue, not at other people, and by the time I spoke with him, we were on to problem solving. 

So here’s the breakdown:

1-Have the fit

2-Get it all out of your system

3-Refocus and attack the problem head on

I hope that “cleansing” can help keep you sane and get you through any rough patches

Somewhere in my mid-twenties, I read an article by the legendary Tom Peters. It as about “The Brand Called You” and it was in FastCompany magazine. On that very day, I knew that I wanted to better understand my own personal brand, such as it were. But if I’d left it at that, if I’d only taken away the idea that there was a brand called “Chris Brogan,” then I’d never have gotten where I am today. Escape velocity came to me after I started adopting the Owner’s Mind.

The Owner’s Mind

An owner is so different than an employee. She has to worry about a lot more. She has to care about the details. She has to hope that every element of service and experience are top shelf. She has to care that the steak came out medium well when the guest ordered medium.

An owner is someone who cares about where things are going, and who takes the initiative to make it really work.

I was an owner at my cubicle at the phone company, when I was a call center rep, helping people get their phones back after storms. It didn’t matter that no bosses really knew my name yet. That came with my change of attitude, because my customers knew me by name, and they started commending me, and I started taking on extra tasks from my supervisors, and then I started doing things I wasn’t even asked to do. How do you think that turned out?

Owners Think Big

Do you think I work for raises? I never did in the old days, either. Sure, I needed money. We all do. But there’s no way an extra $4 an hour is going to change the universe. Owners seek something more. They want access. They want responsibility. They want the chance to do big things.

When I became a project manager at my wireless company, I owned more and more responsibility. I took on challenges that other project managers didn’t find interesting. I took on messy projects that had a high possibility of failure. And sometimes I failed. But because I stepped up, I was noticed, and I got more and more power.

Owners Look for Opportunity

When you’re an owner, you seek the opportunities that lie hidden in other people’s complaints. You look for frustrations and seek if there’s a way to profit. You look for ways to buy and sell capabilities. You look for what has to go, and what has to come on board for you to take over the world. Opportunity comes from things others throw away as impossible, unimportant, or beneath them. Some of the richest people I’ve ever met own trash removal companies. No lie.

So, what’s your take? Are you ready to be an owner? Are you ready to “own” your life, own your business trajectory, own the fact that you’re not an employee?

Our entire lives are spent seeking out comforts.  The familiar plays on a misguided notion of safety.  The devil you know is better than the devil that you don’t know, right?

Not necessarily.  When you are too comfortable, it means you are probably not trying hard enough.  You have gotten to the point where you are “good enough”.  But good enough is not great, outstanding or groundbreaking.  Good enough walks on a treadmill, instead of blazing a new path.  Good enough doesn’t encourage progress. Good enough doesn’t change the world.

When you are uncomfortable, you are pushing boundaries.  You are trying new things.  You are willing to fail and fail big.  This is where amazing personal and professional shifts come from.

• In your workouts, being physically uncomfortable is where you gain increased strength, speed and agility;
• In your relationships, being vulnerable and uncomfortable is where you create true bonds with others;
• In your career or business, taking uncomfortable risks or doing work outside of your “comfort zone” is where you can advance yourself to the next level.

Get comfortable with being uncomfortable.

Comfort equals accepting the status quo.  If you don’t aspire to anything more, then go ahead and be comfortable. Uncomfortable leads to growth.  It’s scary and may be painful, but pain is temporary.  Your achievements are forever.

We Help Friends. We Do Work.

When I first started my business, all I wanted to do was share what I’d learned from years of publishing. I got such a charge out of helping people and the people I helped were truly grateful. The only problem was that I couldn’t figure out how to help people who could afford to pay me.

Helping is a good thing. Giving help to people who need it is a great way to develop a growing network. But giving away help without getting paid won’t build a business or satisfy a landlord. It wasn’t that long ago that I wrote “Why Is That Giver’s Don’t Get Paid?” Several people chimed in with their own concerns about the question. After a long night’s thinking, I came to this conclusion.
When I give away my time, I’m agreeing to that contract.

Sometimes I still work for love, but now I know when I’m doing that.

Help Friends, Do Work for Clients

If we want to get paid, we have to make a new contract, with ourselves and the people we want to work with. We have to change our thinking from “helping” to “doing,” — at least until we can separate what we do for love from what we do for money.

We help the folks we love. We help friends and family move house. We help them in an emergency. We help them care for their kids when their sitter calls in sick at the last minute. We help them solve problems and make decisions in their lives and in their businesses. We do that because we care about them. It wouldn’t be good to ever stop doing that.

We do work for people who pay us.

To get in the habit of separating the two, be deliberate.

• First, value what you do.
• Talk about your work without discounting. Drop phrases like “I’m trying to,” “I’m going to,” “I want to,” and “It may sound [silly, ambitious, impssible], but.” Instead, simply say “I [do, make, offer]”
• Make your business a priority. Carve out time in every day to do something that moves it forward.
• Keep learning how to do it better and keep track of what you’re learning. Nothing beats the confidence that comes with understanding the skills you’re gaining.
• Then, have a concrete goal. Tell everyone what you’re doing and what your goal is. Figure out what kind of help you will need to reach that goal and be able to explain it to others.
• Next, be able to state your offer in three bullets point of what you DO for people who hire you. Think through three things you actually deliver. Do you guide people to [set goals, develop a plan, generate new product ideas, present a more professional image, communicate with clearer copy and stronger design]? Know why you’re the best, most trusted source to do that. Even if you don’t have the hugest portfolio or the most experience, you bring something no one else can. What is it?
• Be professional. Ask them — tell them — what it’s worth and say out loud that you need to get paid to do the work.

A professional mover wouldn’t move our furniture without payment. They value their time and their work and can’t afford to give away to anyone who asks.

Neither can we.

So this year, before you “help” the next person, decide what kind of contract you want to be making. If you’re “doing” work, get paid.

Come to SOBCon and plan your business!