Yesterday I delivered a lecture to students in the Master Programme in Entrepreneurship at The Lund University School of Economics and Management in Sweden. I spoke about entrepreneurism and marketing as it relates to building an enduring brand. I’d like to address this post to those students and hope that any other budding entrepreneurs out there may benefit from listening in.
1. Be clear on what an entrepreneur is. A friend in New York recently declared herself an entrepreneur based solely on the fact that she doesn’t like working for other people. That is a credential for being human more than an indicator of any entrepreneurial inclinations. Sometimes people use the word “entrepreneur” to describe anyone with visionary business ideas. But I don’t think that’s enough. If you don’t get your idea to market then I’d say you’re an inventor or simply a dreamer. There’s nothing wrong with being either of those things; it’s just not the same as being an entrepreneur. The dictionary says that an entrepreneur is someone who starts and manages a business or other enterprise with considerable initiative and risk. For me, an entrepreneur is also a marketer: Someone who not only has an idea and vision but has the initiative and risk tolerance to get their idea to market.
2. Embrace risk, but understand it. Would you ever consider going over Niagara Falls in a barrel? Probably not. Yet, the odds of surviving the 173 foot (53 M) plummet over Niagara Falls in a barrel is almost four times greater than your company’s chances of surviving its first five years in business (20% survival) and fifteen times greater than either your product surviving past launch (5% survival) or your chances of ever reaching your company’s long-term financial goals (5% survival). The fact is most new businesses fail and the ones that do survive rarely live up to their owners’ financial expectations. This is nothing that should deter you. But I hope it prompts you to heed my next piece of advice.
3. Love your business idea, but do not fall in love with it. Love really is blind, and the blind do not fare well navigating the obstacle course that lies between each entrepreneur and success. Just like relationships between people, the love of a business idea has the power to drive otherwise perfectly rational people to completely irrational behavior. An entrepreneur who is in love with his or her idea can see little else beyond the genius of their creation. And any data that suggests otherwise will be filtered, discredited or otherwise contorted until it fits that view. Be aware of this and find ways to compensate like finding a dispassionate advisor for guidance and periodic reality checks.
4. Focus on the brand, not just the product. Entrepreneurial expert, Evan Carmichael posted the top 12 reasons why new business fail:
I would argue that all but numbers 5, 11 and 12 can be avoided, at least in part, by a properly developed and executed brand strategy. That would mean eliminating 75% of the failure factors in your path according to this list. And note: “Your product sucks,” is not on this list. I’d guess that many good products fail in the market by no fault of their own other than they were brought to market by entrepreneurs who neglected brand basics and fell victim to the pitfalls above.
- No Business Plan
- Under Funded
- Lack of Operating Goals and Objectives
- Failure to Measure Goals and Objectives
- Failure to Pay Attention to Cash Flow
- Failure to Understand the Industry and the Target Customer
- No Means of Differentiation —J ust Another “Me Too” Business
- Poor or No Marketing Programs in Which to Attract New Customers
- Underestimating the Competition
- Not Cost Competitive
- Lack of Attention to Accounts Receivables and Inventory
- Poor People Management Skills
5. Understand what it takes to succeed. If you could draw a mind map of the love-struck entrepreneur you would see that 95% of their belief in success hinges on the brilliance of their idea. They tend to attribute the remaining 5% of their focus to the other factors. I’d say these love-struck pups have it backwards. Brilliant ideas are not rare; brilliant businesses are. I reckon a solid idea will account for about 5% of your success. I’d give business factors like the ability to manage cash flow and people about 15%. I’d give brand factors like the ability to create a solid strategy and then stick to the plan with reality-based measurement a 30% stake. The remaining 50% I’d attribute to you: specifically your vision and your will to bring that vision to fruition.
6. Don’t confuse a head start with reaching your destination. Few things in business beat the feeling of being first to market with a great innovation. But it guarantees little. For instance, you would think that an idea as great as the first car, first television, first washing machine or the first computer would pretty much guarantee an entrepreneurs success. But the now forgotten Duryea, Dumont, Thor, and Mits corporations tell a different story. They found that it takes more than a brilliant idea to endure. We have all seen companies create huge new markets with highly innovative products. High on hubris or too product-focused, these companies don’t create many barriers to entry or otherwise manage their categories. In fact, they can’t see why they need to: The public loves them, the stock market loves them, they love themselves. Until they are driven out of the category they created by other entrepreneurs armed with a brand strategy. Initial success doesn’t mean the chase is over, it just means you have a small head start. Use it wisely.
7. Please don’t call yourself an entrepreneur. Anyone can call themselves an entrepreneur. That’s why so many do. You’ll see it on business cards, LinkedIn profiles, and Twitter bios. But please accept that some monikers, like “hero,” “genius,” or “great dancer” only work when applied by someone other than yourself. “Entrepreneur” is one such appellation. Use a title that actually describes what you do like “Sales Person” or “Marketing Consultant” or “Investor” or even “Aspiring Media Mogul”. Besides, judging from the resumes I’m seeing, I’d say “entrepreneur” is now second only to “guru” as the euphemism of choice for “unemployed”.
Since my talk at the University, I’ve been fortunate enough to interact with several of you and learn about your projects. I found your ideas and vision both inspiring and humbling. This month marks the 20th anniversary of my first international advertising venture and the ten-year anniversary of The Duffy Agency. Yet, as you might guess, I would never call myself an entrepreneur. But who knows? If we both stick with my advice perhaps someday we will be able to refer to each other in that way. Best of luck.
Sean Duffy is a founder of Duffy Agency, the digital marketing agency for aspiring international brands. Sean has over 25 years of experience working with strategic marketing in Boston, San Francisco, Stockholm, and Copenhagen. In addition to his involvement with Duffy Agency, Sean is a frequent speaker on strategic international marketing and online brand management. He serves also as Lecturer and Practitioner in Residence at the Lund University School of Economics & Management and as Mentor in their Masters Program in Entrepreneurship. Sean is an active member of TAAN Worldwide where he has served two terms as the European Governor. He is also a speaker, blogger, Twitterer, and is on LinkedIn. With offices in Malmö and Boston, Sean splits his time between Sweden and the States.