The Five Lessons I’ve Learned


I was talking to a potential new member of TAB York last week: explaining what I did, how the concept of peer coaching worked, the benefits it had brought to my members… And looking back on the seven years I’ve been running TAB York.

“So,” she said. “What are the five key pieces of advice you’d give to an entrepreneur?

Five? I thought. More like 55. Or 555. But let me try and answer the question more successfully than I answered it then. What are the five most important lessons I’ve learned in the past seven years – and by definition, the five most important pieces of advice I’d give?

Lessons Learned written on chalkboard

1.The job of a leader is to lead

You’ve pushed your breakfast round your plate in a desolate motorway service station: you’ve decided that enough is enough. It’s time to start your own business. You owe it to yourself: you owe it to your family. Sooner or later your new business will be employing people – and your job is simple. It’s to lead them: to say, ‘this is the where we’re going, follow me.’ There are plenty of other things you need to do – realise you don’t need to be an expert in everything and don’t be afraid to hire people who are brighter than you – but it is your drive, determination and vision that will carry the company forward.

2.A mistake is only a mistake

I made Spaghetti Bolognese at the weekend. I broke a bowl, tipped pasta sauce on the floor and left the gas on under a pan. They were mistakes – and that’s all they were. No-one (not even my wife) is suggesting that I give up cooking and never enter the kitchen again. So your latest idea didn’t work out: the guy you hired who was going to transform your business transformed it in the wrong direction. Move on: you live to fight another day – your vision is still the same. No-one scores 100% with their decisions – and as the saying goes, ‘the man who never makes a mistake never makes anything.’

3.Keep on Learning

I think we can say that the world has changed since I joined The Alternative Board in 2009. In that year Facebook had 360m users and 20m iPhones were sold. Today the figures are approaching 2 billion and over 200 million. In 2009 Apple had just introduced a fledgling service called the ‘app store.’ The pace of change over the last seven years has been astonishing, and it’s not going to slow down. You need to set aside time to learn – and as I wrote a few weeks ago, if you don’t develop and grow, then your company can’t develop and grow.

4.Nothing can replace your KPIs

Having just written about change, let me turn to something which can never change: your Key Performance Indicators – the numbers and metrics which tell you the current state of your business and go a very long way to predicting its future.

If I’ve seen one cause of business failure over the past seven years it’s not knowing your KPIs. Checking your KPIs every month is simply essential to the continued success of your business. And ‘How much have we got in the bank?’ is not an adequate check. Sadly, it is almost always followed by ‘Can we afford to pay the wages this month?’

5.Your product is more important than anything

Despite the internet, despite social media, despite e-mail marketing and despite every change that’s happened over the last seven years, your product (or service) remains the key to everything. And if it’s not excellent, you’re in trouble. To paraphrase the old saying, stories about bad service are half way round the world before good service has got its boots on. Not only is the world changing, it is spawning a lot of hungry competitors: if you’re not innovating and improving, then someone else will be, and they’ll be telling your customers.

6.We all need friends

Clearly I haven’t learnt to count, but where else can I finish? Over the last seven years it has been my privilege to listen to some outstanding business advice from the members of TAB York. It’s been advice which has transformed businesses, transformed lives and – on at least one occasion – saved a marriage. We all need friends and – in business – you will never find better friends than your colleagues round a TAB boardroom table. As the man said, we all need a little help

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The Monday Morning Quarterback


It’s just about the perfect description. Instantly, we all know what it means…

So the wide receiver’s wide open. 20 yard throw straight into the end zone. Hell, even my six year old can do that. What’s he do? Tries to run it himself. Gets sacked. Turnover. And it’s game over. Season over. See you in September.

There isn’t an equivalent phrase in the UK, but no office is short of an expert round the watercooler on a Monday morning.

Seriously, he thinks X is a centre back? He needs to buy Y. And no wonder Z didn’t try an inch. My mate’s brother says he’s been tapped up by City.

Whichever side of the Atlantic you’re on, no sports fan gets a decision wrong on a Monday morning. Hindsight is a wonderful thing – and it guarantees you a 100% success rate.

Sadly, the entrepreneur doesn’t have the benefit of hindsight: he has to make decisions every day – and he’ll get plenty of them wrong. As a recent article in the Harvard Business Review put it, ‘The problems entrepreneurs confront every day would overwhelm most managers.’

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…And – just like the QB on a Sunday night – entrepreneurs get plenty of decisions wrong. Any entrepreneur who gets 50% of his decisions right first time is doing remarkably well. Fortunately, TAB members can improve on those numbers. They can bring their problems to the monthly board meetings – and rely on the collective wisdom, experience and insight of their colleagues: the Tuesday/ Wednesday/ Thursday quarterbacks. Once a problem – or an idea – has been run past seven people instead of one, the chances of a correct decision increase exponentially.

But I’m aware that not everyone who reads this blog is a member of TAB York: plenty of readers are just starting their journey as an entrepreneur. So here are three of the most common problems, proposed solutions and – ultimately – mistakes that I’ve seen in my business life. I hope they help – and don’t worry if you tick all three boxes: every successful entrepreneur has done exactly the same.

  • No-one else cares like I care. The only answer is to do it myself

That’s true. It’s your business: no-one will ever care like you care. But you cannot do everything yourself. That way lies fatigue, burn-out and your wife telling you that she needs to talk… Embrace the division of labour: we live in an age where everything can be outsourced online. Your job is to manage the business: let someone else do the tedious stuff that takes away your creativity and your productivity.

  • There’s no more money in the budget. The only solution is to throw more hours at it

Let me refer you to one of my favourite books, Rework, and page 83: ‘throw less at the problem.’ As the authors say, the solution is not more hours, people or money. The solution is almost always to cut back. You cannot do everything and, as I wrote last week, success comes from a focus on your core business – not on trying to please all the people all the time. Besides, more hours simply means a second, more serious, talk with your wife…

  • Fire people: hire people

When you’re starting out you’ll be a small team: that breeds closeness – and loyalty. But not everyone who starts the journey with you is capable of finishing it. Sadly, at some stage you’ll learn just how lonely it can be as an entrepreneur: one day, you’ll accept that Bill’s just not up to it any more. You have to act: if you don’t, you’ll cause resentment among the rest of Bill’s team – and risk losing people who are up to it. And when you hire Bill’s replacement, don’t be afraid to hire someone smarter than you. See above, your job is to manage and lead the company, not to be the expert on every single aspect of it.

 

When I write this weekly post I sometimes ‘let it go cold’ for an hour and then give it a final read through. That’s what I did this week and I need to correct myself. The three mistakes above are mistakes we can make at every stage of our business journey – not just when we’re starting out.

It’s all too easy to slip back into bad habits, to think ‘it’s easier to do it myself’ or ‘If I work through the night I’ll have cracked it.’ We’ve all done it. But at least you won’t make the mistakes for long: those quarterbacks round the TAB table will be watching you…

The Road to 2017


Last week Keaton Jennings made his debut for England, playing against India in Mumbai.

He was dropped off the 21st ball of the day. At the time he’d made 0. Had the catch been taken, he couldn’t have made a worse start to his test career. But it wasn’t – and by the end of the day Jennings was the hero, scoring 112 – only the 19th England player to make a hundred on debut.

Listening to a recap of the first day’s play one of the summarisers made a really important point: even if Jennings had made 0, even if he’d failed in his first few innings, he still looked right. ‘We get too focused on outcomes in very small samples,’ he said.

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That’s something to keep in mind as you head into 2017. You’ve now made – or you’re close to finalising – your plans for the year ahead. You’re convinced they’re the right plans. You’ve run them past your colleagues and in January you’ll do the same with your fellow Board members. Come Tuesday January 3rd they’re the plans that will guide you through the year.

So don’t lose heart if you get a duck in January. If the plans don’t work immediately, don’t rip them up. Refine, tweak, adjust, get outside the line of off stump: but remember that the first month of the year – like the first steps in building a business or the first few innings in a test career – is a ‘very small sample.’

Anyway, the end of 2016 is approaching. You may now be tempted to breathe a sigh of relief. You may carelessly think, ‘Phew, thank the Lord that’s over. Leicester City, Brexit, Trump… Surely we can’t have another year that’s so unpredictable?’

‘Yes we can,’ is the answer to that question: I suspect there may be quite a few twists, turns and bumps along the road in 2017. Domestically Brexit will be triggered: how it will end, no-one (least of all the Government) knows. And I wouldn’t be entirely surprised to see Theresa May call a General Election next year, Fixed Term Parliament Act or not…

But it’s my colleagues in TAB Europe who’ll see their countries become the focus of attention next year. March brings a General Election in Holland with the far-right Freedom Party currently on course to become the largest single party. The French Presidential election is in April/May – the signs are that it will be fought out between Marine le Pen of the Front National and the likely winner, the right’s self-confessed admirer of Margaret Thatcher, Francois Fillon.

And then in September there are elections in Germany: Angela Merkel will seek a fourth term, but she will surely come under plenty of pressure from the right-wing Alternative fur Deutschland (AfD).

May you live in interesting times’ as the supposedly-Chinese curse has it. I suspect we’ll look back on 2017 and decide that ‘interesting’ was an understatement. So next year will not be a year to take your eye off the ball. No, don’t panic if your plans are not on track by January 31st. Even if the world changes so much next year that you need to completely re-write your original plans, remember the words of Dwight D Eisenhower, “In preparing for battle, I have always found that plans are useless, but planning is indispensable.”

What you will need to do next year is keep a close watch on your metrics: the two or three key statistics, ratios or measurements that absolutely determine the health of your business – the ‘pulse’ that I’ve talked about in previous posts.

Through December I’ve had the remarkably enjoyable job of listening to TAB members reflect on the past year: I’m delighted to say that far more has gone right than has gone wrong. Has there been a common thread running through the success stories – apart from measuring those key metrics?

Yes, I think there has. ‘Resilience’ and ‘consistency’ are the two words that come to mind: TAB members have consistently done the right thing and stayed true to their beliefs and their vision. And as a result, they’re reaping the rewards.

So 2017 will be challenging: I suspect the old PEST analysis will be wheeled out several times. But like all years, it will also be full of opportunities: and however challenging, the plans you’ve made, the metrics you measure and the support of your TAB colleagues will ensure that you couldn’t be in better shape to greet the coming year…

Marks out of Ten


Annual income twenty pounds, annual expenditure nineteen, nineteen and sixpence, result happiness. Annual income twenty pounds, annual expenditure twenty pounds, ought and six, result misery.

We’re all familiar with Mr Micawber’s quote – and while inflation may have changed the numbers, the essential truth of Charles Dickens’ words can never be challenged. Translate them into business and they’re the reason you monitor your cash flow, the reason you check your KPIs and the reason you keep a lid on the expenses.

Yes, you can get away with spending that extra shilling in the short term, but annual expenditure of twenty pounds, ought and sixpence catches up with you in the end. ‘The mills of the Gods grind exceeding slow,’ Sextus Empiricus pointed out in the 3rd Century, ‘But they grind exceeding fine.’

Make no mistake, the result of that extra shilling of expenditure is misery. There is nothing that drags you down – mentally and physically – like staring at the cash flow every night, realising it just doesn’t add up.

So make sure you don’t spend that extra shilling, and you can forget about Wilkins Micawber, and be happy for the rest of your business career.

Or maybe not…

…Because I think there are other areas of business life where the ‘Micawber deficit’ can have a significant impact on your happiness. It’s not just the cash flow.

Let me turn for a moment from Micawber to Maslow – and his hierarchy of needs. Right at the top of the pyramid is self-actualization: as Maslow put it, “what a man can be, he must be.”

Nowhere is this more true than in business. And it takes me right back to last week’s post and the decision to ‘move to the next level.’ If you feel you can do it, you have to do it. If you don’t, you’ll end up frustrated and disappointed – and ultimately, a danger to your business.

We’ve had a recent innovation at TAB York. Before the meeting starts I ask every member for a ‘mark out of ten.’ It’s not quite ‘life, the universe and everything,’ but it is an indication of how they’re feeling – about life and business.

Supposing I were to take that one stage further – and ask the board members to rate their own performance over the last month: to give themselves a mark out of ten?

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The actual mark wouldn’t matter: one man’s eight is another woman’s six. But in the context of this blog, one thing emphatically would matter. We all have minimum standards for ourselves. Whether that’s a six or an eight is immaterial. We all have a number that reflects the minimum level of performance that’s acceptable – that in Maslow’s terminology, confirms our self-actualisation.

To miss that number on a consistent basis – to regularly deliver less than your best – is a recipe for long-term unhappiness. As Mr Micawber might have said:

Monthly target eight, monthly average eight point one, result happiness. Monthly target eight, monthly average seven point nine, result misery.

There are few worse feelings than performing below the level you’re capable of: do that consistently, and it starts to eat into you. And suddenly ‘could have, should have, would have’ are rearing their ugly heads…

KPIs and the cash flow are crucial to the health of your business: but monitoring the KPI that’s your own performance is every bit as important.

Mention of KPIs takes me back to last week’s post: to cricket, a sport which is most emphatically measured in KPIs. Bluntly, I’m not sure whether to order a slice of humble pie or send an invoice…

You may recall that I was mildly critical of Joseph Edward Root. I wonder if he really wants to be one of the game’s greats or merely very, very good. Let’s see if he makes the decision [to move to the next level] over the next five days…

Joe Root – obviously having read the blog on the Friday morning – responded with 254 in the first innings and the highest aggregate runs ever scored by a batsman at Old Trafford.

So don’t ever tell me the blog doesn’t work! And if you’d like me to be mildly critical of your football team as the season approaches, simply send a large cheque to ‘Reid Sports Predictions.’ I’ll do the rest…

I’m now off on holiday for a week. The blog will be back, relaxed and refreshed on August 12th. And I’ll be back determined to deliver at least 8.1 to all my members through the rest of the year.

Dealing with the Dark Side


A great half term, a brilliant family holiday and – like my trip to Australia – absolute confirmation of why I run my own business.

But as I wrote two weeks ago, it’s time to consider the darker side of being an entrepreneur. How to cope when it’s all going wrong.

So my Google search was fairly straightforward – and back came the regulation 26.7m results. Almost without exception they failed to address my query.

Coping with failure is the key for entrepreneurial success. Don’t see it as a failure; see it as a learning experience.

That’s all very fine. It’s easy to trot out the old clichés, and all successful entrepreneurs have had their share of failure. Equally, you’d expect the vast majority of articles about entrepreneurship to be unremittingly positive.

But this blog has always sought to address the real world. Entrepreneurs are by nature optimistic people, but everyone running a business will – sooner or later – go through tough times.

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We’ll go through times when we wonder if we’ve made the right decision, we’ll go through times when the old security of the corporate world seems remarkably seductive – and we’ll go through times when we wonder if the price is worth paying, both for us and the family we’ve dragged along on the journey.

And once or twice in our entrepreneurial careers, we’ll go through times when the ship seems to be heading for the rocks.

So the question is, how do you cope? I’m not talking about the practical here – solving the immediate problems, keeping everyone informed, stringent cost control – I’m talking about you.

How does the entrepreneur cope when the easiest decision might be to wave the white flag? How do you stop yourself going mad? How do you put on a brave face and focus on sports day, not on what is – or isn’t – happening back at the office?

If that’s what you’re going through right now, here are five strategies that work. These themes are remarkably common in talking to entrepreneurs who’ve ‘been there, done that’ – and eventually steered the ship away from rocks.

Remind yourself why you started

…And remind yourself that if it was easy, everyone would be doing it. You started because you wanted to build something and you wanted to define your own future. Creating anything that worthwhile will involve some pain – and remember the old adage: ‘the only thing harder than carrying on is giving up.’

Take the opportunity to make changes

Tough times can be an opportunity as well: take the chance to make some hard decisions about what’s really working and what’s not working. That might be parts of the business – or it might be people. Sometimes difficult times force you to make the decisions you’ve been putting off for far too long.

Keep the end in mind

This is self-explanatory. Remind yourself why you started this journey – and remind yourself where it’s going to end. That can be incredibly difficult when you’re fire-fighting, but force yourself to do it. Lift your eyes up and look at the eventual destination. Trust me, when the fires are out, you’ll be more determined than ever to reach it.

Walk…

Do some exercise, release some endorphins. No problem was ever solved by eating junk food and gaining half a stone. Get out there in the fresh air, walk up a hill and somehow it puts problems into perspective – and often presents a solution.

…And talk

You’re not the only parent whose teenage daughter has just slammed the door and walked off into the night – and you’re not the only entrepreneur who’s ever had this problem. There is an absolute wealth of experience around any TAB boardroom table, and I’d be amazed if one of the members hasn’t experienced – and solved – whatever problem is facing you right now.

And next week I’ll take a look at one of those problems – one that everyone building a business faces sooner or later. Until then, have a great weekend.

 

The Freaky Side of Things


Sorry, the headline’s a week late for Hallowe’en…

Many of you will have read Freakonomics, the hugely successful ‘rogue economist’ look at everything by Stephen Dubner and Steven Levitt. Now they’ve a new book out – Think Like a Freak – and I was reading it on holiday.

This book tends much more towards self-help than it does towards economics, and there were a couple of points in it that really struck a chord with me.

‘Don’t be too proud to quit’ was the first one. At first glance this flies right in the face of the traditional business view that nothing can replace persistence and too many people quit when they’re just around the corner from succeeding.

But there are times when quitting makes sense: when you’ve tried an idea and it simply hasn’t worked. When your startlingly brilliant insight about what the market really, really wants has – astonishingly – proved to be somewhat wide of the mark. There’s no shame in saying, ‘Fine, that didn’t work. Let’s try something new.’ And in the days of the internet and ready-fire-aim start-ups, abandoning an idea is no longer as expensive as it once was.

One of the hallmarks of the most successful entrepreneurs is the number of failures they’ve had – which they then saw as a learning experience.

But the story that’s really stayed with me from Think Like a Freak is the one about the Chinese children and their eyesight problems…

The book makes a simple point: ‘tackle small problems, not vast ones.’ Again, that seems to be directly at odds with most business advice: surely you can’t ‘keep the main thing the main thing’ if you’re off fighting small fires?

…And you can’t get a much bigger problem to tackle than the Chinese education system. Children in the poor, rural province of Gansu were underperforming at school. The cause was eventually pinpointed: their diets were deficient in iron, which was affecting their eyesight. They were performing badly at school because they simply couldn’t see the blackboard.

Two Western economists launched a programme to give the children free glasses – and their performance in school improved dramatically.

The point is very similar to one I made a few weeks ago in Small Gains, Big Profits, where I looked at the lessons business could take from the success of GB Cycling. Some problems – improving the Chinese education system; achieving Olympic success – are so huge that the only way you can tackle them is through a series of small initiatives.

I’m always pleased at TAB meetings when a member comes in and says, “We’ve saved 5% on our heating costs” or “On average we’re getting paid six days quicker than we were this time last year.” It’s pleasing for two reasons: first of all I know that if they’re making small gains in one area they’ll be making small gains in several others – and the sum of those small gains is significant. Secondly I know that someone who’s paying that much attention to detail is going to succeed.

Business is becoming ever more competitive and knowing exactly what’s going on in your company is vital – as is knowing it at the right time. TAB members will be aware of the absolute importance I attach to KPIs (Key Performance Indicators if you’re new to the blog) – but once you’ve identified your key numbers, you have to stay on top of them. It’s no use finding out in January why you missed your targets in October.

That takes me back to the beginning of this post: deciding that something isn’t working and abandoning it is nothing to be ashamed of: realising that you didn’t know the numbers and you’ve been on the wrong path for a year emphatically is.

Next week I’ll be in a more relaxed mood. I’ll be considering one of the most crucial business questions: should you treat yourself to a couple of days in a five star hotel?

The Black Dog


First of all thank you for all the comments on the blog last week. Of all the posts I’ve written ‘Risk’ probably attracted the most – and the most detailed – feedback, by the usual mix of direct comment, e-mails and Facebook. I really appreciate them all and if I haven’t replied yet – I’m getting round to it!

But now to matters darker.

The comparisons between being successful in sport and running your own business are often drawn. Will to win. Drive. Competitive instinct. Refusal to be beaten. Absolute focus on achieving your goals. And no self-respecting motivational speaker would even dream of getting to his feet without a word or ten from Vince Lombardi.

Recently though, we’ve seen the other side of sport. For the first time, very successful sportspeople have been prepared to talk about depression – how for some of them the pressure to succeed has just been too much and it’s spilled over into mental illness.

One of the most high profile examples was the footballer-turned-Talksport-pundit Stan Collymore, and the reaction he initially received was not untypical. ‘My manager said I was too successful to get depression and only women living on the 15th floor in Peckham got depressed.’

Since Collymore there have been other high profile cases, most noticeably in cricket (the sport that unfortunately has the highest suicide rate among ex-players).

The question for this blog is an obvious one: if success in sport and success in business are so often linked, is there also a business parallel with a case like Stan Collymore? Can you be successful in business and suffer from depression? Could someone turn round to you and say, ‘You can’t possibly be depressed, you’re too successful. It’s only people who’ve failed who are depressed.’

But that’s far from the truth. ‘The better the company did the more depressed I became’ isn’t as uncommon as you’d think. Despite it at first seeming like a ridiculous contradiction, the simple fact is that success can make you feel trapped, lonely and – ultimately – depressed.

As we’ve discussed many times, running your own business is a lonely place – and the trouble is that it’s only other business owners who understand how you feel. You can have the best husband/wife/partner in the world but if they’ve never had to sack someone, never worried about how they’re going to pay the wages and never seen the order they’ve been counting on suddenly evaporate, they simply cannot empathise with you.

For me, that’s where the TAB boardroom table comes in: seven or eight people who absolutely understand how you’re feeling and who absolutely understand your problems, frustrations and worries. In some ways it’s a sanctuary: somewhere you don’t need your body armour and protective persona – and somewhere you won’t be judged.

I’ve seen some raw emotion round a TAB table. An entrepreneur who doesn’t know which way to turn? Many times. Tears? Yes, several times. But I’ve also seen the other type of tears: when the advice of the other Board members has worked and when the weight has finally been lifted off someone’s shoulders.

Stan Collymore set up a charity – Friends in Need – to help people with depression. If you think you need help, get help now. But if you think you need the help of other entrepreneurs – the only people who can really share your feelings – then think about The Alternative Board.

One last point on depression: it can hit anyone. The list of famous people who have battled the illness is long and impressive – Winston Churchill referred to the ‘black dog’ that haunted him in even his most successful moments. If it’s haunting you, just remember – you don’t have to face it alone.

The Time to Take a Risk


There he is – at the high stakes poker table. The four, six and eight of hearts are face up on the baize. He’s all in. Surely he can’t have the five and seven? Can he? You’ll have to pay to find out…

There he is again. York races. The horses flash past the post. Was that the slightest of smiles? That’s between him and his bookmaker…

Seven o’clock the next morning. As always, the first one into the office. A bank of computer screens. Stock market prices, foreign currency exchange – and the production figures from his factories; the sales figures from his shops. He finishes his black coffee, takes his tablets and settles into another high-risk, high-pressure day. Another typical day for an entrepreneur…

That’s the popular perception of the entrepreneur – someone who loves risk, who needs the adrenalin rush from risk, who even goes out of his way to create risk where none exists.

That’s the popular perception – and in my experience it couldn’t be more wrong.

How can I possibly say that? After all, I run my own business. Most people reading this blog run their own business – or at least have a significant portion of their future prosperity tied up in the success of the business they’re managing.

We’ve all taken risks. We’ve given up the security of the corporate world for the doubtful joy of working until ten o’clock at night and wondering why the person you thought you’d developed a relationship with hasn’t paid his invoice. Maybe some of us have had to tell our families that Christmas won’t be quite so spectacular this year – and spend January explaining to the building society that they’ll need to be patient…

There’s nothing more stressful than running your own business. You put your wealth, your health and your psychological well-being at risk.

But that doesn’t mean that entrepreneurs enjoy risk – and it certainly doesn’t mean that they go out of their way to create risk.

In my experience, the vast majority of entrepreneurs I work with would class themselves as being ‘risk averse.’ And as I wrote last week, that’s one of the key strengths of The Alternative Board – the collective wisdom round a Board table goes a long way to reducing risk, to making sure that you’re aware of all the possible downsides before you press ‘go.’

But there’s something else I notice as the discussion on risk goes round the table. Entrepreneurs define risk differently to other people. The entrepreneurs I work with see a different type of risk. Let me explain by taking you back to Newport Pagnell service station…

I’d finished another identikit motorway breakfast in another identikit service station – and I’d decided to leave the security of the corporate world and start my own business. Doing what? I didn’t know at that time. But come hell or high water, I was going to be my own boss. That meant saying goodbye to security, to my company pension, company car and all the other trappings of being a few rungs up the executive ladder.

And conventional wisdom dictates that I was taking a huge risk in giving all that up.

But if I didn’t start my own business there were far greater risks. Risks I simply couldn’t accept any longer.

The risk that I’d never know if I could have succeeded on my own.

The risk that I’d never really fulfil my potential.

And above all, the risk that someone else could dictate my schedule – and that I might miss seeing my boys grow up.

Almost everyone reading this blog will be able to identify with that. It isn’t conventional risk that the entrepreneur fears. ‘No money? Fine. I had no money when I started. I’ll start again.’ It’s the risk that can’t be quantified. It’s the risk of not fulfilling your potential, the risk of missing your children growing up and, above all, the risk of never knowing if you could have done it or not…

The Price of Failure


What’s the price of failure? This week, about ten billion dollars.

Or more correctly, that’s the value of success, after plenty of failures.

In many ways I’ve wanted to write this post for a long time. In part it’s about Dropbox, and I couldn’t live my life or run my business without Dropbox.

The wheel is good: electricity is useful – but they’re not Dropbox.

The other week Dropbox (it’s an online storage company if you’ve been living in a cave) secured some additional funding – just the $250m of petty cash. That funding put a value of $10bn on Dropbox and opened the door of the billionaire’s club to the company’s 31 year old co-founder, Drew Houston.

Let me quote from a recent BBC article on Dropbox and Drew Houston.

While studying computer science at MIT he happened on the idea of an automated gambling bot for playing poker. But it kept malfunctioning. “It kept folding my hand. It was an automated way of losing money.” Three years of work on [his next project] also proved fruitless. Then:

“I was on the bus from Boston to New York. I fished around in my pocket and found I’d forgotten my thumb drive. I never wanted that to happen again.”

So with four hours to kill and no USB flash drive Drew Houston started to write some code…

Initially potential investors were lukewarm – and after the money-losing bot and the three loss-making years on the previous project it would have been easy to give up. After all, why should investors want to back someone who’s already failed at least twice?

I’ve written about failure before on the blog. Failure isn’t failure it’s just another step closer to success. Failure isn’t failure, it’s just a learning experience. Every time you fail you’re one step closer to succeeding.

It’s very easy to trot out the well-worn business clichés, most of them written by people who have never been anywhere near running a business in the real world.

Everyone reading this blog will have failed at some point. Something they thought was an absolute certainty – the business idea that would catapult them to fame and fortune – will have gone hideously, painfully, expensively wrong.

It’s probably gone publicly wrong as well. And there’ll be no shortage of wise-after-the-event experts lining up to tell you where you went wrong. Plus an equal number celebrating that well known German defender Schadenfreude…

So coming back from failure is tough. It’s not just another step on the road to success, it’s a real blow – emotionally, financially and quite possibly physically. When you’re running your own business and you have so much capital – emotional and financial – tied up in it, failure can’t be anything else.

But we’re entrepreneurs: sooner or later we bounce back – and come up with the Next Great Idea that will catapult us etc etc.

Sometimes, though, it’s a good idea to subject the NGI to a little outside scrutiny – and this, I think, is one of the key strengths of the Alternative Board.

It was an absolute winner. It would transform my business. Move my retirement ten years closer. And add at least another nought to the value I’d get when I sold out. But by the time it had been round the TAB table I could see all the flaws in my idea. That Board meeting saved me tens of thousands of pounds and I will be eternally grateful.

I’ll obviously keep the identity of that Board member to myself – but it’s far from the only time I’ve had that said to me in a 1:1 conversation.

But just as importantly I’ve seen several boards have a ‘Dropbox moment’ when a member has put his Next Great Idea to them and as one they’ve said, ‘Yes. That’s obvious. And simple. And it’ll work.’

At that point there’s only one piece of advice the Board needs to give. Three words. The old Nike advert. Just do it…

Jam Tomorrow


We desperately need to do the kitchen. This work-top’s had it.

I know, I know…

It’s no use saying ‘I know.’ We can’t live like this. And that’s before we tackle the bathroom – which is barely fit for human habitation.

I know that as well…

So when are we going to do them?

Soon – alright? It’s just that I can’t afford to take the money out of the business right now…

I’d wager that all of us running our own business have had a conversation that went something along those lines…

As I said last week, entrepreneurs are by nature optimistic: they have an absolute conviction that tomorrow is going to be better than today. But the ‘jam tomorrow’ argument is a tough one. That feeling was echoed in a recent Board meeting – and in a separate one-to-one: it’s much easier to be resilient and optimistic – and to see the glass as half full – if you know the business is making some money and you can draw some cash from it.

After all it’s not just your spouse that you have to explain the ‘jam tomorrow’ argument to…

I realise there hasn’t been a pay rise for three years. But you don’t need me to tell you the state of the economy. And look at our order book. Look at the potential business we’ve got in the pipeline. You must be able to see that a year from now this will be a totally different company.

But ‘a year from now’ doesn’t pay for a summer holiday – and you’re not the only one who needs a new kitchen, bathroom or car.

However, there’s one more person you need to have the ‘jam tomorrow’ conversation with. And this one might be even harder than your spouse or your staff. The person you need to talk to is yourself. Yes, I wrote last week that entrepreneurs are naturally optimistic – but that doesn’t mean we don’t have dark days. We wouldn’t be human if sometimes we didn’t question ourselves – and wonder if it really will be jam tomorrow, or whether we’re letting down the people we love and the people we employ.

So what’s the answer to the ‘jam tomorrow’ question? Obviously it varies from business to business and entrepreneur to entrepreneur. But there are three things your answer cannot be:

It can’t be indefinite. You can’t answer the question by turning into Wilkins Micawber and saying ‘something will turn up.’ 99% of the time something will only turn up if you plan for it and work for it.

Your answer can’t be indecisive. When you’re asked about the new kitchen or the pay rise you can’t say, Soon – alright? No, I don’t know when. How can I know when in the current economic climate? As soon as things improve. Hopefully that won’t be too long… Your spouse and your staff won’t accept that – and they don’t deserve it either.

It can’t be a lie. As 10,000 Physics teachers have said, ‘There’s no point cheating, boy. You’re only cheating yourself.’ And there’s no point lying to yourself either: if the jam tomorrow is actually jam that’s three years away, far better to admit it to yourself and to everyone else. If you’re saying to your spouse, ‘I’m sorry, you need to put your dreams on hold for a while’ then you need to be upfront and open about it.

What the ‘jam tomorrow’ question does highlight is the constant need to set realistic and challenging – but achievable – targets. Hopefully that’s where TAB comes in: rest assured that every Board member round the table has at some point realised that it won’t be ‘jam today:’ but they’ve come up with successful strategies to make sure that it definitely is jam tomorrow.