Tag: Idea

When Founding a Business, Be Wary of Stray Ideas

I’ve yet to run my own business in the traditional sense. However, I have conceived business plans and pitches with teams of strangers on a number of occasions. I’ve also, on a number of occasions, conceived, socialized and built new programs for established companies during my career. And finally, I’ve had the pleasure of witnessing many presentations given by startup teams and venture capitalists, many of which elucidated the same handful of conflicts that plague the foundations of many businesses.

I say all this to let you know where I’m getting my information. I also say all this so that the following statement makes sense:

Nobody cares about an entrepreneur’s Idea. That should include the entrepreneur, but it often does not.

Ideas seem strong at first glance. But, they often lack long-term power by themselves.
Ideas seem strong at first glance. But, they often lack long-term power by themselves.

“The Idea,” as many entrepreneurs would put it as a chorus of angels fill their conference room with “Hallelujah” and the venture capitalists present faint from overstimulation, is just what the entrepreneur intends to sell to people. It’s a new social network for expats. It’s a new delivery app for the sharing economy. It’s a cab service for the new millenium. It’s whatever they want it to be, it’s not in the least bit interesting and, if they conceived it too hastily, it will be the death of their founding team.

That last bit is the really important bit. The part about founding team death. A hastily-conceived idea will kill a founding team, because a hastily-conceived idea attracts members of the founding team to the business for different reasons. I’m working on the cab service because I like disrupting industries–I value excitement. Betty is on the team because she believes commuting around a city really needs to be made easier–she values comfort. Ron’s on the team because he’s the one who came up with the idea in the shower one morning. The cab service will be his darling, his tangible contribution to the world. And he really values a sense of accomplishment.

Be wary of Stray Ideas.
Be wary of Stray Ideas.

In this case, Ron’s idea is a stray. It’s a Stray Idea and should immediately send up red flags for Betty and me to see. The reasons behind each founder’s buy-in aren’t clear when the idea is a Stray. Stray Ideas are hastily conceived. Stray ideas are ungrounded. Stray Ideas lack direction. And most damaging of all, Stray Ideas are nigh inseparable from egos.

Stray Ideas kill founding teams.

But neither Betty nor I see the red flag and, for the sake of example, we agree to join Ron’s team.

We come up with a business plan, pitch the business a hundred times, and not a single investor bites. Without investment, we’re not a company, so it’s back to the drawing board.

What happens at the drawing board is what will kill the team.

“Alright, guys. Supercab 2000 isn’t getting us anywhere,” laments Ron. His baby was denied the life he so earnestly felt it deserved.

“Yeah,” say I. “Anyone have any other ideas?”

There’s a pause.

“Maybe,” begins Betty, “What if we tailor the idea just to airport transportation? Like a luxury ride to the airport?”

Likely, mine and Ron’s faces are doing the same thing at this point, and the same noise is coming out of each of them. Our lips are pursed. Our eyes are squinted. Our heads are cocked. We look a bit like we’re grimacing. A high-pitched “mmmmmmm” is coming out of each of our faces.

Immediately, the idea sounds off to both Ron and me. Neither one of us knows why, but we feel it.

It’s because Betty’s looking for more ways to make life comfortable. Meanwhile, I’m looking for more ways to make life exciting and Ron is looking for more ways to feel accomplished. We’re all focusing on values that we hold, but that the others apparently do not. Betty’s idea gives neither Ron nor I what we’re seeking.

Ron and I will then pitch ideas that will meet the same reception as Betty’s. We’ll be at this impasse for awhile–until we accidentally land on a new idea that simultaneously satisfies three different values, or we split up and look for new founding teams.

What if one of our investor pitches had succeeded? What if we had never had to return to the drawing board?

Our team would still have died, but conflict would have drawn out for a much longer period of time. What happens when it comes time to pick a target market? What happens when we decide upon our first ad appeal? Ron wants to position our service as a wealthy status symbol to those who value acheivement as much as he does. Betty wants to position it as a convenience to anyone who feels busy. I want to target gen Y rabble rousers by positioning our service as the death of a stodgy conventional cab industry. We’ll ultimately have the same “final conversation” we would have had at the drawing board. Only the timing and the subject of debate would be different.

Maybe the result of all of this conflict would be dissolution of the business. More than likely, two of us would force the third out, or one of us would find a way to edge the other two out.

At this point, it probably seems like the alternative process I’m endorsing is extremely self-centered. Like the nature of the market isn’t even a consideration. That’s true and it’s also not true. Focusing on founder values is essential, because it’s much easier to market a new business to people who already think the way you think. If Ron, Betty and I channel our own values into the business, we’ll naturally appeal  to what you might call “target market prime.” Appealing to that market will be easy, because we share a value with them. We know how to appeal to them. The market will also be large, because the common value we identify will be a terminal value, not confused with an esoteric belief or attitude.

As businesses mature, it would seem staying true to the value that linked its founders to Target Market Prime is incredibly difficult. At that stage, the business has probably hired a ton of people who don’t share that value, and it’s probably grown beyond Target Market Prime. It’s grown into new markets that may or may not share the original value.

But we’re starting a business, right? We’re worried about getting the business off the ground. Developing a business into maturity will require strategy we don’t yet need. For now, we can make our team more cohesive and the ideation process much more straightforward by aligning on at least one common value from the beginning. Even before Ron brings his stray cab idea to the table. Especially before that. Clearly, excitement, comfort and achievement are mutually exclusive among us. But, on what do we all agree? I’ll be investigating that line of questioning in a post to come very soon.

Until then, be wary of stray ideas.

Post #7: Bavaria is the Texas of Germany

In Junior High, I had to learn a second language, and I had three choices in school: Spanish, French, and German. I’m pretty sure most Gen Y Americans can relate to that (I think iGen are learning Mandarin, too). As a Texan, Spanish was the practical choice. Mexico is our neighbor and a major inspiration for our culture. Not to mention, a Texan without a Mexican acquaintance is a person who never leaves the house.

In college, as my mind opened to other world cultures, I would affirm my choice in a different way. Germany (and bits of its neighbors) speak German, France (and Canada) speak French, while South America, Central America and Spain speak Spanish. Travel potential earns Spanish an extra 100 points.

Then, I met Roxana. 100 extra points for Spanish.

Now, I’m in Munich, and I’m about to give Spanish an extra 100 points. I am learning that people speak Spanish everywhere. For instance, in my heart of hearts, I feel like a ton of people in Munich speak Spanish natively. For the life of me, I can’t find the statistics to support it, but I don’t have the nerve to deny it, either. Let’s talk about my misadventures through statistics before I get into why I think so many Spanish speakers live here. That way, you’ll know how how supremely justified by science my perspective is.

First, I tried to find out how many people who live in Germany are Germans. According to the CIA’s World Factbook, that stat is right around 91%. Damn. That’s doesn’t verify my suspicion at all. Well, maybe many of the country’s immigrants come from Spanish-speaking nations. The same source says that 6.1% of Germany’s residents are non-Turkish and non-German, and then lists Spain as one of the six major “other” immigrant groups. No other Spanish-speaking nations are listed. Crap.

But, Germany’s a complex nation, right? The World Factbook, for instance, says that Roman Catholics are 34% of Germany, but a whopping 80% of Bayern, and my German teacher said to us that Munich is pretty much a complete mix of religions (those stats and vague informative summary zoom in from nation to state to city, for anyone unfamiliar with the country). So cities don’t necessarily represent states or the nation, here. Maybe Munich has an especially high Spanish-speaker population, even though Germany as a whole does not. Well, a 10-minute round of research didn’t reveal anything very telling, except that no Spanish-speaking nation is among the top 6 immigrant populations in Munich (Wikipedia). 22% of Munich residents are from other countries, and the top-6 nations make up about half of those people. That leaves a max of about 10% of Munich for the Spanish-speaking countries. Not much, unless they are all of the 10%.

So, Spanish speakers still don’t seem to be very numerous, here. But maybe every non-top-6 nation in Munich is a Spanish-speaking nation. That would put their numbers at about 10% of Munich residents, and I could finally say that Munich is full of Spanish speakers! Maybe I’ll find out that a lot of Germans learn Spanish as a kid, inspired by all of their Spanish-speaking neighbors. Maybe I can use Spanish education to infer a large Spanish-speaking population, like one can with the Texas population.

5% of Germans learn Spanish.

Thanks for nothing, Wikipedia. I still have my gut feeling that Munich is full of Spanish speakers, but I don’t have any data to reinforce it. Well, I do have something. I have met and spent solid time with about 17 people so far in Munich. Of those, 11 speak Spanish as their native language. And no, I did not meet all 11 through Roxana. That puts the makeup of my new friends in Munich at 65% hispanohablante. Wow, Munich is full of Spanish speakers!

This educational rant brought to you by: A Misguided Use of Statistics