Failures and breakthroughs – exposed, reflected, considered

Posts Tagged ‘bill gates

Top 10 misconceptions associated with starting your business

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Many aspiring entrepreneurs, without having previously started a business, already have a fixed set of conceptions about embarking on a new venture. The most wide-spread and misconceved of those are:

  1. I need lot of money to start a business (many ways to start-up with no money or with a bit of bootstraping)
  2. I will get rich soon (although some successful startup founders get rich and advise others how to get rich, it will require time till your business gets traction and starts making profit for itself and for you; brace yourself to get rich slowly, in the best of cases)
  3. I need to have a well-conceived and thorough business plan (it is true that business plan is an important fact, but many consultancy and web  service providers started off without one)
  4. I need a unique and great idea to build upon (it is far more important that the idea addresses an open need or delivers in a better, more efficient or more affordable manner that currently available on the market; Betamax vs. VHS story)
  5. I am the boss and I know better (your employees, your customers, your shareholders, and most importantly, your competition will affect and have sawy on your decisions)
  6. It will take lot of time till my business makes profit (while number crunching to project profit is useful, it is by no means sufficient; focus on customer needs and offering value is what will eventually bring profit; some take lot of time and other take a year or two)
  7. I will have more time and freedom (nothing can be further from truth; this is your business and every idea, problem and solution – especially at the beginning stage – will have to go through you, worry you, make you sometimes anxious and other times happy)
  8. I have this nice/cool product/service and will surely get customers/market share (Apple Newton, Motorola Iridium, and many of top dot-coms were built with this idealogy and resulted in failure)
  9. I am the boss and I can pay myself as much as I want (while there is much debate about how much a founder’s salary must be, it is obvious that a founder needs to share love with employees if he expects their loyalty, devotion and passion in work)
  10. I need to take a bold risk in order to succeed (was Bill Gates a risk taker? you rather need to be flexible and adopt to realities, solving problems as you go)

The misconceptions above (and any of their combinations) usher in a bad start, difficult and eventually unsustainable growth of businesses.

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Stories common and uncommon

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Any conversation, casual discussion or even a short encounter might and usually is accompanied by a story. Some stories talk of peaks; some – of lows. All stories have one thing in common: their structure. Stories start by setting a context (location, main “players,” initial conditions), then proceed with developments (events, interactions) and conclude with an endnote. Many stories, like parables, impart not only useful information but also the between-lines, and unconsciously, an inevitable “conclusion.”

Below are two stories, which Ford Harding, the founder and President of Harding & Company, came across during his long and successful career path.

Bob Hillier, an architect who knows how to bring in business, showed how powerful the sadder-but-wiser anecdote can be, when a prospective client said to him, “I’ve had some bad experiences with architects. How can I be sure you’re going to bring this project in on budget.”  Everyone in the room knew that the engagement hung on the answer to this question.  I looked at Bob.  He responded with the following story:

When I had only been in business a short time, I won a project to help renovate a classroom building at a local university.  Our design substantially exceeded the client’s budget, but I thought it was so beautiful that I could talk them into spending the money. When I met with the facilities manager, he looked at my design and immediately asked what it would cost. I told him, and he handed me back my drawings and told me the engagement was over. I said I would redo the work to fit his budget, but he said no, he couldn’t work with someone who didn’t listen to him. I’ve never forgotten that lesson.

With that story, so much more effective than promises or statistics, he won the engagement.

Similar incidents litter professional careers and lives of everyone. Tale-like, informative and full of powerful implications, such events leave an indelible mark on those affected first-hand and make an unforgettable impression on those hearing their account.

Here is a story that I heard an attorney tell to an accountant he was hoping to get referrals from:

When I was a young lawyer, I was trying a case in front of the judge with a reputation for being hard-nosed. I found myself getting so wrapped up in my client’s case at one point that I stopped and apologized. The judge got mad at me right there in front of my client. “How dare you apologize,” he said. “If you don’t feel emotional about your client’s case, why should I?”  Ever since then, I have never felt embarrassed about being emotionally committed to my clients’ cases.

This story is far more persuasive than a statement like, “I will really fight for any client you refer to me.”

These two anecdotes were illustrative of two people who had learnt from their previous mistakes the hard way.  Stories are also a cure when facing awkward/frustrating but critical moments. There are many such stories associated to rainmakers. There is something visceral in our fascination with stories, especially when we feel relating to or identifying with them.

Stories can be inspirational and funny. In the business world, for example, Bill Gates is notorious for his association to a plethora of stories – some true, some exaggerated and some utmost lies. Here is one at the same time informative and entertaining.

“Bill Gates and the president of General Motors have met for lunch, and Bill is going on and on about computer technology. ‘If automotive technology had kept pace with computer technology over the past few decades, you would now be driving a V-32 instead of a V-8, and it would have a top speed of 10,000 miles per hour,’ says Gates.

“‘Or, you could have an economy car that weighs 30 pounds and gets a thousand miles to a gallon of gas. In either case, the sticker price of a new car would be less than $50. Why haven’t you guys kept up?’

“The president of GM smiles and says, ‘Because the federal government won’t let us build cars that crash four times a day!'”

Many other business anecdotes can be found here, here and here.

For all of those in the business world, remember that many stories, especially those with bad ending, are caused, ironically, by what Ambrose Bierce once defined in his Devil’s Dictionary.

Corporation: An ingenious device for obtaining profit without individual responsibility.

Happy storytelling.