Andrew Mackie, business catalyst

Complexity, friend and foe

In business startup, complexity is your friend. The harder it is to start your business, the less likely a competitor can follow in your footsteps. Embrace and welcome it, provided that you have the competency, resources and support to push through it.

Once your business is up and running, complexity is your foe. A complex business model, website or sales process will confuse, dissuade or frustrate potential customers and limit your plans to change the world. Destroy it. To this end I recommend a great speech by Bill Gates on never surrendering to complexity, courtesy of Presentation Zen.

Secrets of success: The 4 minute version

Richard St. John gave a compelling, four minute version of his ‘Secrets of success’ course at TED in 2005:

Richard's eight points, found by surveying 500 successful people are:

• Passion (be driven by passion, for love not money - the money follows),
• Work (it's all hard work but successful people have fun),
• Good (become very good at what you do),
• Focus (focus on one thing),
• Push (push yourself, push through self-doubt),
• Serve (serve others, provide others with value),
• Ideas (listen, observe, be curious, ask questions, problem solve, make connections), and
• Persist (through failure, through CRAP)

Of course, one needs to beware of survivor bias - the human tendency to focus on successful people and ignore the unsuccessful. This may mean that many people follow the advice or path of the successful but fail, unnoticed by observers, preventing us from accurately assessing the risks inherent in following in the footsteps of the successful.

One thing I do know, however, is that no one became successful by being ignorant of advice, risk averse or lazy. Which brings me to the eloquent wisdom of Ted Roosevelt:

"Far better it is to dare mighty things, to win glorious triumphs, even though checkered by failure, than to rank with those poor spirits who neither enjoy much nor suffer much, because they live in that grey twilight that knows neither victory nor defeat."

I couldn't agree more.

Know where the work is

My car importing business is about a fun, high performance driving experience. The work, however, is in getting through compliance red tape and providing information to the thousands of people who contact us in the meantime.

Running a café is about a great place for friends and family to meet. The work is in early starts, late finishes and non-stop hard slog in between.

Running a telco is about people communicating with each other. The work is in billing correctly and handling a large number of customer interactions efficiently & cost-effectively.

The nature of the work effort in a business is typically different to and less glamorous than the purpose of a business would suggest. Make sure you know in advance where the work is - otherwise you may have significant skill gaps, inadequate systems and a business that you don't actually want to run.

Book Review: The new business road test

Who is it for?
The new business road test is a must-read for anyone wanting to start a new business, now or in the future, and should be read before writing a business plan. Reading the book will help you identify which of your business ideas are likely to be viable and which should be thrown in the bin.

Who wrote it?
John W. Mullins, Associate Professor of Management Practice in Entrepreneurship at the London Business School.

The core idea
John W. Mullins contends that there are seven domains that a business must be tested against and pass in order to be successful:

- Will the fish bite?
- Is this a good market?
- Is this a good industry? (Porter’s forces)
- How long will your advantage last? (Building a sustainable advantage)
- What drives your entrepreneurial dream? (What are your personal goals?)
- Can you and your team execute?
- Your connections matter – which matter most?

Why I liked it
This book gave me clarity in an area where entrepreneurs are typically weak – in performing their due diligence. It has allowed me to systematically look at each business idea and evaluate it objectively, without much overhead.

I think it’s compelling enough to make this bold statement, an echo of a statement in the book, that if more entrepreneurs read this book or resources like it we’d have stronger economies. Entrepreneurs are both a scarce resource and the engine for our economic growth and far too often they waste their time, investment opportunities and considerable talent on projects that have no chance of succeeding.

Balance it with:
The Art of the Start by Guy Kawasaki, which covers starting a venture from a holistic, passion-centric position.

Blue Ocean Strategy, which (in spite of being IMHO a very dry book) helps entrepreneurs see beyond fighting in competitive markets (a red ocean strategy) to find new markets where you have no competition (a blue ocean strategy).