Category: Mindset

One of the inherent challenges of entrepreneurship is that some initiatives you launch will require time to have an effect.

For example, I spoke with an agency owner last year who was developing leads through LinkedIn. He said that he posted for almost a year before he started to see any business from that channel.

What makes time a challenge is that often the initiative you launch leads to a dead end. There are many marketing channels that the agency owner I talked to could have invested in that would not have had any impact after a year.

And it’s even trickier to navigate because it’s easy to slip into sunk cost fallacy where you assess whether to keep investing in an initiative based upon how much you’ve already put into it.

It’s a gamble. Knowing it’s a gamble is helpful, because gamblers have rules to manage risk. They decide in advance when it’s time to get up from the table and cash in their chips.

For anything significant you’re starting, it’s helpful to set some boundaries. Answer questions like:

• How much will you invest and for how long?
• What signs do you need to see to merit further investment?
• When will you move on? 

Just understanding that you’re stepping into the casino will help you to better navigate the data you collect as your investment resolves.

Many years ago, when I was freelance developer, I became interested in building a product. As I investigated what that would take, I discovered that the success of the product would hinge on my ability to market it. I was a great developer, but I had no marketing experience.

I emailed in this question to, “Startups For the Rest of Us”:

Do I have to learn marketing? Or can I just find an excellent marketer and partner with them to launch a product?

My rationale was that it’s more impactful to be a specialist than to try and master another field. Rob Walling and Mike Taber, both experienced software entrepreneurs, responded that I needed to learn marketing.

Tomorrow, I hop in my car with my wife, my mother-in-law, and two dogs and start a four-day drive down to the tip of Baja, Mexico. Once there, we’ll spend February in a house overlooking the Sea of Cortez.

It will be my second month long working retreat down in Baja. The first trip was in 2022 and one of the activities that emerged from that retreat was this blog.

On that trip, I spent days staring out at the Pacific Ocean and pondering my strengths and how to develop them. I realized that writing develops my thinking and some of my best insights come from exploring ideas with the blinking cursor of a word processor. But to hone that strength, I had to have some sort of vehicle that would prompt me to write and so I began a daily writing practice that continues to this morning. Had I not taken the trip and changed my environment, I wouldn’t have started this blog.

We inhabit what seems like two worlds. Our internal and external experience. But they’re actually connected. Your internal world changes your external world. And your external world changes your internal world.

Changing the scenery is a useful way to turn over the soil in your internal world. To invigorate it with sunshine and air and plant the kernel of the next version of you.

I sat with an entrepreneur friend on a bluff overlooking the Pacific ocean in San Diego a couple of years ago. I was making the multi-day drive back to Portland from Baja and had stopped in to visit him. I asked him an old question that he had answered before:

“Would you rather be an investor or an entrepreneur?”

“Investor,” he answered. It was the same answer he had given me previously.

It surprised me again because he’s someone who’s passionate about business. So I dug deeper, “You’d rather focus on stocks and property rather than developing a business?”

“No,” he said, “I mean that it’s more useful to look at business as investing. If you were putting money into someone else’s business, what would the decision look like? How would you manage the risk? What would you expect back?”

An investor’s viewpoint is from a higher, more objective perspective. It highlights the trade-offs and risks in your decisions and emphasizes the need to generate a return.

The next time you make a significant choice, try putting on an investor’s glasses. How does the choice look then?

How do you invest in the growth of new business and new opportunities?

One approach to this challenge is with an antifragile perspective. Nassim Taleb pioneered the idea of “things that gain from disorder” in his eponymous book. To apply his philosophy on antifragile things, he proposed an investment strategy that he named a “Barbell Strategy.”

To apply a barbell strategy, you invest mostly in low risk investments, around 90%, and for the other 10% you invest in high risk, high upside options.

For your business, that might mean 90% of your attention, energy, and cash is on optimizing what is already proven within the business. Often, most of the “low hanging fruit” is inside your company.

Is it better to aim for incremental progress, to set goals based on where you are today, or is it better to aim for 10x growth?

Strategic Coach and others have popularized the idea of pursuing huge 10x goals, far beyond where you are today.

Thinking big is a powerful mindset to have as an entrepreneur, but it’s not enough. If thinking big was the critical component, there would be far more success in the market. Instead, 10x for most of us is a fantasy.

Incremental goals, on the other hand, are “realistic.” They’re grounded in the actual context of your situation and can be executed on. Progress can be made. However, the consequence of incremental thinking is that your growth becomes dictated by your circumstances.

My sister doesn’t set New Year’s goals. Instead, she sets a theme for her year. The past couple of years, I’ve followed her example and this year I decided to set the theme, “Getting Better.”

Why getting better?

I recently ran a workshop where I presented on goal setting approaches derived from behavioral research by Heidi Grant Halvorson and Carol Dweck. They identified a dichotomy of mindsets when it came to pursuing goals. People tend to think about their goals in terms of “being good” or “getting better”.

One of my weaknesses as an entrepreneur is that I’m not very hip. When I was a freelancer, the smartphone revolution happened, but I didn’t invest in developing that skillset because I don’t like the way people behave with their phones. Social media grew into a huge market too, but similarly, I don’t like the way social media trains people to think.

I’m a minority, a Luddite in a stadium of people scrolling through Instagram.

Most people, most customers, are obsessed with the latest trend. And that’s where the heart of entrepreneurship is: in the new.

My attention is towards what’s not new and never was knew- the underlying principles and forces beneath the cycling trends. I think in terms of the Bible verse, “There is nothing new under the sun.”

It’s a real weakness for this line of work. But it’s also an opportunity, because you need both the energy of change and the understanding of what matters to capitalize on it.

Connecting the past to the future. The fundamentals to the nuances of a specific expression.

As the year draws to a close, this final post is a reflection on how my business and I grew this year.

Revenue Expansion
In 2023, we broke through the revenue ceiling that we’ve hovered around for the past seven or eight years. Along with the revenue expansion, our team grew in its effectiveness and we tightened down our operations to be more efficient.

Referral Marketing Strategy
This year I also focused on developing and iterating on a referral marketing strategy. The impact of that was two good fit leads and one business opportunity. This doesn’t sound particularly impressive for a year’s worth of effort, but it’s inline with my expectations for a word-of-mouth marketing strategy for the kind of market we’re entering into (established, with long-time competitors, and customers more sensitive to risk). In other words, it’s a good outcome.

Some of how this looked in practice:

• I joined four different volunteer groups in two large pools of clients.
• I formed connections with people who were strategically positioned in the market networks (in this case, people who make recommendations on companies to choose).
• I sent out a holiday card and newsletter about our team.

One critical lesson that I learned about referral marketing is that it’s messy in its ROI. The goal was to develop leads and market intelligence and I was successful in that, but what I didn’t count on were the opportunities that came out of building that network:

• I’m talking with a market insider about developing a partnership to launch a software product.
• I’m volunteering in a group that selects speakers for the largest show in the market. I’m a speaker and this is giving me an inside view of how speakers are selected.
• I’ve been asked to join the board of directors for the largest organization serving our market west of the Missippi.

It’s a great start and I anticipate that I’ll see higher and higher returns as time passes.

I used to focus on quarterly goals. There were a couple things about the duration though, that didn’t work:

• My situation would change and make the goal either unachievable or irrelevant.
• Or I’d lose track of what I intended to focus on as the weeks slid by and louder issues took priority.

Monthly goals, on the other hand, felt too short. Objectives weren’t big enough and the frequent planning made them seem almost arbitrary in what to pursue.

I switched to 45 day cycles (1.5 months) and my execution speed accelerated. I still set quarterly goals, but the focus is more on the 45 day cycle as the vehicle to get there and the 45 day objectives are significant enough that they require strategic thinking to be successful.