Steer the ShipTM

Having a business plan is good. Clinging to an unrealistic business plan is bad. A plan isn’t meant to be a cover. Sometimes it’s a sales tool, sometimes it’s a navigation tool, and sometimes it’s even an inspiration tool. But it should never make you feel like you can ignore what’s going on in the real world.

Business plans are usually written in a partial vacuum. Sure, they take into account a lot of research, knowledge, and experience. For startup ventures, however, plans rarely come to grips with the realities of the marketplace. The only way to get past speculation in a plan is to try to sell, manufacture, and manage a product while under fire from competition and real market forces.

Don’t freeze and settle for a short-term solution. As painful and irrelevant as planning may seem at the time, you have just the right mindset for it when you are pinned down in the trenches. Is this how you want your business to run? If you make it out alive, where do you really want to take your company?

The most important lessons are burned into your mind during extreme periods of success and failure. You can only take advantage of what you learn — and share those experiences with others — if you put everything in the context of your overall strategy. So seize the opportunity to change the course of events, and leverage the battle to drive a plan that really works for you and your company.

When the talking gets tough, the tough get talking. You read it right. But this isn’t about burning incense and sharing intimate feelings while accompanied by a pan flute — not that there’s anything wrong with that. It’s about talking frankly with your employees, your customers, your board members, and your shareholders when things really suck.

Unfortunately, too many entrepreneurs clam up when they feel the heat, and then run for cover. It’s natural for people to over-communicate when times are good. If you’re in the money and the future looks promising, you’re more apt to be the life of the party. But when the tide turns, you may want to shut everyone out until you fix the problem or have something positive to report. Welcome to “bunker mode.”

You may not even realize you’re there, but everyone else will when they see you dodging conversations about the business. Of course, there’s really no way to hide. Everyone will be suspicious when the emails and calls stop, and figure out that that there’s a nasty surprise on its way. Postponing the agony will only increase its intensity.

When you need a life preserver, don’t cut the rope that can pull you to safety. It’s unlikely that anyone involved will want you to fail. In fact, they’re most likely hoping that you’ll hit a home run. So reach out — before it’s too late.

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Business is all about finding opportunities and solutions to problems in the presence of constraints and imperfect information. If you’re a scientist or engineer, that should be pretty familiar ground. The question is, Can you can leverage your skills and abilities to build a company? The early-stage venture landscape is littered with inspired technical people who have failed to succeed in business. You don’t have to join the heap.

Being a passive student of business isn’t enough to grow a company. Passion and an intense desire to succeed are required ingredients. But you still have to add the intelligence and the tenacity that has served you well in research and development projects. Immerse yourself in your business “lab.” Plan, research, experiment, analyze, collaborate, act — and reset when you find yourself going down the wrong path.

The trick is to understand that the context is very different. In business, there’s always a person on the other end of a strategy or experiment. And relationships form the platform for success in any business venture. While building a company is much more of a science than most people think, it’s not a science project. In business, you have different stakeholders in the process, different metrics for your success, less real control over the results, and very little that remains constant. However, if you use what you know, and adapt to the environment, your business will be less likely to end up as an experiment in futility.

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You’ve probably heard some variation of Albert Einstein’s definition of insanity: doing the same thing over and over again and expecting different results. According to big Al, we’re probably all a couple of beers shy of a six pack, especially when we act like hamsters running on the wheel of business.

There’s a very good reason why we sometimes find ourselves trapped in vicious legal, technical, sales, or funding cycles. We take great comfort in following a formula for success. That’s right. No matter how smart and independent-minded we are, we love to follow the footsteps of the legendary entrepreneurs whom we worship. Just think about how easy that is to do when you’re cheered on by your consultants, your investors, and even yo mama (no offense) to keep doing the things that made someone else successful.

If your hero made a billion dollars, why shouldn’t you keep trying to do the same thing he did until it works for you? The answer is pretty simple. He got lucky. And chances are the only thing you know about is when he hit the jackpot, not the 27 other things that he tried before the blessed money-making events occurred. So before you drive yourself crazy trying to do the “right” thing over and over again, break the cycle. In other words, if you find yourself riding a dead horse, dismount. Find what works best for you and realize your dreams.

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It’s hard to think about steering a ship when it’s taking on water. And chances are that if a company is being flooded by troubles, patching up leaky strategies with dollar bills isn’t going to keep it afloat. The mission for both investors and entrepreneurs should be the same – fix the serious problems before money changes hands.

Unfortunately, some investors and entrepreneurs believe that the corollary to the adage “If it ain’t broke, don’t fix it” is “If it is broke, dump money on it.” The truth is that many problems can’t be fixed by money. Putting more money into a promising company that’s saddled with the wrong people, technology, business plan, or target market often reinforces bad behavior and ends up digging a deeper hole for everyone involved.

In a time of easy money, pumping funds into broken companies often passes for value investing. An influx of investment capital can extend the life of a company and unlock hidden value, but it can also paralyze change when it’s needed the most. As a result, any intrinsic company value can quickly go up in smoke as the flame of a systemic problem is fueled by cash.

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Stay tuned while we break for this brief commercial message. That routine may be OK for a TV talk-show host, but it’s not exactly how to go about commercializing a new technology or launching a new product. Many budding entrepreneurs get trapped in a quagmire of develop, develop, develop, raise money, develop, develop, develop, sell, develop, develop, develop, hire, develop, develop, develop, … It’s as if commercialization of their technology was an afterthought – a mandatory, but unwelcome break from the “real work” of building stuff.

It’s easy for a technology-centric organization to find itself at the edge of a very steep cliff by focusing on development instead of cultivating real customers over time. If the most common word in a strategic plan is “develop,” it’s time for a rewrite. Staying in touch with the market by selling continuously will keep a product from being irrelevant by the time it hits the street. And few investors will pony up money to fund a development plan without some very solid hooks into the market.

In spite of this, entrepreneurs often believe that they can buy time and security with legal trappings. It’s not that patents, licenses, and exclusive agreements aren’t important. It’s just that too much focus on protecting innovations can lead to stagnation of ideas and the ultimate demise of business opportunities. And now a word from our sponsor…

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So what’s bothering you? Is it sales, operations, product development, or customer relationships? Whatever you have on your mind, you might be thinking about hiring someone new to come in and save the day. That’s not a bad idea, but you’ve got to get your head on straight before you take the plunge. You’ve probably run the show for a while, and you’ve always figured that you could handle anything that came up in your business. OK, Superman, it turns out that you need help — just like everyone else.

Take a deep breath and get ready to bring in a savior who might be just as smart as you are — and who can make you rich. That pill’s not too hard to swallow. But before you change your business, you may need to change your thinking. Strike a pose somewhere between blissful abdication of responsibility and obsessive micromanagement, and you’ll do just fine with your new friend.

By the way, if you’re trying to increase sales, don’t make the common mistake of bringing in someone just to make some introductions for you. Opening doors is rarely the panacea for sales. In fact, you probably have loads of opportunities already. The hard part is focusing on an opportunity, crossing the threshold, and closing the sale before the door slams shut.

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Don’t Hire a Savior Unless You’re Ready to be Saved

Be Prepared to Walk through Open Doors

People will talk. So what would you like them to say about your company? You can seize the opportunity to hand them a great story, or you can let them make up one for themselves. It’s totally up to you. But if you don’t take some preemptive action, you’re leaving the future of your company up to the business gossips.

Take the first step. Settle on a single story. Don’t dilute your message with a story-of-the-day approach, trying to cater to each new audience you encounter. Make sure that your core story is the same for customers, investors, employees, and partners. Don’t confuse the issue. They’re all connected in one way or another. The strength and stability of your story says a lot about your company strategy. Either you believe in it or you don’t. There’s not much middle ground.

Strip your message down to its core, and structure your story so that it sticks in people’s minds. You know that you’ve done your job well when you hear other people telling your story the way that you would want it told. Of course, that won’t happen unless they can get the attention that you deserve. Your time will come.

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Stick with One Story for Your Business

Leverage Your Story to Propel Your Business Forward

This couldn’t be more obvious. You and your whole organization should be totally sales-driven…period. Now let’s look at the reality of what happens in many businesses. Selling gets pushed down the list of priorities on a regular basis. Why does this happen? Selling, especially the type of strategic selling required to snag the big money, is harder and less deterministic than most other things in business. So in your day-to-day activities, you might find ways to avoid it. You probably have good intentions, but all those other pesky demands on your time tend to slide up your subconscious priority list. Administrative and technical problems are thrust upon you continuously. Selling, on the other hand, requires self-activation. You have to be proactive and brush aside all of your other concerns to focus on it.

Here’s a biggie in the Distraction Hall of Fame: raising money. Constantly searching for investors to prop up your company can be more alluring than generating revenue. And when there’s a lot of capital waiting on the sidelines, it’s easier to get money from investors than from customers. Now that’s addictive. So step up to the plate and build your selling machine, even when investment money is pouring in. Investors won’t necessarily be there the next time you need help.

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Let Strategic Selling Consume Your Time

Covet Revenue over Investment Funding

Why is it that small companies feel the need to behave like big companies? Big sales are good. Big organizations are not. Yet many small companies love to emulate centralized, hierarchical organizations from day one. The truth is that too much structure in a small company can sap its power. Small is beautiful when it comes to innovation, speed, and agility. Once you start compartmentalizing people, handing out titles, and fretting over organizational charts, you’re likely to see your business become more about the trappings of power than growth.

Of course, you may find yourself at the other extreme, in a virtual environment with a highly distributed work environment. So now your biggest challenge is making your virtual company seem real to your team. Don’t make the mistake of assuming that electronic communications alone will get dudes-at-home-in-boxer-shorts devoted to growing the company. You have to make a concerted effort to bring people together, have some fun, and develop the camaraderie that typically gels more easily in a traditional office environment. Above all else, however, make sure that everyone is on a mission to make the business successful. You can do a lot with people who have fires in their bellies, even if they are wearing bunny slippers.

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Use Structure Sparingly in a Small Company

Make Sure Your Virtual Company is Real to Your Team