Category: Fundamentals

During my entrepreneurial career, MBA’s have been unpopular with most of the other small business owner-operators I know.

Seth Godin kicked things off with a rant on the problems of business schools back in 2007 and launched his own altMBA a few years later. Josh Kauffman picked the idea up and wrote a book, The Personal MBA (which I rather like).

Tim Ferris penned an essay about using the cost of business school to design his own version of an MBA in, Tools for Titans ($120k focused on angel investing.)

“The MBA’s value is only in the network you develop or the clout of the school,” is a common refrain.

Because of this perspective, I never thought much of business school. “Learning by doing” was where I believed real value to be.

Though I still believe in the value of experiential learning, as time has passed I’ve come to question this common judgment of formal education as frivolous.

Six years ago, I met an entrepreneur in Philadelphia who was running a mid-sized service oriented business. Over dinner, he shared that at one point he was homeless and sleeping on a park bench. He was still “in business,” he was just running his operation from the library.

One of the recommendations he gave me was to write out my vision for the business and my life. He told me that he did it and nearly every fantastic goal he projected, he achieved. His experience with creating a vision isn’t unique; I’ve linked to a couple of other examples at the bottom of this article.

I’m working on a book on growth strategy for service businesses and, as part of that, I’ve been thinking and writing about visions, both for you (primary) and for your business (derivative.)

Good visions create clear pictures of the future that show what, how, and why your world will be different. But what makes them challenging is that we don’t know what we want.

More accurately, we only know some of what we want and often what we desire doesn’t actually serve us.

For example, I get fired up when I watch mixed martial arts. When I was fresh out of the military I thought, “This stuff is amazing, I should do this.” So I did. Within a little over a year I had my first amateur fight. After that fight, I planned on taking another fight at the next local event in three months. But three months turned to six months because I wasn’t training as hard as I needed to. Six turned to nine months as my training tempo dropped further. Eventually, I realized I didn’t actually like the lifestyle of being a fighter.

Watching fights was exciting. Training three hours a day, six days a week was a grind.

Similarly, with visions, we often make three mistakes. We choose goals:

In Brazilian Jiu-Jitsu, you’ll learn most of the moves as a white belt. Everyone gets the same toolbox. But there’s a gulf of effectiveness between how the black belt and the white belt implement those tools.

The difference between the white and the black belt is years of training. The consequence of that training is sophistication. There are functional differences between how the expert and the beginner setup, execute, and follow through on a choke.

For the sake of argument, let’s say that it takes someone five years of consistent and regular practice to become a black belt. If you’re a mixed martial artist balancing your time over five years with BJJ, boxing, and wrestling you’re not going to end up a black belt because you don’t have enough of that sustained focus. You’ll probably have a purple belt’s advanced, but inexpert, understanding of the toolbox.

It’s the same with your business.

The more focused your business is, the more sophisticated it will tend to become over time. The result is increased ability to compete in your domain.

I’m reading a comic book on business strategy. I love it as a format- it’s a lot of fun and a great way to build in marketing. The book is, “StrategyMan vs The AntiStrategy Squad.”

One of the book’s hypothesis is that strategy is based on insight.

It’s an interesting idea and there’s some validity to it, but more accurately, the risk in a strategy is modified by market intelligence. As in: how much accurate information you have about the market.

The more information you have, the more reliable your strategy is. Conversely, the less information you have, the less reliable your strategy becomes.

Imagine you’re playing poker with your friends. You’re sitting around a card table in a garage dense with cigar smoke. As you look around the table, you can actually see through some of the cards in their hands. You gaze at the deck and you can see a card that is coming in a few draws. How does this effect how you play?

On Saturday, I watched a headline fight on the UFC between Dricus Du Plessis and Robert Whittaker. As the fighters walked into the octagon, the commentators discussed each fighter’s strategy in a segment called, “Keys to Victory.” It made me laugh because each of the fighters had keys like, “out strike the other fighter,” and “win the grappling.” Apparently, the keys to victory were to win the fight.

In the same vein, benchmarking your business can show you a version of “keys to victory.” If you compare yourself to similar businesses, you might discover that you don’t get as many customers as they do or that your COGS are higher than the average.

Huh… If only we had more customers we’d make more money. Brilliant!

“Man, it’s weird,” one of my friends told me, “It was there, but I just couldn’t see it.” We were sailing on the Columbia river at sunset, talking about his problems with his ex-girlfriend. After breaking up, he began to see patterns in his behavior that resulted in him being single again. Post breakup, post hurt, post introspection he could clearly see problems that he was blind to when they were a couple.

There are a finite number of objectives in your business that will take you where you want to go. There might be fifteen or fifty things that you need to accomplish to grow to your ideal end state.

These objectives might be things like:

• Set focus or market limits.
• Develop a good CVP.
• Figure out where opportunities are in the market.
• Etc. etc.

The challenge is that we’re blind to most of these objectives. We have ideas about what’s needed, but we don’t actually know.