Which Advice To Follow?

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The World is full of advice.  And in entrepreneurship, we can choose from hundreds if not thousands of books that either advise us on how to become successful, or tell us the history of the successful. And it seems that many of these are just re-organization or re-hashing of a few core ideas:

 

 

1. Do what you love.  (proactive)
2. Pivot and react to market demand.  (reactive)
3. Build Product, not services companies.
4. Focus on  helping others, not yourself.
5. Work on the business, not *in* the business.

But it strikes me each time I hear one of these, that they’re not always true!  And I guess it makes sense – to condense a lifetime of learning into a small sound byte means that you must dispose of a lot of detail.  But too often I think these are taken literally.  Let me take a few as examples:

Do what you love – I personally struggle with this one.  The premise is that if you follow your own bliss, then it won’t feel like work and you’ll have the energy to go the extra mile and overcome your competition.  The passion will come through and your customers/clients will see the authenticity.  That’s great and makes a lot of sense … when its true and when you have an opportunity for that feedback loop.  But what if your love is music?  The odds of success in those cases are astoundingly low, particularly amidst the disintegration of the music industry! But what if your odds of success are less than 10%, compared to the next best option which is 70% odds of success.  Is this really still good advice?

Product Scale, Services Don’t – The current zeitgeist wisdom of Silicon Valley is that you should only do products businesses, because services (consulting) businesses do not scale well.  With products, you can create it once, iterate a few times, and then sell it a million times.  But with consulting, you have to hire expensive and difficult to find consultants with egos to be managed etc.  Sounds simple.  But the overlooked half-truth here is that with product development, you’re taking all the risks of a services business, and compacting them all up-front with expensive development and no income yet.  Whereas there are small potholes all along the way for services businesses such as empoyee retention and cashflow, there’s one MAJOR hole at the very beginning with products, which  is very dangerous for a young entrepreneur.  On one hand I guess you can fail quickly this way and move on, but if you’re using your own money, wouldn’t you rather spread it out a bit to lesson the risk of failure altogehter?  If you’re in Silicon Valley, have raised $500k of other people’s money and have a great idea, then sure – build a product!  But if you don’t have those things, why would you?  The risk is too high and your odds of success are quite low, given how much competition out there *does* have the money that you do not for marketing etc.  In that case, you really *should* start a consulting business.

On another front, I recently watched a video of the speech that Steve Jobs famously delivered at a Stanford graduation.  He talked about how he was a little lost while attending Reed College, dropped out and took calligraphy and fontography classes.  Despite being a little aimless, it was okay because it turns out this life enrichment was what he drew upon to make the Mac special. His point was again, follow your bliss because you don’t always know where these things will end up; you can only connect the dots looking backward.

His point sounds brilliant, when said in this context.  It is after all the key to the success of one of America’s most brilliant modern-day “invent-aprenuers”.  And I can see how it makes sense if you are going to be creating things for society.  But what if your vision is to become a professional in a much more structured world (law, medicine, etc).  In those cases, was such sojourning a value or a waste?

I’ve heard so many stories of successful entrepreneurs that become successful.  After which, we’re all told to follow their lead.  Just create a social network like Mark Zuckerberg did. But every one success story that we can point to, there are a thousand dead entrepreneurial dreams littering the path to success.

My point is not to be cast doubt on entrepreneurship; quite the contrary.  I am instead saying, know these success rules for what they are – half truths.  And know your own situation and gauge whether this particular rule really applies to you.  If you’re a student in a dorm room with free time to kill like Mark Zuckerberg, then absolutely – go create your dream and see what happens.  Apply to YCombinator and every other accelerator program while you’re at it. Its not only your best chance to success, it reinforces your skills and is a great resume builder at worst.  So what did you loose?  If however you have a family, a mortgage, and are otherwise giving up a six-figure income while you sit back and build your dream, the risks and opportunity costs are much higher, and the secondary benefits are much lower.

To sum up, know your own reality and balance it against your dreams. Going to one extreme or the other is probably not going to maximize your odds for maximum success.  And if I may create my own soundbyte it would be this:  Look for secondary benefits for anything you do.  If you create your business and fail, can you at least get a career bump from the experience or will it help get accepted to that graduate school you were considering?  These things also help to lesson the risk.  Keep in mind that entrepreneurship isn’t just about taking risk, its also about managing and a mitigating risk so that you can live another day if you turn out to be wrong!