As a 21-year-old college student at Wharton, a business school at the University of Pennsylvania, I enthusiastically embraced the ideals of entrepreneurship and started my own company. My classmates and I managed the company for two and a half years, and this became our full job after graduation. We have written a business plan and believe that we have a unique concept, a strong management team and a viable “business model”.
Unfortunately, despite some initial successes, my business eventually closed. Our fate is not surprising when you consider the problems faced by entrepreneurs starting new companies. Like many entrepreneurs, we lost a lot of money invested by friends and family. For two years we lived in our offices, slept on the floor, worked day and night without privacy. In the end, it seemed that these sacrifices were negligible.
Lessons learned
I think that the failure of my company can be explained by the lack of leadership among its founders. After years of thinking, I asked myself to define what it means to be a “leader” for me. My definition:
A leader is someone with sound judgment, honesty, and a sense of responsibility for others. A leader motivates others to achieve common goals, gives hope and inspiration in times of uncertainty, and helps organizations adapt to ever-changing environments.
Although a certain degree of technical competence is needed, these attributes are mainly associated with an increase in self-awareness. It was Sun Tzu who said: "Know your enemy and yourself, and you will win 100 battles, know the enemy, not yourself, and you will lose every time." Unfortunately, as an entrepreneur for the first time, I did not know much about myself. Although the lack of self-knowledge is not so unusual for someone in the early twenties, it is a huge problem for an entrepreneur.
I have always found that a good abbreviation helps me remember things. For example, “ROYGBIV” and “Please Excuse My Dear Aunt Sally” have blocked rainbow colors and mathematical routines in my brain since I was a high school student. When I wrote this manuscript, I wanted to create another mnemonic to help me remember the mistakes I made, so I do not repeat them in the future.
I classified these business mistakes into five elements (“E CODE”). These five areas are as follows:
E gomania
FROM or management
ABOUT (or Attitude)
D Value
E mptiness
1. Egomania
As a college student, I heard stories about how Michael Dell started his company from his dorm room at the college, and how Bill Gates knocked out of Harvard to start Microsoft, and how many of the rich benefactors of my university were entrepreneurs. While I could not know about the difficulties and the brushes with the failure these people had, I was hooked on their larger images of the life of “success”. In the end, I wanted to believe that I could achieve something with my future. I wanted to believe in the unlimited potential of entrepreneurship.
In my mind, these stories were all that came close to meeting the “extraordinary expectations” that I had from life. I was convinced that entrepreneurship is the greatest opportunity to create wealth. At the age of 21, I wanted to make my own decisions, become my own boss and get a financial stake in the results of my work. At the same time, I did not want to spend 10 or 20 years, slowly climbing the corporate ladder. Having started my business, quickly growing and selling it, I thought that I could drink a cake and eat it.
It was Bill Walsh, the former head coach of the San Francisco 49ers, who noted that “ego” is an abused word in the United States. He said: “We Americans throw it, using this one word, to cover a wide range of meanings: self-confidence, self-confidence and self-confidence ... But there is another side that can destroy a team ... This distracted by your own value ... [It] ultimately interferes with the real purpose of any group. "
As a young entrepreneur, I considered it my right to serve my own interests. Since I was “risking”, I believed that I had the right to rewards. Therefore, I was very confident in whom I allowed to participate in my business. Even if recruiting a larger team added benefits, I sometimes hesitated. In the end, I viewed it as “my company”, so I did not want to share with other people, but it was absolutely necessary. If I checked my ego, I would be more likely to recognize my limitations and focus on building the right team of people, even if it meant slowing down.
Unfortunately, my exorbitant expectations regarding entrepreneurship were hard to meet. Soon, I was embarrassed to show people I worked in a small office, only with competent employees. I wanted to justify my high ideal of the “real entrepreneur”. So, I rushed to rent large office space and expand my business prematurely. When the image that I had in my head was not true, I panicked. What for? Because I was much more excited to pursue the tale of “rags to wealth” than I had to look after and slowly build a business over a long period of time. I wanted the results to hurry, but it didn’t work. The time has come when Peter Pan will grow up.
After all, the entrepreneur is responsible for managing his company and its many interested parties, not just himself. There is no place for big egos because they lead to bad decisions. Entrepreneurship is not so different from other career paths, as many of us would like to believe. It still takes many years to build a reputation and strong customer base. He still requires the founder to start at the bottom. In any case, it is less glamorous, because there are fewer people at our disposal who can help and much less resources.
2. Corporate governance
My partners and I had little corporate governance, and not on written policies or procedures. Often we lacked the independent perspective necessary to critically evaluate our thinking. GroupThink was rampant, and everyone was fascinated by the same views, so no one thought for themselves.
Although we did not think that we needed advice, my company would benefit from the inclusion of independent directors on our Board. This will force us to share our services with external professionals. Inevitably, we would have to test our theories, identify potential risks, and slow down our growth plans. At the very least, independent directors would force a system of checks and balances.
Although no entrepreneur wants to create a bureaucracy, having a certain structure is important for a healthy organization. Unfortunately, my partners and I thought that the main value of having independent directors was to use their business contacts. We were not concerned about corporate governance. Instead, we wanted directors to help us get financing or start a new business. When it became difficult for us to recruit these “well connected” people, we stopped looking.
As founders, we could not afford to pay high salaries, so we were financially dependent on the value of our shares. While our holdings were almost useless at the time, we assured ourselves that “justice” was the best motivational tool. Unfortunately, the extremely dependent on the value of our shares has made us more inclined to adopt more risky strategies. In the end, our stock can never cost less than zero. In this sense, it was reminiscent of a “call option”, so adding volatility to our business was a way to increase our stock value.
Ultimately, I was so concerned about protecting my property that I turned away from venture capital. Instead of selling a large chunk of my capital, I preferred to adopt a strategy with a high leverage. Now I understand that anyone can bet on his entire company on a risky financing strategy. A real whistle can capitalize on your business in such a way that it does not “plunge into a boat” if something unexpected happens for the worst.
I also understand that the corporate culture of my company had no discipline. My partners and I were mostly untidy - we had a daily shave in the gym and we slept on the floor of our office. We did not have regular business hours, and we didn’t have scheduled schedules. As a result, we have created an environment in which there is no professionalism. Unfortunately, our lack of discipline manifested itself negatively when faced with stressful situations.
Tense disputes between the founders will turn into flashy matches. We got hot and it spread to how we ran our business. We spoke with knee reactions and rapid changes in strategy. Although we viewed our agility as a competitive advantage, we lacked emotional intelligence to understand when we behave irrationally. Unfortunately, we do not have enough balance in our culture, so that we do not justify ourselves.
As founders, our job was to shape the company's values after our own convictions. Unfortunately, we indicated corporate values in our business plan, but these were just words on paper. Now I understand that corporate values are not pieces of furs that companies put on their websites to reassure investors. When these values are held by managers, they help to make difficult decisions.
I am thinking of a nationwide recall of Tylenol from Johnson & Johnson, in which 7 people in the Chicago region died in 1982 because their super-strong tylenol was coated with cyanide. J & J made a $ 100 million decision to make a nationwide review and take its products from the shelves. J & J wanted to send convincing messages to its stakeholders that customer safety had reached profit. Undoubtedly, it was a difficult decision, but top management relied on the company's corporate values to lead them through the crisis. At the end of the day, common values are a much more reliable way to control behavior in unpredictable situations than external controls.
Undoubtedly, part of the attractiveness of self-employment was a sense of freedom from the fact that I did not have a boss to whom I kept records. However, the reality was that such freedom did not exist, because I was still accountable to my interested parties. I could not just not wish. Therefore, I needed to be willing to shift and restrain my actions for the benefit of my company. This meant clarity about the values of my company, the creation of a larger structure in my organization and the inclusion of independent directors on our Board. In short, I needed to take corporate governance more seriously and make it as important as my search for profit.
Outlook (or relation)
After I became an entrepreneur, I often compared my life with friends who accepted the kinds of jobs that I rejected. While I was sleeping on the floor of my office, eating the cheapest thing on the menu, and was buried under a mountain of credit card debt, my peers had apartments in the city, corporate expense accounts, and their powers in the labor market improved, I began to fear that my friends they develop better resumes than I do, and I worked twice as hard for a small part of my salary.
Comparing myself with others, a lot of excitement was created because I was a competitive person and I didn’t want to feel that I was “lagging behind”. Although I think it is natural for entrepreneurs to fight with self-doubt, these emotions only worsened my opinion. It annoyed me because I was afraid to “waste” the years of my life as an entrepreneur, but I never became “successful.”
After the initial exception of writing a business plan and creating my company, I was almost depressed to sit in my small office, handing out debit cards to college students. I really had no gratitude for the work. In my opinion, I received a degree from Wharton to become the manager of a tiny debit card office, but I probably didn’t need to go to college to do it. It made me feel that I did not agree with my “potential”. So I wanted to bow my head and focus on growing my business faster.
It sounds ridiculous, but the founder must train to find meaning in everyday affairs, and not just in the dream of his future victory. Otherwise, he will feel powerless every time a business takes an unexpected turn and leaves its prospects worse than before. If the founder feels that he is powerless and by his whim of fate, his psyche can easily be easily damaged by an emotional slide with potential failure and success. Stress can make him make bad decisions.
A sense of failure is an inevitable part of success. Therefore, the entrepreneur should consider adversity as a necessary step that helps him learn, grow and become a stronger leader. In this regard, problems and struggles can be hidden by blessings, not curses. Entrepreneurs should watch someone like Nelson Mandella, who survived many years of ill-treatment and imprisonment, but never let the situation or his captors break it. Rather, he used adversity as a tool to transform himself and strengthen.
There are many stories of prisoners of war and victims of concentration camps who use their experience to their advantage. As Warren Bennis and Robert Thomas noted in their book Geeks & Geezers, leaders often use periods of difficulty as opportunities for reflection that allow them to look deeper into themselves and make discoveries about their own character. This is ironic, but without despair many leaders would never have had the opportunity to find their inner strength.
Considering difficulties as an opportunity to gain ego, an entrepreneur can mitigate emotional fluctuations. As Carlos Castaneda noted with his concept of a “petty tyrant”, life is filled with many small obstacles and problems, so we could also learn to use them in our interests and not allow them to drag us. In fact, obstacles and difficulties can teach entrepreneurs to maintain a sense of humor regarding their vision. He can teach the founders to laugh at life, both good and bad.
In his book, The Search for the Meaning of Man, Victor Frankl describes how life demands things from us, and not vice versa. Therefore, we must adapt to finding meaning in the daily challenges of life and using them as opportunities to live in dignity and find meaning at every moment. The study of the unpredictability of life may allow an entrepreneur to evaluate the chosen path, and not emphasize the uncertainty of future results.
It was John Keats who said that the most important attribute of a leader is the ability to be in "uncertainties, secrets, doubts, without any irritable achievements for fact and reason." I wish I had a better sense of humor when I was an entrepreneur. Not only would I have more fun, but I would be less likely to feel sorry for myself when my company ran into problems. Instead of wasting energy on anxiety, I would ridicule my anxieties, strengthen my character, and live in the present. This worldview would make me even stronger and better able to make the right decisions.
4. Deeper meaning
It was Benjamin Disraeli who said: "The secret of success is consistency of purpose." I believe that an entrepreneur must choose the “reason” to which he wants to devote himself, even in the face of failure. It should be a more ambitious goal, which is worth the battle, regardless of the outcome. In the end, of the approximately 1.8 million new businesses that are included in the US annually, fewer than a few thousand receive venture capital funding, and some of them are ever published. Of course, there are no guarantees of success, so the fundamental reasons for choosing his journey should be more than the attractiveness of financial benefits.
In fact, in business there is so much volatility that it is difficult for founders to create motives associated with the prospects for wealth. Too often the company will be in danger, and the founder will be forced to rethink aspects of the business. If an entrepreneur is only motivated by financial success, then he probably lacks the necessary endurance. Фактически, большинство новых предприятий, вероятно, никогда не начнутся, если мотивация основателя основывается исключительно на экономических преимуществах проекта с учетом риска.
В конце концов, я считаю, что мотивация для ведения бизнеса обусловлена подлинной приверженностью делу, которое больше, чем мы сами. Должна быть ответственность, которую мы чувствуем, чтобы служить другим определенным образом. Из моего опыта я узнал, что даже лучший бизнес-план может стать бременем, если вы не верите в то, что делаете. Наша мотивация не может состоять в том, чтобы выиграть сами, потому что, когда перспективы компании уменьшатся, большинство из нас будет склонно бросить курить и сделать что-то еще.
История наполнена рассказами о людях, которые рискуют своей жизнью за причины, в которых они считают. Для сравнения, очень мало написано о наемниках, совершающих такие храбрости. Те, кто совершают величайшие подвиги, делают это по причинам, которые имеют для них более глубокий смысл, а не только за деньги и похвалы. Поэтому предприниматель должен выбрать цель для своего бизнеса, которая исходит из какой-то глубины внутри него. К сожалению, это было не то, что я сделал. Скорее, я просто пытался заработать деньги, поэтому я мог «вывести деньги» и перейти к чему-то еще.
Вот почему я считаю, что предприниматель, имеющий многолетнюю преданность делу, будет в полной мере использовать преимущества своего обязательства. Правильная возможность в конечном итоге представится. Долгосрочные игроки будут выдерживать бури и будут в лучших позициях, чтобы использовать новые возможности, когда в конечном итоге будут облака.
5. Пустота
Существует интересное стихотворение от Дао Те Цзин, которое я получил, чтобы оценить с тех пор, как я стал предпринимателем. Следует:
«Со всей стеной
Сформована глиняная чаша;
Но использование чаши
Будет зависеть от части
Из чаши, которая недействительна.
Вырезать окна и двери
В доме, когда вы строите;
Но использование дома
Будет зависеть от пространства
В стенах это пусто.
Таким образом, преимущество
От чего бы то ни было;
Но возникает полезность
От чего бы то ни было.
- Дао Те Чинг
Как и стихотворение от Дао Те Цзин, предприниматели должны увидеть важность пустоты, которая требует иного взгляда на мир. Хотя пустота может быть неопределенностью, она также может представлять собой возможность.
Поскольку предприниматель собирает свои дела на место, неизбежно наступит время, когда жизнеспособность его компании сомневается. Новые рынки трудно ворваться, потребности клиентов всегда меняются, и угроза новой конкуренции всегда, кажется, скрывается. Иногда, трудно смотреть в неизвестность и видеть возможности. Легко усомниться в себе и испугаться.
Будучи 22-летним предпринимателем, я заглянул в неизвестность и увидел только две возможности. Я видел возможность личного успеха или неудачи. Работая у меня на столе до раннего утра, мой разум смог обработать подробные сценарии для каждого. Либо спать на офисном этаже станет частью истории, которую я расскажу гостям на своей яхте в один прекрасный день, или я трачу свой потенциал на бизнес, который никогда не будет успешным.
К сожалению, я не понимал, что предприниматель может видеть в своем неизвестном будущем, если он сосредоточится на чем-то отличном от его «личного успеха». Он также может видеть возможность сражаться за причину, которая вдохновляет его, независимо от того, победит он или проиграет. Станет ли он богатым или нет, будущее дает возможность изменить мир.
Вот почему истинный «огонь в животе» предпринимателя должен исходить из видения о том, что будущее, хотя и неясно, дает возможность каждому из нас влиять на жизнь других людей. Чтобы иметь максимальную власть, наше видение должно быть не просто нашим успехом или неудачей. Не о личной жадности. Чтобы быть по-настоящему вдохновляющим, нам нужно понять, как наши усилия принесут пользу жизни других людей. Разделяя это видение, мы можем влиять на окружающих нас, чтобы присоединиться к нашему делу.
