Category: Fundamentals

I recently saw an ad trying to drum up workers for Amazon warehouses. The headline on the ad said, “Work close to home.” I thought to myself, “There is an advertising agency laboring to polish a turd.” The ad’s reasoning was that the primary benefit that Amazon can offer workers is that it might be in their neighborhood. The subtext is, “Work like a dog, for peanuts, in a job with no future, but the commute is short.”

A common story around growth is that you just need marketing to get the word out. While not entirely false, it’s not true either.

Marketing cannot create demand. It can only amplify it.

I write a lot about applying strengths. Our unique capabilities give us advantages over competitors. But nature has a way of balancing the scales. Often what makes us exceptional is also what makes us vulnerable.

As a simple example, when you position a business you develop a unique capability in getting customers from a certain market. But it comes with an accompanying cost of losing customers in other markets.

Strengths walk hand-in-hand with weaknesses.

The trick is to manage the context so that strengths are effective and weaknesses don’t matter.

“Lots of people have grey hairs they don’t want and this service would enable them to get touch ups the same time as their haircut,” a teenage girl told me. I’ve plenty of grey hairs and I wanted to crack a joke, but just nodded. The girl was dressed in a business jacket and a conservative skirt and we sat across a table in a wide ballroom at a Holiday Inn. As a judge, I’d been instructed to offer little feedback or questions other than the two that were given to me. The teenager was one of twenty that I judged yesterday as part of the state competition for DECA.

DECA is a vocational training organization that prepares high school students to work in business. It’s a co-curricular class where students learn business concepts as part of school and then compete at events like the one I was a judge at. “It’s really a cult,” a mother helping at the conference told me, “The kids get really into it.” I was there because I care about education and business and the opportunity presented itself through the local Rotary.

I judged entrepreneurship. The teens were given business cases where they had to argue a proposal to me, their business partner. One of the cases was expanding a product or service line for a mobile hair cutting business. Hence, the dye for my unsightly grey hairs. In addition to dye as a service line extension, students proposed make-up, pedicures, manicures, wardrobe consulting, and even facial massages.

“Jimmy’s son figured out that the dairies wanted their pens cleaned and the farmers wanted compost. He offered the dairies to clean the pens for free and sold the manure as fertilizer to the farmers. Now, he’s making a killing. He has a free resource and he’s turning it into dollars.”

My parents visited this weekend and my dad told me this story about a friend’s son.

I told my dad, “That’s sort of a classic story of entrepreneurship. But I would bet that, on some time horizon, the dairies are going to run out of expansion opportunities where there are no good locations to build up or down the road. They’re going to look for other ways to grow and end up telling Jimmy’s son, ‘Thanks for figuring out that for us, we’ll take this from here.'”

In the Lean Startup, Eric Ries applies the methods of lean manufacturing to software startups. One of his core concepts is a cycle of progress where you build, measure, and learn. The cycle is important because you build on past lessons with every iteration.

As it pertains to growth, the same cyclical model can be broadly applied. Nature, agricultural, human growth, education, etc. run on cycles with seasonality. As an example, if you cut down a tree you see the annual cycles written in rings across its trunk with each year showing successive growth.

One of Ries’s contributions with his cycle of build, measure, and learn was to propose that by intentionally changing the scope, you could change the speed with which the cycle occurred. Smaller scopes could be processed quicker. This had the effect of acquiring intelligence about what works quicker which leads to faster growth.

I hired an account manager, a PPC agency, and a junior developer this year. All three were part of an effort to scale up and serve more customers. At the end of the year, all three are gone and the work to scale had a negligible impact.

In retrospect, I don’t think these were dumb decisions. I had completed a lot of work to figure out whether these were viable investments and how to find good people. At the same time though, I failed in several respects. While not dumb, I didn’t do a good enough job managing the risk and I didn’t stay focused enough on ensuring they’d be successful.

Sometimes, I look ahead and wonder what I’ll think about business in ten years?

Learning has a way of expanding your horizons and revealing options. Things that seemed simple as a neophyte become nuanced and complex.

However, mastery can have the opposite effect. Things become simple again. Lessons are embodied and all the complexities are reduced to streamlined principles and rules.

In 2018, I set at a table with other entrepreneurs in my 10,000 Small Businesses group at a campus outside Boston and studied course work around all the subjects that compose business: marketing, hiring, finances, operations, etc. The goal of the program was for the entrepreneur to develop a plan to purse a growth opportunity.

One of the instructors introduced a brainstorming framework called Earth Sky Space. You draw two horizontal lines on a piece of paper to create three zones. The bottom zone is earth, the middle is sky, and the top is space.