Had a superb idea for a new on-line business venture (start-up) called Unfinished Projects. I’m going to be approaching some potential partners with the idea later this week.
At this point I am merely creating the design sketches and outline for the business, but in a relatively short period of time I could easily develop both business and operating plans.
Peter S. Cohan
December 17, 2014
This week I gave a final exam to 29 undergraduates in my “Foundations of Entrepreneurial Management” class at Babson College.
But a final exam is not the true test of what they need to know. They need to learn how to think and act to find and capture opportunities to make the world a better place.
This may sound overly rosy, but in my experience startups must make the world better in order to survive. To succeed at that, entrepreneurs must consider and do the following six things:
1. Find customers and feel their pain.
A passionate founder is often so determined to realize a vision that he or she can lose sight of other perspectives. Before going too far with plans, an entrepreneur should think about how the outside world would view the new product.
What are the different groups of people it could help or hurt? Which group of potential customers might it make better off?
Which talented people could the vision inspire? Which partners would want to work with the venture? Which investors would want to bet on it?
In a recent interview, Nutanix CEO Dheeraj Pandey tells me that empathy is the one word he invokes in almost all interactions with customers, employees and partners of his San Jose, Calif.-based company that combines the functions of servers, storage and networking.
“By empathizing with our employees, customers and partners we believe we can build a company that will create value for our investors because we solve their problems instead of dictating to them what we think they ought to have the way our competitors do,” he says.
2. Imagine and build a prototype.
Find an inexpensive way to build a model of a product.
Let’s say an entrepreneur has the idea to build an app that will make it easier for college friends to arrange an evening out on the town. A prototype might be as simple as a series of drawings of the app’s screens. If the drawings are clear, save the time and money of hiring someone to write code until after the next step in the process.
An example of this can be found in Ben Kaplan’s development of the Who is Going Out (or WiGo) app. As the former student at Holy Cross College in Worcester, Mass., tells me, “I was on campus my freshman year and trying to make social plans — figure out who else was going out at night, where and what time.”
But there were no easy way to do it, he says. “You could text other people or put a post on Facebook but you often wouldn’t get an answer.”
So he came up with the idea for WiGo and mocked up some screen shots on paper for how the mobile app would work. He found a systems developer who built the app in the fall of 2013 for his new company.
3. Receive feedback to adapt the product.
Next imagine the characteristics of the individuals who might eventually buy the startup’s product. Based on that, find individuals who fit that description. Show them the prototype and inquire whether they would buy it. If so, how much would they pay? If not, ask them to say what’s wrong with it or missing and what they would they change.
Repeat this process until a majority of potential customers say they are eager to use the product and want to know how long it will be until it’s delivered.
WiGo is an example of a product that launched in January got good feedback almost from the start, founder Ben Kaplan asserts, saying, “It became very popular within three weeks. Many of the people using it were friends on sports teams at Holy Cross.” Adds Kapan, “I started getting emails and Facebook messages from people at other schools like University of Florida and University of Southern California where I had friends who wanted to use it.”
If consumers say the product looks interesting but it’s not good enough or solves the wrong problem, change the vision or find customers who need the product now — or give up.
4. Build a team of people.
After receiving a positive reaction from from potential customers, think about the skills required to turn a prototype into a product with the benefits expected by customers. What type of sales, engineering, operations and service people are needed to operate the business well?
Figure out values to unite the team and use them to screen candidates and create an interview process and compensation package to hire the best people for these key jobs.
Kaplan, a visionary and salesperson, lacks programming skills. But he was able to use his skills to secure the ones he lacked. For example, he met with Jim Giza, executive in residence at Worcester Polytechnic Institute.
Giza introduced Kaplan to Kayak co-founder Paul English, who was opening the Blade startup incubator in Boston. “I gave him a demo of WiGo and he immediately got it,” Kaplan says, adding that he now has three or four employees and three to four Blade employees dedicated to WiGo.
English also led to Kaplan’s enlisting programmer and MIT grad Giuliano Giacaglia to be a WiGo co-founder.
5. Raise capital to achieve goals.
To accomplish all the preceding steps, a startup needs money. Give thought to the ways the startup capital could be used and how potential investors will receive a return on the investment. Then find people who will understand the venture and have the capital to invest in it.
The process of raising funds becomes more time-consuming and difficult as capital requirements increase. Bring in investors who will help the company achieve its vision rather than fighting to take control.
WiGo raised capital by bringing in investors who understood its market and could help attract others. The company brought in “about $700,000 from the founders of Kayak, Rue La La, and Tinder, and from professional athletes, including Vince Wilfork of the New England Patriots,” The Boston Globe reported.
6. Perceive and adapt to change.
Monitor all the changes to the startup’s environment. The entrepreneur must distinguish between signal and noise when it comes to considering new technologies, customer needs and upstart competitors.
The founder must decide how to respond — whether to alter the existing product line, add new items, change the organization’s structure, bring in managers or create more formal systems to manage people and finances.
Adobe Systems is an example of a company that has adapted to change. Since 2011, its CEO has led its transition from selling packaged software (to its 12.8 million users of Photoshop, Illustrator and InDesign) to providing software as a service, whereby customers pay a monthly fee and get the latest version from the cloud.
Adobe decided to sell Creative Cloud, a monthly, cloud-based subscription service. On Dec. 11, Adobe reported far more subscribers to its Creative Cloud than Wall Street expected and its shares gained nearly 10 percent on a day when the Dow plummeted.
Thinking and acting in these six ways can make the difference between startup success and failure.
In every industry, competition and collaboration have increased and it has become more important than ever for people to be at the top of their game. YES, every day we are all obsessed by productivity. What are the Tools, Tips and Tricks?
- The hardest part of staying productive is keeping yourself focused.
Focus on one task at a time and avoid thinking about other tasks. As your mind craves routine, make productivity a habit by planning your major tasks each day. Make time to disconnect from all technology, notifications and email to minimize distractions.
- Keep your brain in shape.
You all know that a daily workout is a great way to keep your body and your mind in shape. Finding time for a morning run or exercise can help prevent the mid-afternoon productivity slump.
- Question every activity/distraction that you encounter during the day.
Ask yourself if you really need to do this activity and look for something else more important that you should be doing instead of this activity.
- Have a deep interest in what you do and enjoy it.
Chasing productivity is always a big challenge when you are always trying to find a better way to do things. So you have to have a deep interest in what you do and enjoy it, even when the schedule is crazy and demands a lot of productivity.
- Figure out what your hourly rate is and compare everything you’re doing to that.
What helps you set your goals is having a clear understanding of what your priorities are and if you have a boss, understanding what theirs are and how yours align.
- Eliminate wasteful activity from your day.
Maximize your Return on Time invested (ROT) in everything you do and if something isn’t yielding a high ROT, then simply stop doing it or pass it off to someone else.
- Finally you can always do more than you think you can do.
There’s only so much time in the day so getting things done is about quality and quantity. If you don’t have a routine, then create one. Wake up and get busy getting things done.
Productivity can be a very personal thing, so I encourage you to share your own tips with me.
Thanks for reading!
Sleep Better Now!
Indeed. And I completely agree.
Learning disabilities like dyslexia aren’t typically regarded as advantages, but for some entrepreneurs, being dyslexic has been a key part of why they succeeded.
That’s according to New Yorker writer and bestselling author Malcolm Gladwell, who, while researching his last book, David and Goliath, spoke to roughly two dozen dyslexic entrepreneurs.
“Their stories are all the same,” Gladwell says. “They don’t think they succeeded in spite of their disability. They think they succeeded because of it.”
While learning disabilities present unique challenges for individuals from an early age, they can also serve as what Gladwell refers to as “desirable difficulties,” or challenges that force people to learn new skills that prove extremely helpful later in life.
“They’re learning delegation, how to communicate with other people [and] motivate other people,” Gladwell says.
Successful dyslexic entrepreneurs that Gladwell points to include Virgin Group founder Richard Branson, JetBlue founder David Neeleman, and longtime movie producer Brian Grazer, whose dyslexia forced him to learn how to negotiate his way to getting better grades in school, according to Gladwell.
“By the time he hits college he’s brilliant at it, and then what does he do? He becomes a Hollywood producer, [which is] about negotiation, among other things, and he’s been practicing his entire life,” Gladwell says.
“In order to learn the things that really need to be learned we require a certain level of adversity.”
To hear more from the conversation, watch the video below.
Why Obstacles Can Improve Results
Certain obstacles that seem undesirable at first may ultimately help you get ahead.
In 1980, Ron Shaich was just a 20-something kid looking for a way to draw customers into his single cookie store in downtown Boston.
Today, he is the founder and CEO of Panera Bread Co., which has nearly 2,000 locations in the US and Canada, 80,000 employees, and a market capitalization of $4.5 billion.
Through a series of ah-ha moments and happy accidents, Shaich took a simple idea — sandwiches, soups, and salads that people feel good about eating — and built it into a dominant American brand.
It wasn’t always easy. The company started as Au Bon Pain, and Panera was just one of its divisions. In 1998, Shaich made the difficult decision to sell off most of the business and bet on the little-sister brand Panera. He also stepped back from his role as CEO four years ago. The time away made him realize all the ways the company was vulnerable, and he wrote a 20-page memo about how he would destroy Panera if he was a competitor.
Shaich sat down with Business Insider to talk about how he got here, the single most important strategy in Panera’s success, and what’s next for the business.
This interview has been condensed and edited for clarity.
Business Insider: When did you first want to be an entrepreneur?
Ron Shaich: In college, I was the treasurer of the student body and came up with the idea of launching our own nonprofit convenience store. We ended up building it, and for a kid who couldn’t dance or sing, I found the creation of this store the most creative thing I ever did in my entire life. I loved it. I began to realize that business was creative and a way to make a difference in the world.
BI: How did Panera get its start?
RS: I went to business school. I tried to figure out my life. I ended up in D.C., running a chain of cookie stores for a large company. I established that this is the food I want to eat and created a single cookie store in downtown Boston in 1980. By late ’80, I had 50,000 people a day coming in, but no one bought cookies before noon. So I decided to put in French baked goods, and I became a licensee of a classic French bakery called Au Bon Pain.
They were the most screwed up vendor I ever dealt with — sometimes they delivered, sometimes they didn’t. I went to them with a proposal to merge the businesses. In February of ’81, I took on their debt, their three stores, and my one. And, after a number of iterations, that became Panera today.
BI: What was the moment when everything clicked for Panera?
RS: In 1984 I had an epiphany. I’d been working in the bakery, and people would walk in and say, “I want that baguette. Slice it from top to bottom.” So I do and hand them the loaf, and they pulled out a bag of deli meat and some cheese and made a sandwich out of it. You didn’t have to be a marketing whiz to recognize it was an opportunity in sandwiches.
We said, “Let’s be the platform to sell soup, salad, and sandwiches.” It took off from Day 1. In 1991, we took it public, and by 1996, we had evolved to a thesis that I call “decomodification,” today called “fast casual.” Then, the contemporary paradigm of fast food was a lot of food for not a lot of money. We recognized that there was a large niche, say 30% to 40% of the market, that wanted something more special. It was not simply how much food they got for the money, but the quality of the food and how they felt about themselves eating there.
Then I had another epiphany. I was sitting on the beach in 1999 and thought, “Wow, for every 100 guys who talk about having a dominant brand, one makes it. Maybe one out of 1,000.” It’s so hard. Panera was one of four divisions. Somebody said to me: “What would you do if Panera owned Au Bon Pain and not the other way around?” I said, “This thing is a gem. If I had any guts, I’d take myself and the very best people we had, and I’d let it fulfill its destiny.” So I did it.
BI: Just like that? How did it feel to say goodbye to most of what you’d built?
RS: The next few years of selling everything else off but Panera were the most horrible years of my life. Au Bon Pain was my first child. It’s only in retrospect that these decisions feel OK. When you’re going through them, if you’re honest, they’re horrible and difficult. Bottom line, I did it. We made the bet on Panera.
BI: If you could pinpoint one strategy, what do you think made Panera so successful?
RS: What sustains a company over the long term is how it thinks, not what it does. Because what is does is a byproduct of how it thinks. Panera in its core comes from a view that competitive advantage is everything. If we don’t have a reason for people to walk past competitors and come to Panera, then we don’t exist. Losing competitive advantage is the greatest risk in business, and that’s where our focus is.
BI: How do you stay ahead of the curve?
RS: I view my role as CEO as protecting those that discover ways to build competitive advantage. Often, when businesses first start up, they’re driven by people who discover new ways of doing things. They’re able to best the competition because they’re clearly disruptive and better. Then they get larger, and behind Discovery People come Delivery People, and they speak a different language.
Discovery is the language of what could be, of where the world is going. Delivery is the language of what happened yesterday, of limited risk. And in most companies that scale, you eventually wake up and realize you have tremendous delivery muscle and no discovery muscle, no ability to regenerate competitive advantage.
Our job as leadership is to protect and enable leaps of faith, making sure the company is there when the future arrives.
BI: After being CEO for decades, you stepped down from the role about four years ago. Why did you come back?
RS: I didn’t step down; I stepped back. I became executive chairman. Instead of six days a week, I spent three days a week on Panera.
My mind started racing one weekend, and I sat down at the typewriter and wrote a 20-page memo about how I would compete with Panera if I weren’t Panera. I undertook this vision and, after a year, found myself working 60 to 70 hours per week on it!
Panera has 80,000 employees and serves 10 million people a week. I’m back as CEO because I ultimately concluded it’s the most powerful platform I have to make a difference in the world.
BI: A lot of leaders talk about the need to carve out time to think about the big picture. How do you do it?
RS: I go to the beach every Christmas, and every year I write down initiatives for myself, my family, my health, my work, and my God — all the things that I think matter. I write where I’m trying to get to and how I’m going to get there.
BI: What’s an example of one?
RS: In my 50s, having never really exercised, I realized if I don’t do it now, I never will. I committed to it and hired a trainer to help me. I’ve been at it for over eight years, and I’m in better shape today than I was 20 years ago.
BI: Is that how you approach business strategy? You have annual think sessions?
RS: That’s exactly how it works! We sit down every year and try to figure out where we want to be in five years. How do we stay competitive? What do we have to do to ensure we feed the growth monster that goes with being a public company? And then we literally draft on paper what we want to achieve in the next 12 months.
Good strategy is continually changing. Strategy begins with where we think the world is going. Innovation begins with understanding what job you’re trying to complete for whom, and then determining what matters to that audience, looking for patterns, and trying to understand it. That’s hard work; that’s in the details.
BI: Tell me about the Panera 2.0 initiative.
RS: We’ve been working on it for four years. It brings together a range of technologies, and it’s meant to change the guest experience. If you’re coming to eat in, you simply walk in, sit down at a table, and use your phone to place an order. That order goes up into the cloud and comes back down to our kitchen, goes to our production systems, and the food is delivered directly to you.
Alternatively, if you want the order to go, you can place it from your office, from a kiosk in the café — anywhere you like — you just walk in and that food is waiting for you at a designated time. We’ve made this major commitment to technology.
BI: Panera was among the first retailers to integrate Apple Pay into stores. Why did you decide this was something you wanted to be a part of?
RS: Anything that offers convenience to our guests would only be good. We already have a very significant digital presence, and we’re moving aggressively in that direction.
BI: Is this something your customers have shown an interest in?
Justin Sullivan/Getty Images
RS: What customers want are things that add joy and value to their lives. They don’t want another app; they don’t want more technology. What they want are things that make their lives easier.
Apple Pay offers the potential to be significantly easier for those carrying their iPhone 6s. All you have to do is tap it and you’ve paid. It also offers a very high level of security, since there is no transfer of the credit card number. On both of those fronts, it offers the potential for ease and joy and a reduction of friction, and those are positives for the guests.
BI: What advice would you give to others who want to follow in your footsteps?
RS: If you can do something to get somebody excited — not everybody — but if you can be the best for somebody, then you can win. What it’s all about is figuring out what you can do for somebody that nobody else can do better.
An excellent business lecture on Entrepreneurship, Start-Ups, Financing, Marketing, and general principles of Innovation.
I recommend it.
Branson recounts excellent advice and experience on adventure, leadership, risk, and entrepreneurship…
Sept. 19, 2014 3:52 p.m. ET
I’m still clinging to my trusty BlackBerry Curve, because of the keyboard. There aren’t many of us left. I use it for sending emails but also have an iPhone for posting Instagram pictures and browsing Twitter. The freedom that these machines give you is fantastic. I love going to Africa and watching game, but I can still be in touch…