This article by Coaching Psychology briefly outlines some of the key dispositions toward entrepreneurship. However, things are not always what they appear to be. More to come…
Put your thinking map on — no that’s not a misprint. This article from Anna Vital at Funds and Founders shows you the good, the bad, and the ugly.
In this article by Andrew Griffiths, he asks an important question — are you a victim?
Small businesses are not small large businesses and the academic world is catching on. In this article from Karen May, you’ll see some of the current research behind the idea that small businesses have distinct needs compared to the Fortune 100.
I will be conducting an experiment over the next week with short posts pointing to information you might find valuable. The posts this week will deal with the general area of business psychology which I obviously find vitally important. They will be followed by my own series on the psychology of the business owner. Stay tuned…
“A niche market is the subset of the market on which a specific product is focused. The market niche defines the product features aimed at satisfying specific market needs, as well as the price range, production quality and the demographics that is intended to impact. It is also a small market segment.” Wikipedia
In a general sense, there are two types of markets, commodity and niche. A commodity market represents a single solution to a single problem and is sold to a general audience. A niche represents a solution or solution set to a group of interrelated problems which is sold to a specific audience.
Quick show of hands. Who is in the United States? You just lost the commodity war. In a global economic situation, where we are competing with nations possessing lower labor costs and fewer costs due to regulation, the best economy of scale will falter. If you are going to survive over the next several decades you must firmly establish yourself into a niche market.
Entrepreneur Magazine offers seven steps to defining a niche which are:
- Make a wish list
- Describe the customer’s worldview
- Go for it!
While the article represents a very sound approach, I am a major fan of the idea that complexity is the enemy of execution. Let’s see if we can follow Tim Ferriss’ approach and make this a bit simpler to master. Ferriss takes a simple, four step approach to mastery:
- deconstruct a skill to its essential parts,
- select the most valuable factors to learn,
- choose the optimal sequence, and
- set stakes to motivate you.
For those with some time
The first thing to start with is the heuristic
A successful business can be defined as a self-sustaining organization which is paid to solve problems for other people.
The bolded portion represents the business model. We further refine this to paid to solve a set of problems for a specific subset of people. Let’s follow Tim’s model and deconstruct:
- Specific subset of people. What demographic do you have the greatest affinity for? What demographic do you understand already at a deep level? What demographic do you believe could benefit the most from your efforts?
- Set of problems. What problems does this demographic have which may intersect? Don’t limit yourself at this stage, think in the frame of any problems.
- Solutions. How could you use your skills and deep knowledge of this demographic to solve multiple problems at the same time?
- Which solutions have the highest value to the demographic? This determines the price you can charge and gives you a priority order. Remember, you’re in business to make a living. If you aren’t profitable, it’s called a charity.
We have deconstructed seven steps into four clear steps or questions, representing the first three of Tim’s steps: deconstruct, select, sequence. The final step is “set the stakes”. Any process that is used is better than the perfect one that isn’t used.
Here is my challenge to you today. Complete the four steps. Give yourself no more than two minutes per section. That makes this an eight minute exercise.
Come up with whatever you can in that short period of time and we’ll work with it. Next time, we’ll talk about testing ideas.
Human needs psychology poses the model that every human being has six core needs. Tony Robbins believes that we become addicted to any belief or action which satisfies three or more of these needs at a high level.
Now, there isn’t any distinction here as to whether the “addiction” is positive or negative, empowering or disempowering. You can be addicted to visiting people in a nursing home to support them. You can be addicted to helping your family. You can be addicted to making yourself a better person through learning.
Of course, you can also be addicted to heroin, or self-loathing, or blaming. You can be addicted to finding security through chocolate or finding significance through violence. All addiction means is that your brain is being rewarded by dopamine and that reward mechanism makes it more likely you’ll repeat the action either consciously or unconsciously.
All of these leads to my latest epiphany — that the quality of our lives is determined by the quality of our addictions. We can take control of our addictions and associate disempowering addictions with pain and then add empowering addictions that help make our life better and more fulfilling. The choice is ours. All it requires is that one decision that we are no longer satisfied with not being in charge of our own lives.
Napoleon Hill recorded a commentary on the Three Causes of Failure back in 1953. While listening to the recording, I noticed something of rather interesting value. Hill recounted an event as an example of the cost of procrastination.
Some years ago one of the large automobile manufacturing companies decided to begin an extensive expansion program. The president called in 100 young men from the various departments of the plant and said to them: “Gentlemen. We are going to enlarge our plant and greatly increase our output of automobiles. Which means that we will need executives and department managers far beyond our present staff.”
Hill went on to describe the conditions being offered to these men, which included working four hours a day on their regular duties, four hours of training, there will be homework, and the injunction that this may require additional work beyond the regular work day. He gave them one hour to make up their minds. Twenty-three accepted the offer. The next day, thirty more came into the office saying they had decided to accept the offer, some after talking it over with their wives. The president of the company informed them, however, that the offer had been withdrawn because, as was put
Gentlemen you were given one hour in which to make up your minds after you had all the facts concerning my offer that I could give you.
The point was that these men had lost the opportunity because they had, according the president, demonstrated that they could not make up their minds when they had all the facts. The president, however, was wrong. Dead wrong. And his incorrectness may be an indicator of what was about to happen to the automotive industry over the next few decades.
While it can be argued that the single men had all the facts, those who were married did not possess all of the facts about how the offer would impact their lives. Indeed, it can be assumed that of the fifty who still didn’t approach the president to accept the offer, at least some had consulted with their family and decided that the impact would be too great.
Although this can be dismissed as rising executives knowing what they wanted, it was also a demonstration of selfishness at work. Men rising to executive position who, in all likelihood, did so without any consideration to the impact beyond their career. Remember, it was 1953 when this interview took place. Some years ago had to be at some point after 1945 and was probably right about 1950. The men involved would have been roughly 30 – 35 years old. Twenty years later, these 50 – 55 year old men who had demonstrated that their careers came ahead of any other consideration were running the automotive companies right at the time when Japanese and German car makers were starting to run circles around the Big Three.
Family is arguably far more important than one’s employer and the fact that the rising executives were willing to put career over any possible family considerations was less than encouraging concerning their potential loyalty to their company vs their career.
The moral of the story is simple: if you are an executive, don’t assume that your people have all the information they need to make a decision until you have verified your assumption. And secondly, don’t assume that a rapid decision is good for your company. The only thing that you can be sure of is that a rapid decision is intended to help the person deciding. Or, to the point, don’t assume. You know why.
Today, while re-reading an excellent piece in Inc Magazine, which shows the results of studying every pitch made on Shark Tank, the author exposed the interesting point that there are two questions which can determine if your business idea is going to fail.
I’ve often found that you can predict whether a business is doomed to fail within about 60 seconds by asking two simple questions: What customer problem are you solving? Why are you the person to solve it?
So, in keeping with my mantra, let’s avoid complexity and answer these questions one by one.
What customer problem are you solving?
This exercise is so much easier to do when you have an accountability partner asking it. Someone who won’t let you off with an easy answer. Someone who will pound down, questioning every answer you give, forcing you to dig deep. So my suggestion is to find someone who will do that. Use the precision model to dig even deeper. How specifically do you know that it’s a problem? What specifically is the level of problem? Specifically how does it cause pain? How specifically are they solving the problem now? What specifically causes the problem? What would happen if the problem went away? What would happen if a better solution came up tomorrow? What do you think it would be?
You should be able to write an epistle about this one question. Take fifteen minutes today and answer it. And stop whining; this is your real job as a business owner. Everything else you do is a distraction.