There is a phenomenon I like to call Entrepreneurial Attention Deficit Disorder (EADD).
EADD afflicts many entrepreneurs, but is a particular problem for primarily first-timers.
What happens is this — once the entrepreneur starts to understand all of the opportunities that are exist in the marketplace, they become easily distracted from the purpose of their intended start-up venture.
I tell entrepreneurs that EADD is the main reason I have them write and memorize a mission statement. It is not for outsiders, such as investors and bankers. The mission statement is for them to keep their focus!
I have often suffered from this condition. It becomes a compulsive reaction to perceived needs in the market.
I learned over the years (usually the hard way) to control my impulses. But I am not always successful.
Case in point. While Mike Naughton and I were working away on our book Bringing Your Business to Life I was approached by the editors of a new series of entrepreneurship texts being developed by Prentice-Hall to write a textbook on Bootstrapping. How could I say “no” to that??!! After all, I write and teach about bootstrapping all of the time. I rationalized to myself that all would go smoothly with the book with Mike and then I could dive into the new book.
Well, as they say in the world of entrepreneurship “stuff happens.” Mike and I got delayed a bit in our new book due to the decision to make one more major revision (a good decision). I forgot that entrepreneurs always underestimate the time and cost to get things launched.
And then we got the opportunity to do a second edition of our book Entrepreneurial Financial Management. How could I resist that opportunity??
And then my good friend Dr. George Solomon at George Washington University approached me about writing another new textbook. I have never had the chance to write with George, so again, I could not control my impulses and said “yes.”
And so it goes….
I guess I have a chronic and incurable case of EADD….
If you haven’t been to ideablob.com lately, you should take a visit. In addition to many new great ideas, they have two new links you should check out. One is to the Kiva B4B project that allows you the priviledge of helping out aspiring entrepreneurs in developing economies (have my Kiva card and use it proudly!). The other is to their Social Entrepreneurship Forum.
Risk. It seems to be at the heart of entrepreneurship. Whenever I ask a group to describe entrepreneurship, the word risk is always one of the first things people mention.
Most often people associate risk with failure — we call it “sinking-the-boat risk.” We know that only about half of entrepreneurial ventures make it five years (for the record, the 10-20% figures most people cite are urban myths). The complex and uncertain economic times that we now face only heighten the risk of failure in people’s minds.
The other type of risk is one that is not always given its due. There is a corresponding risk associate with not pursuing an alternative — we call this “missing-the-boat risk.” Entrepreneur Charles Hagood, co-founder of TAG and HPP, describes this type of risk in our book Bringing Your Business to Life, “We weren’t as aggressive in the very early days as we probably could have been. I think we didn’t realize all we had to offer. I think we lost a lot of opportunities in the very early days, not recognizing what was there.”
Just as the risk of failure can increase during tough times, so can the risk that we miss viable opportunities. People seem to get too cautious during times like these. But, a slow economy and inflation do not shut down new opportunities. There are still many great markets that are untapped or underserved and probably fewer competitors willing to take the risk to serve them.
Clearly we need to be more vigilant in assessing opportunities due to the enhanced risk of failure that is a result of these tough economic times. But there are still many opportunities out there, and those who pursue them prudently can still find great success.
Having grown up in Wisconsin, one of the things I miss is Friday night fish fries (although my waste line does not miss the fried part).
One of my former students from the University of St. Thomas, Jesse Ness, has an Internet business that sells freshwater fish such as walleye (my personal favorite), perch, blue gill, etc.
Now we former northerners can satisfy our hunger for these freshwater delicacies without having to brave the long cold winters and summer mosquitoes the size of small sparrows.
Walleye Direct is the name of his website. You can get freshwater fish “shipped overnight to your doorstep” and cook it up with one of the many recipes available at the website.
This is a great example of a business that leverages the Internet to create a “virtual” niche in the market.
The idea I picked to give advice to for ideablob.com Week at the Entrepreneurial Mind is one that offers an innovative product tied to wellness.
Individuals begin fitness programs each year, but set unrealistic goals or improperly structure their fitness programs and eventually lose interest. I’m developing a portable touch-screen device equipped with a heart rate monitor, acting as a personal trainer. The device uploads workouts from our website, where based off an individual’s fitness goals, they can build their own workout or use one of ours. The device displays progress charts, advice for future workouts, and can incorporate daily nutrition information. The website also functions as a social networking website centered around device results for exercise gurus, athletes, and anyone who enjoys living a healthy lifestyle.
While I think this is a cool idea, the entrepreneurs need to keep their eye on the big picture — that is the future of healthcare policy in the US — and not just their customers and competitors.
Wellness might well become the “next big thing” in healthcare. The reason I say “might” is due to the uncertainty of the elective and what healthcare plan ends up being passed in the next president’s term.
This is a great example of a good idea that may blossom or fade due to macro trends outside of the entrepreneur’s control.
If healthcare stays a primarily private sector industry, products like yours has a bright future. Health plans will be trying to implement more programs and initiatives to help their population of covered lives get healthier. As a society we have become too sedentary and are eating too many calories. It is taking its toll on health care costs. Insurance plans are trying to find ways to incentivize people to get healthier and use fewer resources for healthcare. Your product would be a great tool for this.
If healthcare goes with a more public payment model in the next few years, we will likely have all attention focused on lobbying to keep coverage for certain illnesses. We will also see resources going to create healthcare entities that will be able to maximize their market share of federalized healthcare dollars (think economic rent seeking). Not as much money will be going to wellness.
When I was and entrepreneur in the healthcare industry we paid attention to the macro changes in the 1980s and 1990s. We saw a shift from insurance to managed care and positioned our business accordingly. We saw Medicaid being pushed down from the federal level to individual states — again we shaped our strategy to meet this macro trend. We still paid attention to our customers and competition, but those really involved more short-term tactical decisions. Our strategy was shaped by the direction of those broader trends.
Don’t just look at your competitive environment — keep your eye on the macro trends that may shape your future. See which way the election takes our country as it will have a huge impact on healthcare and on the wellness sector you are operating in with your new product.
As a professor, I could not let this idea at ideablob.com go by without offering some advice:
People would become members of the site, and sell the copy write of a term paper they have written. Not as to be copied as plagiarism but as a foundation for their own paper. The seller would provide a brief description of their paper including length, synopsis and assignment. Students would build a reputation depending on how good of an idea they had, as according to the purchasing student.
What will you do if you win $10,000 for this idea?
To establish the website, and promote it. I would make sure everyone knows it wouldn’t be just a way for student to cheat out on writing a paper. Sometimes the hardest part of writing a paper is getting the ball rolling, by buying someones paper and using it as a foundation it would get the ball rolling and help students write more complete essays.
As a college professor — and one who has written on business ethics from time to time — I could not let this opportunity pass me by.
One of the entrepreneurial virtues that my co-author Prof. Michael Naughton from the U of St. Thomas and I write about in our soon to be released book is prudence. To be a prudent entrepreneur one pursues good ends while being careful stewards of the limited resources that are available for the venture.
The entrepreneur who pursues morally good ends, but does not employ effective and efficient means given the resources they have is “well intentioned.”
The entrepreneur who pursues “bad” ends, and does not employ effective and efficient means is “incompetent.”
The entrepreneur who pursues “bad” ends, but is effective and efficient is “cunning.”
Finally, the entrepreneur who pursues good ends with effective and efficient means is “prudent.” That is the desirable state for those who strive to be morally good entrepreneurs.
Let’s look at this idea using this framework.
It sounds like the people behind the idea have thought through many of the logistics. They are on their way to effective and efficient means.
However, I worry about the ends. While they do not encourage cheating or plagiarism, they sure will facilitate it. Rather than selling papers, could they not find a business model that creates a writing tool that helps students to “get the ball rolling” on writing without giving them an actual term paper?
If their ends are really to help students become better at writing papers, perhaps they should go back to the drawing board to find a new method that does not tempt their customers to be unethical and break all academic codes known to man.
Tune Your World = Music + Microfinance is the next idea I am offering advice as part of ideablob.com Week at the Entrepreneurial Mind. This one caught my attention as it addresses an issue that I hear about every day here in Nashville — the radical changes happening in the music can i buy topamax over the counter industry.
Here is their idea:
Every artist has the same problem of obtaining capital for their next recording. Tune Your World provides the solution of applying the principles of micro-financing to the music industry. Our groundbreaking approach is the creation of peer-to-peer micro-financing of new music projects – enabling fans to deliver start-up capital to aspiring musicians from developing countries around the world. Tune Your World operates on a people-to-people model. Musicians obtain funding for new recordings directly from their fans without giving up ownership or control. Our mission is to revitalize the music industry in places where the music industry has never worked very well. www.tuneyourworld.com
I like this idea. It addresses a real need for struggling musicians in the digital age — seed funding for recording.
The biggest challenge is going to be getting the musicians to repay their micro-investors. One of the things that makes the micro finance program Kiva.org so compelling is the high rate of repayment of the micro loans — I believe it is about 97%. If you cannot achieve that kind of repayment, you are not likely to have repeat “investors.” Without people coming back time and time again to reinvest in artists your Tune Your World will not be as likely to become a sustainable program. You need to help the musicians develop business models that will enable them to repay their micro investments.
In my third installment for ideablob.com Week at the Entrepreneurial Mind I chose to offer advice to the idea titled Helping Teachers PayOff Student Loans. Here is their idea:
I am currently working on starting a non-for-profit to help third-year teachers pay off student loans. Do you know that most teacher’s loans are three times what they will make in one year as a first-year teacher? Do you know that teacher’s annual increases do not even cover cost-of-living expenses? Do you know that most new teachers have to work a part-time job at night or on the weekends (and during the summer when they should be able to refresh and plan for the next year’s class) just to make ends meet? That means many of them can’t make the full commitment to the kids which is the reason they opted to get certified to and take a lower paying job to begin with.
Here is my advice:
You need to find start-up money from a foundation that supports education. Do some searches to see which foundations give money in that space. Foundations always have detailed information of specifically what they will and won’t give to, and often include a list of previous grants that they have awarded. You can find all of this on their websites. I would suggest you use the $10,000 as seed money to develop a strong grant proposal that meets their criteria. Hire a grant writing specialist as a consultant to help attract the big money you will need for this program.
Also, think about setting up an endowment with the gifts you receive. Donors like a gift that keeps on giving. By setting up the donations in an endowment you only use the earnings from the gifts each year to pay out to teachers.
I would make a giving the awards to teachers a competitive process. Develop criteria, such as community service or their engagement with students beyond the classroom, as how you evaluate each teacher’s application.
The second idea that I am commenting on from ideablob.com is College Connection Website – One stop location for all college students to find entertainment, events, and employment in their region:
The proposed website would effectively connect college students in a particular region, in this first case the greater Harrisburg metro area, alerting them to the best entertainment, events, discounts, internships, job openings, things to do, and places to see in the region. Part of the initiative also includes a student comprised team in charge of facilitating monthly events that will allow students from all participating schools to interact, network, and get connected to the Harrisburg area. The initiative is specifically targeting the brain drain in the region, facilitating student engagement and personal connection to the area so that they’ll be more inclined to stay after graduation.
My question to you is this a simple one. Where is the revenue stream?
An opportunity needs not only a market need, which you have addressed, but the ability to generate cash flow to support the costs and earn a profit (or if it is a social venture, build a reserve fund).
I am not saying that there is no possible revenue stream. I just don’t see that you have thought about that part of the idea.
The registration fees and money from student government suggested by the previous comment is possible, but I doubt that this would amount to much. Who would pay to support this site? Advertisers? Maybe, but they to see the likelihood of volume and the right people coming to the site.
You might have thought this was Small Business Week — however, it is really ideablob.com Week here at the Entrepreneurial Mind. They have asked me to be the guest advisor for the week. I will be posting some of the ideas from ideablob.com along with my advice.
Here is my first installment.
My fiancee and I were in a national student organization event in Atlanta when we joined the Entrepreneurial Challenge. We came up with The Hummus House. Our slogan was ‘Hummus where the heart is’. Essentially it would be a restaurant that produced and sold a large variety of hummus flavor, bread/pita, chips, and for non-hummus enthusiasts we could sell salsa, chips, sandwiches, and salads. We would also provide a list of wines or drinks that would compliment the flavors of the hummus. The restaurant would have graffiti on the walls, local artists paintings mounted on the walls, warm lighting and a welcoming atmosphere with local bands/musicians performing.
There is a reason that bankers run screaming from restaurants — they have high failure rates.
That being said, it always amazes me how well certain niche restaurants can do in the market. Before launching this concept, make sure that the market is big enough and passionate enough to support this very specific niche.
You need to find a location that has enough people passionate enough about hummus — sorry that ain’t me — so that you can sustain enough traffic to make this concept work.
Know that any niche restaurant may end up being a fad. Keep your debt low and your lease short-term so if the passion for hummus passes, you can ease out of the business with little residual financial burden.