Digital Disruption

This past week we’ve witnessed a global celebration of the entrepreneurial spirit.  I haven’t slept much all week as I’ve been busy networking, listening, learning and participating in a whole bunch of events in Ontario — Entrepreneurship Week in the Waterloo area, the Ivey Venture Forum in Toronto and SproutUp to name a few.

What a magnificent time for entrepreneurship across the globe!

I’ve been energized and invigorated by the amazing personal stories of discovery, failure, heartache, passion and success of the following people:

• Chris Hughes (cofounder of Facebook, MyBarackObama)
• Ali Asaria (founder of Well.ca)
• Razor Suleman (founder of I Love Rewards)
• Tim Bray (cofounder of Open Text, father of XML and Search)
• Andy Macaulay (founder of Zig)
• Matthew Corrin (founder of Freshii)
• Mitch Wolfe and Emily Rayson (cofounders of bTrendie)

I love looking for patterns and extracting and distilling common themes in life and business and this week certainly has provided much opportunity to do that. Each of the entrepreneurs above come from different backgrounds, different countries and different environments but they all live and breath the following 10 themes:

1. Solving a personal problem in a way that is disruptive and adds meaning to the world – In my opinion, entrepreneurs who are focused on building a solution to a personal problem have a clear advantage over those who aren’t . They have personal experience of the problem and they have built-in, natural  authenticity and a personal, passionate story they can use to rally their teams, attract investors and sell into the market. They’ve experienced something that got under their skin, drove them crazy with frustration and they said, “there must be a better way.”

2. Having a global market for the product or service their building – an obvious one. Entrepreneurs look to achieve success at scale.  This is different from someone who starts a small business to serve a local market and has no desire to grow or expand beyond their local market. There’s nothing wrong this that but it doesn’t fit into the realm of entrepreneurship.

3. Hard work – by definition an entrepreneur is a doer who is self-motivated and isn’t afraid of hard work.  In fact, an entrepreneur doesn’t define what she does as work at all.  When one is aligned with one’s internal mission and focused on achieving the milestones and tasks required to succeed, the “work” becomes a driving force, an all-consuming passion that becomes an obsession.

4. “Just Do It” – There’s a place for planning and strategy but it is meaningless if it not executed.  True entrepreneurs get sh*t done and are naturally oriented to action.  We live in a world of action and to be successful entrepreneurs must be able to conquer their fears, move out of their comfort zone and execute. In today’s world, it is far better to do, test, learn, measure and iterate that to spend time planning and strategizing.

5. Team, hiring and culture – Many of us have failed because we haven’t had the “A” team; have hired the wrong people and have not built a culture of entrepreneurship.  This one is especially close to my heart.  A past company I built was growing rapidly (3x growth) and we needed to scale staff to meet demand.  We hired rapidly and indiscriminately and later almost lost our way as product quality fell, customer service suffered and profitability took a hit because we had not hired “A” players and had not built the right culture or processes. Razor Suleman from I Love Rewards and Matthew Corrin from Freshii both related their own experiences that mirrored my own past experiences.

6. Scarcity and abundance – Entrepreneurs thrive in an environment of scarcity: scarcity of time; scarcity of capital and scarcity of resources.  When startups raise too much capital (which would seem to be a good thing on the surface) they can often lose their focus and go down a path of self-destruction. There are many classic examples of this in the pre-NASDAQ meltdown of the late 1990s where VC money flowed in abundance.  Razor Suleman spoke about what happened at I Love Rewards in 2006 when they suddenly received several million dollars of VC money.  They had already experienced several quarters of positive cash flow and when the VC money flowed in, they decided to spend it on a cool new office space and new “cool stuff.” Razor spoke about how destructive this was to his business and how they suddenly started burning cash and almost lost their way before course correcting themselves back to profitability.  Extreme discipline and focus is needed to counter our natural tendency to relax and lose focus when we’re suddenly surrounded by abundance – it’s a part of human nature that is hard to conquer.

7. Business model focused on profitability – many of the entrepreneurs spoke about their focus on getting paying customers; their focus on the numbers and their focus on tracking and managing the key business metrics to drive towards profitability.  In my opinion, I think it is very healthy that the current scarcity of VC money and the global recession has brought us back to the key driver of entrepreneurial effort – making a profit.  Some may disagree and say that startups need to focus on scale / building a user base / a community and that profitability will follow.  Both top line and bottom line are important.

8. Speed and agility – Tim Bray spoke about the need for speed and agility.  This is especially important in the world of Internet-based startups that are developing software platforms.  In today’s world of open-source technology (e.g. Ruby on Rails), Facebook, Twitter and Ning, startups are able to build prototypes very quickly and build community very quickly. It’s the perfect environment to do rapid prototyping, test, learn and iterate. Speed and agility are key competitive advantages that are being used to great effect. This also works really well in a scarcity market because you can get into market with a minimal investment. I recommend looking at Eric Ries and his “lean startup” philosophy to learn more about rapid prototyping and fast cycle times for both product development and customer development.  One of my favorite mantras is, “Innovation is failure sped up.”  Success comes to those who can learn quickly from failure. The faster you can operate, the faster you can learn and the faster you can get to success.

9. Tie into the megatrends of the day, as many as possible.  Most, if not all, of the startups I saw this week are tapping into the 10 global megatrends discussed here.

10. Luck – after all of the previous 9, luck still plays a key part in whether an entreprise is successful or not.  It was very refreshing to hear Chris Hughes and others talk about the fact that luck played a key part in their success.  Howard Hughes’ famous quote, “Wake up early; work hard; strike oil” is eternally valid.  The first two are essential ingredients for success and are in the control of the entrepreneur but the last one still has an element of luck attached to it.

The world is full of hungry, passionate entrepreneurs and I feel privileged and grateful to be living in this time of huge change and opportunity.

So, that’s what I got out of this past week and I’d love to get your feedback and comments – do you agree? disagree? What would you add?

Tweet This Post