Teaching entrepreneurship isn't impossible.

My son starts his junior year in high school Monday. His first class? “Entrepreneurship”. Given that he’ll have me, our clients, and associates as resources, I expect him to ace the class. Yet perhaps that is an unfortunate expectation, because I’m not sure entrepreneurism can be taught.  

I also taught a college course last year on Small Business Management. I conveyed useful information as required by the curriculum, and included important speakers, videos, and motivational information for added emphasis for important topics. The students seemed to benefit, I’m pretty sure I did a good job, and I’m pretty sure my son’s high school teacher will also. Still, some students in that class will never venture off on their own, some will fail and quit, and still others will succeed. One already has.

But what part of entrepreneurism can be taught, and of that, is it truly entrepreneurism? Or is it simply management? What are the building blocks of entrepreneurship versus the innate personality required to be knocked down seven times and still get up an eighth?

Can you be taught to have a comfort with risk?

No, but you can teach risk management, and offer advice on where others have faltered

Can you teach passion?

No, but you can promote sacrifice and self-reliance.

Can you teach leadership?

Absolutely, but it grows with experience.

Can you teach commitment?

No, but you can inspire and encourage.

The rest, perhaps, is tactics and processes. This is why mentors are so important to the entrepreneur. Mentors are as much about reviewing operational plans and go-to-market strategies as they are about being an example, and a source of inspiration and encouragement.

On the whole, I don’t think you can pluck anyone off the street and make them a confident entrepreneur, ‘Trading Places’ style. But those who have a natural inclination to go against the grain and rise above the noise can learn to be entrepreneurs, even if it can’t be taught. 

The 5 Most Important Marketing Spends for a Start-up

As I work with a number of start-up companies, I am often approached by these hungry entrepreneurs (and their investors) to help execute a demand generation campaign,largely in the 'lean marketing' or 'growth hacking' mode. However, there are a number of prerequisites I demand of prospective clients at early-stage start-ups. These prerequisites are fully marketing activities, but also have cross-functional utility because it helps young companies get a sense for themselves before promoting themselves to the outside.

1. Market and competitive research

Useful to finance, sales, and product development, gaining a full understanding of the industries and individuals (personas) that are in the target market is critical. Young companies should know their customers as well if not better than they know their own product or solution. The same goes for the competition – there is always competition, even where the product, niche, or industry is brand new.

2. Positioning strategy

The world of marketing is ruled by Venn Diagrams. Understand the similarities, differences, Unique Selling Proposition, potential black holes and growth opportunities in your market. Know the desired customer behavior and how slow or rapid adoption would reshape the market and your own assumptions.

3. Go to market planning

Plan the routes to market and go to market strategy for each channel; direct sales, online, partner, etcetera. I am always surprised at the number of companies (even large ones) seeking to promote their solution before they even fully understand how they will sell and fulfill orders. Really.

4. Branding and identity

In spite of the myriad number of self-proclaimed designers and fiverr designs out on the market, leveraging the knowledge and experience of a professional designer is critical to bring the above three investments to the public. A designer that understands your market, what you are trying to achieve, the emotional bond you want to create in a customer, how colors, typefaces, and imagery interact. Great marketing is easily undermined by an identity that doesn’t reflect the marketing message.

5. Inbound/content marketing strategy

Finally, the first stage, 'growth hacking' promotional, demand generation actions begin with the foundations of the content management strategy that drives initial value and interest among your target publics. As content management takes some time to spin up, this should be initiated as early as possible, and ideally prior to product release, in order to drive demand upon release.

Once these five prerequisites are established, then, and only then, should any shorter-term aggressive promotional lead generation activity be undertaken. Excepting perhaps the days of being featured on Oprah’s Favorite Things, there are no shortcuts to effective marketing and sustainable lead generation for a start-up, or for any established company.

Your dream is a sunk cost: Facing reality with your start-up

This article from the New York Times underscores a point I've made to unemployed friends, my college students, even in articles a few years ago for the Dallas Morning News, and I've alluded to it in this blog, here.

Treat your dream to build a business as a sunk cost.

Feel good Successories posters and legions of Twitter career coaches would have you think otherwise. They've no skin in the game. Of course they're going to tell you to 'go for it'. They aren't investing their savings, their time, their energy.

A sunk cost is a cost that is irretrievably lost. Business professors tell us to ignore them when making go-forward decisions. Any entrepreneur, hell, any gambling addict will tell you that it's hard to do. One more sale, one more roll of the dice, and it's all alright again. But it's not real. Your dream is a sunk cost. No getting it back - that is, it's there, it's been imagined, it exists. No turning back on having the idea. The 'one day'. It's a yearning, and therefore a drain on your energy, but not yet your wallet, or your family. Turn your back on it. Because everything that follows is not, not yet anyway, a sunk cost.

Now, hopefully this allows you a bit more objectivity. Every additional moment you put toward this dream is a sunk cost. An opportunity cost. At some point you invest in research and site location reports, engineering drawings or trips to see investors or check out competitors. Sunk costs of time, energy, initial but modest expense. But you still have money in the bank and a steady job.

The dream, the drawings, the unsigned lease agreement, a logo, and business cards. Sunk costs.


Now the question is, IGNORING your sunk costs, ignoring the biggest sunk cost, that is, IGNORING the fact that this design/store/studio/idea is 'your dream', are you ready to move forward?

Really?

Because if you are really ignoring the 'sunk cost' of this emotionally compelling dream of telling your boss to f- off and instead go it alone, then you need to be able to tell yourself this: That you are sufficiently distanced from this dream such that even if this was someone else's dream, you'd still invest this level of energy and money into it.

Because in the end, dreams aren't real. Sunk costs, on the other hand, are real. And bankruptcy, particularly self-inflicted bankruptcy, is a nightmare.

Okay, still? Great. Dream's over. Wake up and get to work.

Fast and cheap and unsuccessful

New entrepreneurs. Committed to a diet of macaroni, peanut butter and cases of Mountain Dew for late night 'ideation' sessions. They tell me they're going to be better... because they're faster and cheaper. 

Copying what has been done before in a way that is faster or cheaper is a formula for long-term failure.

Faster and cheaper is not better. Better is better.  

Instead, the success formula is a disruption - a new way to look at things, a new way to define your market. Faster and cheaper is a natural order of established markets, so start-ups dedicated to this proposition will be overrun. Even if you go 'all-in', spend all the angel's money, live a life of sleep-deprived sacrifice to build the mousetrap, there is no guarantee of success if all you are chasing is a faster or cheaper way to do an old thing. Faster and cheaper are only useful long-term when they are outgrowths of the new and differentiated.

If all your new idea offers is a faster or cheaper way to do an old thing, think again.  

Related articles

• A Personality Test for Entrepreneurs
• Are You An Entrepreneur?
• Start-Up Entrepreneurs: 5 Lessons Learned From The Founders Of Instagram

When your dreams are a crock.

I wasted some time today to complete an estimate for a modest-sized potential client today.

Kind of a waste, because I’m doing it out of obligation for someone for whom I know will not buy it. It didn’t take too long, so I’m not bothered, but I thought it blog-worthy because for the umpteenth time, its another boot-strapped start-up that I know they’ll stick to their dream instead of facing reality.That reality is that dreams require sacrifice.

Experts will tell you that most start-ups fail due to under-capitalization. I suggest that that is a symptom of a greater issue: Common Oprah pabulum encouraging your dreams. I know, what a downer. "No one ever got anything without dream

s!" Whatever.

Nothing wrong with dreams. “Go get ‘em, Tiger!”

But dreams are only useful when you understand the reality. Not only the plan for when the dream is realized, but also the plan for when it fails. As a mentor to entrepreneurs, I’ve sat through plenty of VC presentations. 70% of the presentations never addressed the Plan B. Never have I seen an initial plan lacking a discussion of risks ever make it past the initial presentation.

The idea of having one’s own business, building one’s new widget, being one’s own boss is too great a draw to allow concerns about the costs, (time to market) runway, and the outside help that is needed to see it through impact your decision, because,

“Follow your dreams!” said Thoreau*.

So off they go.

So when the dream becomes work, when the risks become higher, when set-backs become more common than anticipated, the fledgling entrepreneur takes shortcuts.

Extends credit to the unworthy.

Buys services from the cheapest comer.

Plays Three Card Monty with incoming invoices.

And when the reality of the present overwhelms the dream they had in mind, they hold tight to that dream because in spite of the unpreparedness, in spite of the lack of planning, they

“Hold tight to the dream”. Because that’s what the poster in their office says.

But too often in the self-absorption common to mere mortals, we forget that our dreams are not others’ dreams. And dreams, to paraphrase Ayn Rand, are not claims on reality.

So my rates aren’t in your budget. (As if I believe you ever created a budget.) Yes, Billy Bob was cheaper. That’s fine, Billy knows what he’s worth. Or maybe Billy Bob is chasing his dream too, blind to the reality that you, too, are looking for the easy way out. Life is not a Successories poster.

So I’m not going to lower my rates for your dream. I’m not going to extend you credit for your dream. I’m not going to trim off the preliminary steps I think are critical to success with the project.

I have my own dreams.

*Thoreau never said this.

Purpose over Process

One of my favorite quotes about articulating and pursuing goals is from climber and author Todd Skinner: “To stick to the plan instead of the summit can make you fail to climb the mountain.”

In marketing as in mountaineering, being able to separate the purpose of our actions from the process of our actions is imperative for success. As marketing has wisely moved increasingly toward using analytics to quantify its contribution to the organization, often we can get caught up in the analysis over the objective. It isn’t enough to celebrate the sales directly correlated to a promotion, or the movement of a new product’s valuation from an analyst review following a presentation. These are useful metrics and benchmarks, not the overall objective.

Instead it is important to recognize how those results impact broader corporate goals. The clear articulation of easily understood goals is critical not only in gaining support for your actions, but in identifying when those actions deviate from the intended effect so corrective action can be swift.

The objective is a constant, so be careful that you do not use numbers to defend your actions, but rather to define them. You want to clearly articulate and get support toward the shared organizational objective, not the steps in the process.

No one ever asked Sir Edmund Hillary how many steps he took to reach the summit of Everest.

"Plan", as a verb.

"Turn left here."

"But that's a building!"

"You missed your turn. Please make a u-turn as soon as it is safe to do so."

"But I'm in an alleyway!"

So, a couple years ago, I was visiting New York with my family, showing them my old haunts and taking in a game at the old Yankee Stadium. I opted to get a GPS unit from the car rental company because I knew that the roads had changed in the years that had passed since I last drove Long Island's Northern State Parkway.

Unfortunately, when on her very first assignment the lovely voice of the GPS unit directed me to a condo development in Queens instead of a hotel in Lindenhurst, it quickly became evident that things had changed since she'd last been calibrated. It wasn't long before I stopped referring to the chronically incorrect voice in the bright yellow sack as the family-friendly 'lemon lady', and opted instead for the far more colorful 'b*tch in the bag'. After the second day, we stowed the painfully out-of-date navigation unit in the trunk.

Are your business plan documents like that confused guidance system? Is your business planning process useful in navigating toward your goals or is it an annual process that is more routine habit than useful tool? If you are creating it once and then not updating it regularly to respond to changes that occur in the market, then what you created wasn't a tool, but a paperweight. Too often businesses large and small will smartly discuss goals, create a plan, normalize it across functional areas, print it out in color on glossy paper, put it into custom binders, and then put it on the shelf to be updated the next year when it is pulled down, dusted, and updated.

That approach only works for holiday decor.

So, sanity check: We are now halfway through the second calendar quarter, and have you even looked at your annual plan? Have you evaluated the assumptions and how they've played out? Did your competitors introduce new products, services, distribution? Did you or they change pricing strategy, pursue M&A or new partnerships? Is the same team in place? Did you hire someone for their experience and expertise and then quietly encourage them to follow a plan to which they did not contribute, wasting their insight? Did the market change? The environment? Did taxes increase? Were new products and versions and functions and services added precisely on schedule as outlined in the assumptions in the plan?

The plan document is not the objective of the planning process, any more than drawing a map is the purpose of a holiday. Planning documents are useful tools in guiding strategy and providing touch-points - so that even if the signs on the street change, you can still guide the organization to its destination.

Focusing on the map instead of your destination is a sure way to get- and stay - lost.