The Ego and Entrepreneurship

Over the past six years, I’ve worked as a consultant, business leader, and entrepreneur with a large number of entrepreneurs.

There are two types of Entrepreneurs, each of which I will define:

1. Successful Entrepreneur
2. Unsuccessful Entrepreneur
3. New Entrepreneur

They are not particularly engaging definitions, are they? Let me define them based on their characteristics, as the “New Entrepreneur” out there could save themselves a lot of headaches by identifying the behaviors that typically result in failure.

Sucessful Entrepreneurs

These men are simple. They understand the rules of the game. They comprehend why you establish a business. They do it repeatedly because they enjoy the challenge. They are not seeking the presidency for their egos, the idea, or the need to have President on their business card. They are unable to do anything else besides construct objects and sell them. They initiate it, then turn it over to others to manage.

Unsuccessful Entrepreneurs

For the Unsuccessful Entrepreneur, nothing seems to go right. The majority of the time, they try again and succeed marginally better the next time. Some eventually achieve success. Frequently, they give up and return to a 40-hour-per-week job as a safety net. Their idea, product, or service solves no one’s problem other than their own.

New Entrepreneurs

I have a great deal of respect for individuals who strike out on their own or attempt to put an idea into action. These are generally liberal-minded individuals who don’t fit into the corporate structure (not to confuse the Rush Limbaugh listeners, but being liberal-minded means finding new ways to do things as opposed to the traditional methods). Or, it simply means thinking outside the box. Having the audacity to question how things are done and propose an alternative method.

So, the new entrepreneur has a brilliant notion! Then, they become enthusiastic because they could earn a great deal of money doing it! “I’m going to be wealthy!” Therefore, they embark on the emotional high of entrepreneurship. They fall in love with their idea. It is the best and only investment-worthy idea. Most need money to fund their idea, but are unwilling to sacrifice anything to obtain it. Their business valuation is grossly inflated, and they have no sales. Ego and control begin to interfere.

This is a common occurrence in the startup ventures in which I have participated. The pattern is evident as I sit at the Venture Club of Indiana and listen to new ideas being pitched around the table. The “New Entrepreneur” is enthusiastic about their brilliant idea, but they cannot articulate how to profit from it. Their market assumptions are not well-defined, and they do not comprehend what is required to launch a business. They do not comprehend why nobody will invest in their company. Their ego enjoys the fact that they can now put “President” on their business card, as they are passionate about the concept.

Therefore, what is crucial for new entrepreneurs? All that matters is sales.

During my tenure as president of the Indiana Entrepreneur’s Alliance, one of our meeting’s attendees made an important point. Everyone says you need an accountant and an attorney to start a business, he said. Therefore, everyone goes out and hires an accountant and an attorney to make you feel comfortable with your idea. This is incorrect. Before hiring an accountant and a lawyer, he suggests obtaining customers to determine the viability of the concept. Is what you do in demand, and are individuals willing to pay for it?

In other words, the focus is on marketing and sales. As a New Entrepreneur evaluates the idea, he or she must prioritize sales and marketing. Introduce the concept, product, or service into the marketplace and see if anyone will pay you for it. Do you need a supporting infrastructure? Yes. Must you be capable of delivering it? Yes. However, determine what kind of expectations you can set and manage. Another successful entrepreneur advised me not to fear success. If you can show an investor a book of business, you can always find money. And it is always possible to deliver.

In our web consulting practice, we frequently encounter the New Entrepreneur. Some individuals are searching for the “Mirror.” “Come in and tell me I’m great, that my idea is great, and that you can sell it the way I want it sold, despite my lackluster success to date.” The majority of our clients who are attempting to sell products or services utilize the Internet extensively. They prioritize their logo and image, as well as their name. Unsuccessful entrepreneurs are eager to feed their egos at the expense of results.

The reality is that New Entrepreneurs must concentrate on outcomes. Results in business equal sales and profits. Logos, names, and images can have value if consumers purchase because of the logo, name, or image.

Focus on answering your customers’ questions:

What exactly is it?
How much is the item worth?
How do I get it?
Has anyone else utilized this?
What are they saying?
If not, then what? What benefit do I gain from it?
Yes, I wish to purchase one!

With limited time and resources, the focus must be on locating the market, bringing it to you, engaging the market, and closing deals or selling product. The essential question:

Will my actions or expenditures result in an increase in sales?

People always feel the need to reinvent something that has already been proven effective. (Ok… I respect out-of-the-box thinking, but money can be wasted on IT projects that provide little value in the end. E-Commerce is a field in which individuals feel the need to “customize.” We had a client whose e-commerce system did not support standard marketing practices for e-commerce websites. However, they did not because the one they were using had a feature that offered neither the buyer nor their business any value. Again, was what they were doing going to increase their sales? However, they chose to spend $20,000 when $3,500 would have sufficed for the following five years.

Therefore, New Entrepreneurs, consider the following:

No one is interested in “the idea.” They are concerned with how the concept will benefit them.
Investors are uninterested in “the idea.” They are concerned with the profitability of their investment in the concept.
Investors do not invest in “the idea”; rather, they invest in the individuals behind the idea. If you cannot demonstrate execution ability, you will not receive investment.
Without sales, being president of nothing has no value.
It’s all about marketing and sales, especially for new businesses.
a. Always consider whether one’s actions will result in increased sales.
b. Will my expenditures result in increased sales?
c. Am I able to apply metrics to my actions?
The emphasis is on execution.

Regarding web marketing, the same principles apply. Here is the list to remember:

The visitor to your website is not interested in you; they are interested in what you can do for them. They desire to know:

a. What is it?
b. What is the significance?
c. How do I get it?

Before spending money on an expensive website, can you answer the following questions?

What is the size of the market?
What search terms do people use to find your product?
How much should advertising cost?
Who are your primary competitors?
What exactly are they doing?
What are they failing to do?
Who are the highest-ranked websites?
Have you budgeted for web marketing?
On a monthly basis?
You are a new business, and people do not recognize you. And until you spend millions drilling your brand into the American psyche, they won’t recognize it from a hole in the ground. Use what you do as your name or what your customers call your product. This strategy was effective in the past and continues to be effective today. International Business Machines, Advanced Micro Devices, American Telephone and Telegraph, General Motors, General Electric, National Cash Register, American Airlines, and Budget Rent-A-Car have provided evidence. Not an obscure Latin name whose meaning is only interesting to you.

There is nothing seductive about Internet marketing. It also pertains to execution. It is about outcomes. There is no corporate ego involved. It is about the benefits your product or service provides to the buyer and the investor.

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