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How to Start a Business

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Don’t follow MBA, SBA or SCORE advice.

The SBA’s SCORE site had a “how to start a business” blog recently, but the traditional MBA-style advice is too “ivory tower” to work. It’s both much simpler and a little harder than they make it sound.

The SCORE blog post says figure out 1)what you’ll do 2)who your competition is 3)your overhead 4)how much money you can make 5)your potential profits, and 6)your funding. If you follow these six steps, you’re almost certainly going to fail.

It’s well-meaning advice, but doesn’t reflect how it really works. I’ve started and grown seven businesses, two that are international and made enough mistakes to figure out some basics. Here’s how I would start a business:

1) Take your product or service to market, put a high price on it (it’s always easier to come down than go up) and see if someone will buy it. If this doesn’t work, don’t do any of the other steps above – they are a waste of time if you aren’t already selling something. And if it does work, most of the other steps above will force themselves on you at the appropriate time.

Finding someone to buy your product or service is the first and only thing you should do before you do anything else. It should have been #1 on the SCORE list.

2) DON’T do a business plan (steps 1-6 in the SCORE blog) – they are nonsense and fortune-telling, and they keep you from going out and trying to sell your product to see if you have something viable. They also make you think you know what you’re doing, which keeps you from seeing great opportunities and obstacles. And they uncover 127 things that COULD go wrong (not WILL go wrong), which causes you to spend precious time and resources mitigating things that will never happen, and paralyzing you with all the bad things that might happen if you go into business.

The second worst thing you can do starting a business is to do a business plan. The absolute worst thing you can do is follow it. Check out the story of Webvan – a $2billion startup that is the classic case of a company that built an incredibly elegant business plan with brilliant management, then followed it right off the end of the earth (and they didn’t do #1 above until they were $1 billion in debt). Do a 2-Page Strategic Plan instead.

3) Figure out your profit margins. How? See #1 above – sell something at as high a price as you can – well above your minimum margin. Again, you can always come down. I worked with one client whose product cost $.35 all in (including marketing). They made a few of them, put it on the market for $8.50 and it didn’t sell. Over a period of a couple months they got the price down to two for $6.50 and they sold like hotcakes. Once they knew that their margins were huge, they had real data to determine their profitability. Do not determine your profitability in the ivory tower of a business plan – it’s voodoo.

4) Never take outside money unless there is no other way. 84% of the Fortune 500 companies never took VC or other early stage funding. It’s a myth that you need money to grow your business. VCs want you to believe it’s a must because they want to grow your business REALLY FAST so they can sell it out from under you and run off with cash. They’re building cash cows, not businesses.

5) Do NOT figure out your competition. You don’t have any competition except your own head. Do NOT look at what other people are doing to find out how to be successful. If you don’t have enough creativity and uniqueness to enter the market without looking at what others are doing, you shouldn’t be in business. See my blog titled Your Competition, Isn’t.

Doing it Wrong and Fixing the Process
I worked with a business owner recently who made the mistake of consulting with SCORE and doing everything they recommended. He had 80+ products defined and produced, a warehouse, financing, a great retail location, and $250,000 in inventory. When he finally started taking his products to market, the market wanted them packaged in entirely different ways and amounts and at different price points, and about 70 of his products were not selling.

We recommended he dump the warehouse, the retail shop and 75 of his products, and get on an airplane to major retailers, get their feedback, and learn his “business plan” in the trenches. With this approach his overhead is nearly gone, and he is now making money and profit. He would have been out of business in six months the other way. He can build all that other stuff after he makes some money.

How to Start a Business – redux; Sell Something.
Real businesses do not start with thinking, planning, researching, compiling, statistical analysis, building a “great” product in a lab, marketing, vetting your competition, estimating your overhead or finding a possible funding source.

Real businesses don’t start that way – not HP, Apple, Honest Tea, Google, 37Signals, Facebook, a plumber, or just about any other real business you can name. Read Bill Hewlett’s quote under HP’s Early Days here – he went and sold something (a few really stupid things) – this is how you start a business.

Go sell something. If it doesn’t sell, do what Hewlett and Packard did, sell something else. Don’t do anything else first. Once you have something that sells, your “business plan” will unfold in front of you in real time, in the real world. It’s counter-intuitive and doesn’t follow the mantra of the MBAs or the SBA/SCORE who think you should get it all figured out ahead of time, but it’s the way real businesses are successful.

Stop planning – get selling (quickly and inexpensively, on a very small scale).

Why Africa (& the world) should reject Gladwell’s “Outliers”

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Victimology doesn’t work.

I read Malcolm Gladwell’s book”Outliers” while in the poorest part of the poorest country on earth. Gladwell’s theory of success will not help Africa, or you. It’s actually dangerous to those who CHOOSE to live a life of significance.

Circumstances don’t make me who I am. How I respond to them does.

Gladwell disagrees. He says circumstances are largely to blame (or credit) for who I am.

Never has a book engendered such a reaction from me to make me review it. I don’t review books. I use them to change who I am, or discard them as interesting (entertaining, but not transformational) or not interesting. I loved Gladwell’s Tipping Point and use it regularly in my work and life.

But Outliers is not just “interesting”. For those who choose to embrace it, it could be a transformational compendium of victimology that gives excuse after excuse for not choosing to live a life of significance.

If it was by an obscure author it could be ignored. But because Gladwell has laid such a great foundational reputation with his other works, people have bought into this without critiquing it. Many people loved it and recommended it to me, which is how I read all my books. I was very disappointed by what I read. I hope you are, too.

Which 90/10 Rule Do You Live By?
My belief is that 90% of life is what you make happen and 10% is what happens to you. And you have two possible responses to the 10%: 1) Fascinating! How’d that happen? Let’s make lemonade! and 2) I’m a victim of my circumstances, background, legacy, great grandmother, the Duke of Wellington, Atilla the Hun or some outside dark force that rules over me.

Gladwell apparently believes 90% of life is what happens to you and 10% is what you make happen. And for the 90% that happens to you, he subscribes to ONLY response #2 – you’re a victim. Poor babies. You should lay down and die. Give up. It’s understandable. You had an ancestor 300 years ago that made a bad decision or was unlucky, or you were living in poverty, and you’re never going to live it down.

And if you’re successful, Gladwell says you also didn’t have nearly as much to do with it as you think. It’s luck, circumstance, legacy, the Duke of Wellington, Attila the Hun and a thousand other things outside you that nearly pushed you unwillingly over the edge of success. You nearly had no choice but to live the life of Riley.

I say CHOICE is 90% of the formula for success. Gladwell says CIRCUMSTANCE is…50%? 90%?. I say a difficult background makes you even more successful if you CHOOSE to respond to it well. You’ll be stronger than most. Gladwell says hardship makes it very unlikely you can succeed – it’s almost not your choice at all. In Gladwell’s world, hardship and a lousy background aren’t sources of fertile ground for building a unique and wonderfully powerfully story for you. They’re something to get over, if you can. Good luck with that.

Lies, Damnable Lies, and Statistics
Disraeli said there are three kinds of lies: “Lies, damnable lies, and statistics.” Here are some of Gladwells:

1) He cites Roseto, PA as “proof” that where you are FROM has more to do with success (health, lower crime, suicide, etc.) than your choices. Then he ignores the research that shows the reason the town was so healthy was exactly because of their 1) choice to live in close knit relationships, 2) choice to be spiritual, 3) choice to live by fundamentally sound values, 4) choice to respect elders, etc. Even the town they came FROM in Italy and others from that town that didn’t CHOOSE to live like the Rosetans didn’t have the same health and crime. The Rosetan’s CHOICES made them who they were, not where they are from.

2) He cites Canadian Junior Hockey stats showing 40% of the 10 yr. old all-stars were born Jan-Mar, 30% April-June, and only 10% Oct.-Dec. The age cutoff is Jan 1 so those kids born early in the year are playing against younger kids and get chosen to go through to the all-stars, even though they’re not better, just older (therefore appear better when chosen as all-stars). He wants a separate league for the poor babies born June-Dec. Get over it.

I won the city batting championship three years in a row in Pony League w/ a left-handed batting average of .555 and an on-base % of .695. I could draw a walk as easy as getting a hit. As the youngest and smallest tenth grader at high school baseball tryouts I was cut without swinging a bat. The uninformed coach lined us up by height and cut the bottom five in the first five minutes of practice. He was looking for football players for the fall. I was easily the fastest center fielder and the best hitter there (and a prized left-hander), and when I filled out to 6’ 1″+ a few years later it turned out I might have been a pro prospect. Wah, wah, wah. Life is not fair. Michael Jordan was cut from ninth grade basketball. He CHOSE to not give up. I CHOSE to give up and do something else. It’s about choice.

Apparently pro hockey players agree. The 40% born in Jan-Mar in kid hockey is reduced to 31% in the pros, and the 10% Oct-Dec. is doubled to 20%, just five percentage points below “fair”. An awful lot of those poor babies who didn’t make the All Star teams first time around CHOSE to not give up. Life isn’t fair, nor should it be. We would lose all our drive to succeed. Gladwell didn’t show us the pro stats. Because they demonstrate that circumstances don’t make me who I am. How I respond, does. Choice.

3) To debunk the ridiculously over-worked role of talent, Gladwell says it takes 10,000 hours to succeed – that at the highest level, work is more important than talent. I couldn’t agree more, except that having correctly correlated success more with hard work (choice) than with talent, this debunks most of the rest of his victimology as well. I have a choice to succeed. Working my tail off is the biggest part of that, and that is a choice.

4) He also correctly debunks the role of “genius” by showing many smart people don’t make it. I couldn’t agree more, but the reason isn’t because of their background. It’s because of their choices. He actually gives the smartest man in the world a pass for giving up on getting published because his background obviously was too difficult to over come. Poor baby. It took me 19 years to finish college, but I’ve started and run seven businesses. I’m not smart, I’m just relentless. Choice.

Gladwell goes on to talk in the same terms about legacy, heritage, deep ties to people you never met in the old country a hundred years ago that allow you to live a life of significance or keep you from experiencing it. But he gives almost no time to the most important characteristics of success: personal vision, personal choice, and personal commitment to get there no matter what. Burn the bridges, sink the ships, shred the parachutes, I’m all in. This is nothing more than background noise in the book, which he only recognizes as an annoying fact but not as the source of success.

My best lesson from all of college came from one of the Women’s Studies Courses I took. The female professor asked the one other guy in the 200 person class to come up front, gave him a toy gun and told him to hold her up. At first it was comical, but she kept belittling him and instructing him until he held the gun to her head and screamed at her, “Give me your f-ing money or I’ll blow your f-ing head off!” She congratulated him for eventually becoming convincing, and asked him to sit down.

Then she asked us a stunningly simple question, “At what point did I become a victim?” Her answer – “I never was.” And she said, “And at what point would I have become a victim? Only when I gave him control of my mind or he took control of me physically.”

She went on to say that the problem with victimology is that it gives us a pass from taking charge of our lives, and allows us to blame our circumstances for forming who we are. I never forgot that lesson from 30 years ago. Those who read Gladwell’s book should use it as a filter as they read.

As I road on the back of a motorcycle through the bush for 8 hrs in the middle of the rainy night, then spent 10 hrs with the Chief, and 10 hrs back last night without sleep (four flats, a blown gear box), my African friends on that trip were incredibly resilient. There wasn’t a victim among them. Together we plan to build a first world country on the backs of these incredible people. If they read Gladwell’s book and embrace it, they don’t have a chance.

Circumstances don’t make me who I am. How I respond to them, does.

Don’t be a victim. Chose to live a life of significance. It’s 90% choice and 10% what happens to you (and you have a choice how to respond to that 10%).

Choice.

264 banks on the wall, 264 banks…I’ll…

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Relentless beats smart all day long.

Banks blow chunks when it comes to small business support. Everybody knows it (including the bankers). But every once in a while one of them has an entrepreneurial spasm and supports a great idea. It just might be yours. But only if you’re relentless.

John McCormack, author of my favorite “motivational” book – Self-made in America, went to 265 banks trying to get a loan to open a hair salon in a mall in the 1970s – an unheard of proposition then. No bank was biting.

He called his wife after the 265th and told her he was going to open a Tex Mex restaurant because the banks were all offering him money for that. She told him go ahead, but reminded him that Walt Disney had gone to 302 banks before the 303rd gave him money for his ridiculous idea to open an amusement park in the suburbs of Los Angeles.

John decided he would keep trying until he went through 302 banks before opening a Tex Mex. The next day the 266th bank gave him the money. He now owns many locations and makes $200k+ a year in profit from each one.

In 1989, John wrote this in “Self-Made in America” about banks:

Bankers are by nature conservative bean-counters, and entrepreneurs are, by definition risk-taking bean-planters. I’ll make my point simply: can you point out a banker or a bookkeeper who has ever started anything on his or her own – other than trouble?”

Banks in this country are bureaucratically stacked against the entrepreneur or the original thinker, and our country’s economy is paying dearly for it. Bankers love to write checks to companies with track records, because they don’t do any work to do it, but as we can well document many of those “safe loans” made in the last decade have been nothing short of foolhardy. To this day, I worry more about my bank going broke than I do about myself going broke.

That’s a guy who, 23 years ago might as well have been talking about the banks of the last five years. Nothing has changed.

I am not a victim
So how did John McCormack respond to this well-known fact? He kept going. He was relentless. He didn’t let this keep him from reaching his dreams. John knew what I say all the time:

Circumstances don’t make me who I am. How I respond to them, does.

90% of life is what I make happen. 10% is what happens to me. Are you a victim of the banks, or a victor who will find the one bank who is having an entrepreneurial spasm and will work with you?

Relentless
What made McCormack keep going? In his own words:

It wasn’t brains, brawn or even our business plan that resulted in our ultimate success. It was persistence, pure and simple.

I call it being relentless, a form of conation. I’m not smart, I’m just relentless. You don’t have to be smart, just relentless.

Keep hunting. A good idea will ALWAYS get money if you need it, even if it takes you being relentless. And if your idea can be proved without big money, even better. Prove it first, then go get the money. Either way, relentless beats smart every day.

Just keep counting banks, you might end up with a better story than Disney or McCormack. If you get to the 304th bank before you get your loan, write a book about it!

Consistency, Consistency, Consistency

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Practice, Practice, Practice.

Most business owners don’t practice their craft, they just perform it. It’s one of the biggest reasons their business never develops into something bigger than themselves.

Cal Ripken performed in a record 2,632 consecutive baseball games. But he didn’t just perform. He dissected the strike zone into a number of smaller zones and practiced hitting pitches in each micro-zone to figure out which ones he could hit and which ones he should just hope the ump called a ball instead. He practiced at levels most people don’t bother.

I chatted with Yo Yo Ma, the greatest cello player of our time, backstage a few years ago. I asked him in front of my daughter, an aspiring cello player, “How do you become a great cello player?” He replied without hesitation, “It’s not enough to practice. You have to learn to love to practice and to practice every day as if you were on stage at Carnegie Hall.” Yo Yo Ma loves to practice, not just perform.

Theo Bikel first played Tevye in Fiddler on the Roof in 1967. He is now 87 years old and still works full time in many roles. He has played Tevye now over 2,000 times in 45 years.

In the 30th anniversary Broadway tour revival of Fiddler I was playing clarinet/sax in the pit orchestra when they came through Denver. For a week I listened to Bikel’s incredible rendition of Tevye (couldn’t see from the pit, only hear). By the fifth or sixth performance I could nearly repeat his rhythmic interpretation of each line, the rising, falling, the long pause here and there. He became incredibly predictable.

Every performance was the same, but the amazing part was that every performance was magical. Theo Bikel was not winging it and was not just performing. He had practiced this part and dissected it over and over again to discover the highest interpretation, then he did something few business owners (or actors) would ever do – he stuck with what worked and never varied from it.

Practice, then be consistent
I’ve never heard a more consistently repeated performance, or a better one. Theo Bikel had learned two things:

1) Practice, and lots of it, is the only way to become better. Performing is not how you become better.
2) Stick with what works. Don’t mess with success.

Learn to love to practice
Most business owners will never have a chance to stick with what works. They’ve never practiced enough to find out what truly works and what truly puts them on top of their game. They’re too busy winging it.

And even when they find something that works, most business owners will abandon it long before it has stopped working. Why? Because THEY are bored!

Learn to love consistency
They hate practicing and get bored doing the same great performance over and over. They are willing to sacrifice the success of their business so they can keep performing with variety and never practicing to find the best way to do something. Remember, your customer, like each theater goer watching Theo Bikel, is experiencing you for the first time. They aren’t bored and you shouldn’t be either.

Practice to find your groove
A great golfer practices until they find the swing groove that works the best all the time, and they never vary from it. You could look at shadow figures of some of them and know who it is by their swing (like Jim Furyk). They practiced like crazy to find it, and then do it the same every time.

I went from a 20 handicap to a 1.9 by practicing like crazy. While I was doing that I played (performed) with a lot of golfers who had never been on a driving range or taken a lesson. They thought it was a nutty idea to practice a lot, almost beneath them, and prided themselves in hacking around, never practicing, always trying a new club, a different swing.

They’re still 20 handicaps and hide their incompetence by poking fun at people who practice. It’s not manly – real men don’t practice. They laughingly say, “Practice is a sign of insecurity.” Too many business owners feel the same way.

Want to be successful? Reach your tipping point? Have the business outgrow your own capabilities and become something that makes money while you’re on vacation? It won’t happen by performing.

The way to Carnegie Hall
The tourist leaned out his car window and asked the cop, “How do you get to Carnegie Hall?”

“Practice, practice, practice.”, was the answer the cop gave, as he waved they tourist through.

Repeatable, consistent performance is the key to a business outgrowing you and your own talents. And the only way to find what your business should do over time is to practice until you find it.

Variety is not the spice of business
Practice like crazy, learn the best way to do what you do, then do it that way every time. Variety is not the spice of life – it’s the road to mediocrity.

Silver bullet, anyone?
This blog post won’t likely get a lot of hits. There has to be a faster, easier silver bullet. The people who think that will still be 20 handicaps in their business 10 years from now, while those willing to practice hard will actually be enjoying themselves on the golf course while they’re business makes money without them.

New Year’s Resolutions Don’t Work

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But quiet resolve will.

The last New Year’s resolution I made was 20+ years ago, and it was to never make another New Year’s resolution. It’s the only one I’ve ever kept.

We do it every year. “I hereby resolve”… blah, blah, blah. A kept resolution is harder to find than a moose in Miami.

97% of people who decide to lose weight actually weigh more 12 months later. All other New Years “resolutions” have just about as much resolve behind them. Let’s change that.

How to actually change something.

1) Don’t “get motivated”. Don’t make resolutions at the end of a weekend motivational seminar.* Most of this stuff is emotion-based and has no lasting power. You’re either committed or you aren’t. I don’t get motivated to brush my teeth. I either do it or I don’t.

2) Run toward something, not away from something. People who want to lose weight rarely lose any. “I want to stop being fat.” That’s running away from being fat.

People who want to live a healthy long life are much more likely to not be fat. “I want to be able to…” That is running toward something.

The gravitational pull of what you are running away from will always suck you back in. Likewise, the gravitational pull of something you are running toward will release you from the pull behind you. You will get where you are going because you are actually going TO something, not AWAY from something. See my post “Get a Second Planet”:

3) Make decisions through the new lens. See yourself and/or your business the way you want it to be when you get there, not where it is, and make decisions AS IF YOU WERE ALREADY THERE.

In the book Shift by Peter Arnell, he tells how he went from being 406 lbs to a maintenance weight of 150 lbs. As soon as he decided to lose the weight, he began to see himself from that moment on as a 150lb. man, and EVERY DECISION HE MADE was as a 150lb. man. He even went out that week and fired some of his clients who he felt were the clients of a 406lb. man.

Don’t “hope” to get there. Peter didn’t wait until he was 150lbs. to begin to make decisions like a 150lb. man. That would be “hoping” to get there, and running away from being fat. The minute he made the decision he was already 150lbs. on the inside.

Be there already inside, and just bring the rest of your external world into alignment with the way you already view the world from inside. Sound like woo-woo crap? It’s not – it’s hard core success strategy, and it’s how every highly successful business person becomes so. They see something they want to make happen, they believe in their core that it is doable, and then they set about making every decision as if it has already happened.

The above three steps are all about intentionality vs. hope. Intention is the key because:

You get what you intend, not what you hope for.

New Year’s Resolutions are almost always too full of “hope”, which is emotion-based and needs a special day to get itself motivated to do anything. Real decisions are usually full of intention and don’t need a special day or audience to be walked out into the open.

BUT – I will say that whatever decision you make, on whatever day you make it, you should indeed declare it to the world and ask everyone around you to support you, not in getting there, but in already being there (please don’t feed me donuts if I’ve declared I’m 150lbs., and don’t entice me with 2 weeks in Cabo the day after I start my new business.)

Don’t get there. Be there. Then bring the outside world into alignment with that clear intention. Hoping, wishing, dreaming, and believing don’t add up to doing.

Go ahead. Make a decision ANY day of the year (including New Year’s Day). But much more importantly, see yourself, your business, and the world around you through the new lens, and make every decision going forward as if you were already there.

Where do you want to be in 2012? Tell the world here, be there inside today, and then let’s go do it on the outside the next 364 days.

Always release your product before it is ready.

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Movement, not Planning.

Want to be successful? Get your product or service out there now, not after you’ve refined it and made it good. The MBA programs are wrong. Get moving.

Facebook sucked when it first went live and changed almost daily.

Google was a bare bones search engine called BackRub in 1996 and was still simplistic when it became Google in September 1998.

The Denver “T-Rex” redo of the entire highway system was 25% completed and open for traffic before the design was even completed.

The only way to learn how to run a four-minute mile is to first run something much slower, in public.

To learn to ride a bike, first, fall off.

Committed Movement – It’s never how good your plan is that counts, but how committed you are to moving on the bad plan you’ve got.

Purposeful Direction – We don’t need to know HOW we’re getting to our objective, we just need to know what our objective is, and the next few steps in the right direction to get there. Purposeful Direction is not about having things figured out first, but simply knowing with utter clarity where you want to end up.

Committed Movement In a Purposeful Direction is more critical to success than anything else.

There is a fundamental lesson about life and business in the above statement, and how we take that lesson on board makes us either very successful, very average, or a real shipwreck.

Successful people understand that planning is like a rudder; it’s useless without movement. Highly successful people have a very clear, transformational understanding of the relationship between movement and the rudder.

If you get your relationship right between these two, it will transform your life and your business as well. If you don’t, you’ll stay grounded on your sandbar and wonder why your life never had the impact you’ve always known it can.

The idea of massive pre-planning before you start seems to be a very sound practice, but only in concept and in business school. The problem is it just doesn’t match up with the reality of what actually makes for a successful business.

In the last three years I have watched four different companies go through the whole focus group/product development/perfect rollout process that most MBA programs and books about success would tout as the right way to do things. They all failed. I’ve seen others become successful by just getting moving in a small way like Facebook, Google, eBay, the sticky note, the television, the car, the internet, the steam engine, and all parents, all of which had a better chance of success by releasing the product before it was ready then by perfecting it first.

A controlled experiment in the real world
The key is to do it with very few customers who love you and want to work with you to make it what it will someday become. Reality is a much better laboratory for business than the laboratory. Customers are a much better focus group than a focus group. And a small rollout to the faithful is much less expensive and more informative then the balloons and parade approach.

We went through many iterations of paid workshops and mastermind concepts for three and half years before we arrived at 3to5 Clubs, which are now spreading on four continents. But we did it in small groups where perfection wasn’t necessary and everyone of the faithful were served with our existing but under-developed product.

Speed, not Planning
Success is much more closely related to Speed of Execution than to in-depth planning, because most planning is done in a vacuum prior to actually producing anything. Only after the plan hits the real world do we find out that it doesn’t work in that real world.

In the face of that reality and all the evidence we have that massive pre-planning is a waste of time, we keep trying. We can’t help ourselves. Hope springs eternal. In the meantime the Facbooks, Googles, and T-Rexs of the world are in their boats running flat out and heading for open water while we’re still trying to decide how to build the rudder.

Man has yet to devise a great way to plan in the absence of movement. The painstaking detailed analysis we are all taught to do before we move is almost always of little value because it never works out the way we had hoped. And as a result it never saves us the time and money it was supposed to. Instead it usually costs us precious time getting started, puts us behind someone else who has decided to get moving, and creates soaring costs down the road.

Practice, not Perfection
Always roll out your product or service long before it is ready, before your website is done (we only had a holding page for the first 18+ months). Just do it in a controlled but very real and “live” environment where the feedback you get is from real live bullets – people deciding to pay with real money and giving you feedback on how to get better.

Get out of the lab and into the real world. Tom Watson, founder of IBM said, “Test fast. Fail Fast. Adjust Fast.” I would say get out into the real world and just keep practicing to get better all the time.

It’s never the process. It’s always the person.

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Committment, not a cool product.

McDonald’s legendary “process-driven” business model is touted in Michael Gerber’s book, the E-Myth, as the central thing you need to succeed – a system will get you off the treadmill. Problem – 21.4% of SBA-funded McD’s fail. Huh?

We’re fascinated by “secrets”, “amazing”, “nothing else like it”, “three easy steps”, and other cheap parlor tricks to make us believe something great will happen if we have a special product, process, idea, great market, etc. It doesn’t work that way.

One out of every five SBA-funded McDonald’s franchise fails. Processes are incredibly helpful and I encourage Process Mapping as a standard business practice (much different than the McD’s or E-Myth model). But plenty of businesses have great processes and fail.

We’re always looking for something outside ourselves to fix our business. We spend thousands on complex business plans, layers of systems and process manuals, and buying every new marketing gimmick coming down the pike in hopes of fixing our business. But we’re not going to move the needle with these things. I put them all in the same category as “shelf-help” books – it all helps your shelf look good.

I’ve had countless conversations with people about what makes for success or failure, and almost invariably people point to outside forces to explain both of them. But the keys to success aren’t out there, their in our heads and our hearts. If we want to lead, succeed, and make more money, we must be transformed. There is no short cut.

I wince when I see franchises and multi-level marketing companies selling business opportunities by claiming you’ll make more money with them then with the other guy because they have the better product, better commission structure, better marketing, better financing, cheaper entry point, better process, etc. Then they trot out a few highly successful people to prove their point.

The problem with this is that you could take those same few people and put them in just about any other business and I guarantee you they would be successful there, too. Why?

Because it’s never about the process, or the product; it’s always about the person. People who are successful get there because they are relentless, not clever.

I’ve seen people be successful with good or bad products, good or bad processes, good or bad financing, and good or bad marketing. People who are successful will find a way to be successful in any business. People who aren’t successful expend an awful lot of time looking for the secret sauce, that great product, the perfect situation or anything else they can find outside themselves to distract them from the fact that they should be living conatively (with Committed Movement in a Purposeful Direction), not cognitively.

The keys to success are inside of us, not out there in the world. Put on your big boy pants, face the music, and figure out what you need to do to get where you want to go. Then stop blaming the world around you for not providing you the secret sauce, and get after it.

Create your own success. Gradually. Then suddenly.

Thought leaders, aren’t.

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Thinking isn’t results.

Why would anyone want to be known as a “thought leader” – for thinking? Thinkers are rarely leaders, so why do we use that term to identify people we believe are leading? There is a better term.

I’m not against thinking, I’m against elevating it to the highest status and the object of our affection. It’s not the lead actor – it has a supporting role in getting results.

Thinking is really important in the process of doing. As I’m moving forward, if I’m not thinking about all the feedback I’m getting I will just run into brick wall after brick wall. But the objective of thinking should be to create a result – to transform something.

So it makes no sense to me to call people “thought leaders” as if they are actually creating change. To call someone a “thought leader” is to focus on the process instead of the result.

Why do we celebrate thinking over results? I believe it’s because cognition, or thinking, has gained an inappropriately high status in our culture. The academics have taught us to assume that thinking is the result, not just one step in the process of getting a result.

Is this just semantics? No – there is a significant difference.

A thought leader is someone who has an idea. A results leader is someone who has changed something.

Thought leaders are educational. Results leaders are transformational.

Results leaders make history. Thought leaders write about them later.

We don’t think our way to a new way of acting. We act our way to a new way of thinking.

It is the act of acting that changes us, not the act of thinking. Nobody learns to ride a bike by reading books.

Einstein also believed we have given cognition too much credit. He said “rational thought” is the “servant of intuition”, but that we have “created a society that worships the servant and has forgotten the gift.” Cognition is simply one of the servants of getting results, and as such we should be focused on the higher value of results, not on thinking.

Many people we identify as “thought leaders” are really “results leaders”. We need to give them their just recognition and relegate thinking back to it’s appropriate role as a SERVANT of the result, not the object of our affection.

Let’s celebrate and promote “results leaders”. Thinking isn’t all it’s cracked up to be.

What do you “think”?

The Conative Filter

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Stop Thinking: Conation, not Cognition.

Conation is one of the 1,000 most obscure English words and yet the most important business word you’ve never heard. Want to know if you’re doing well and going where you want? Filter everything through the word conation:

Conation – the will to succeed that manifests itself in single-minded pursuit of a goal.

Or my definition:

Committed Movement in a Purposeful Direction

It’s nuts that this word has been buried in the lexicon, but there was too much “doing” in it for the academics to feel comfortable, so they let the word drift into obscurity. These Thinker/Cognaters love cognition because it allows them to justify sitting around thinking things to death without taking any action. Conation is scary to them because it requires action and metrics of success, not just pontificating.

But if you bring Conation back into your life and business as your main filter, and use cognition as a faithful servant of your Conation, you’re going to be a lot more successful. Conation is way more important to your success than cognition.

The Conative Filter

  1. Commitment – Affection/Passion – are you sold out to what you’re doing? Willing to go down with the ship? Do you have “quiet resolve” to succeed no matter what? If not, your chances for success are low. Commitment, utter abandonment to the cause is the foundation of success.
  2. Movement – Activation – Doing – are you sitting around cognating (thinking) about what great things might happen if you ever did something? Or are you moving forward and figuring it out as you go? Doers get things done while Thinkers are thinking about doing something someday.
  3. Purpose – Cognition – Discipline/Plan – Do you have a plan for the highest and best use of your time (Yield per Hour)? Cognition is ONE of the things you need to be doing to be successful. It’s a faithful servant of conation.
  4. Direction – Vision – Just because you’re going flat out doesn’t mean you’re going the right direction. Do you have utter clarity about where you want to end up, exactly what it looks like, and when you want to be there? You get what you intend, not what you hope for.

Conation is all four, not just two or three. Direction, Purposeful, and Movement without Commitment will not sustain you. Commitment, Purpose, and Direction are useless without Movement. Movement, Commitment and Direction are of no value without Purpose (a plan to get there).

Want to know whether you’ll be successful, or why you’re not? Use the conative filter to see if you’ve got all four attributes going at once. If not, shore up the one that needs your attention. You’ll make more money in less time and make a bigger splash in the world around you.

People with committed movement in a purposeful direction make history. Cognating dreamers write about them later.

What Do You Want to Be Known For?

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An empowering vision.

What are you building with your business? Do you know? If not, it’s never too late to get this answer. Stop for a moment and get it, because every decision will fall from this one if you have it answered. People who try to make money rarely make very much of it. People who answer this question understand it is where significance begins.

We sometimes confuse what is good for us with what works for big business. We see Giant Corporation, Incorporated focused on return on investment (ROI) to it’s shareholders and think that we should do that. They are a lousy example of what you want to be known for. They have a legal responsibility to focus on making money, we don’t. And I can tell you that people who focus on something bigger than making money always make more of it.

What do you want to be known for?

And it’s even true with a very few Giant Corp. companies. As Raj Sisodia found in his book Firms of Endearment , 28 of the Fortune 500 have declared to their shareholders that they are about something bigger than making money – they want to be know for something else. You would think that might distract them from making money, but you would be wrong.

In his book Good to Great, Jim Collin’s identified 11 companies that beat the S&P 500 profit standard by at least 300%. Raj’s 28 Giant Corporations that focused instead on something bigger than making money do 1,072% better than the average S&P 500 company.

This relationship between focusing on something bigger than making money and actually making a lot is even more clear with small businesses. Why?

Making money is not an empowering vision.

People make money for two reasons:

1) Survival – survival is a very strong instinct. It is not surprising that most people make just enough money to pay their bills. And the only way that they can motivate themselves to make more is to constantly increase their lifestyle so they can ensure there is always more money going out than coming in. Staying in this Cycle of Poverty, even when you’re making millions, is a great way to ensure you will always be motivated only by survival.

I have a former client who lives that way. His house is beautiful and his cars are gorgeous, and he doesn’t sleep at night. He is in survival mode all the time. He bought the 80’s lie “He who dies with the most toys wins”, and is a hostage to his business and his lifestyle.

2)Significance – An empowering vision – People who see money as a means to an end that is bigger than the toys it can buy are much more likely to make a lot more of it.

You should have as the objective of your work to move from SURVIVAL right through SUCCESS (the imposter of toys) to SIGNIFICANCE.

What do you want to be known for?

I address this in Making Money Is Killing Your Business. Answer that question and you’re likely to get up tomorrow a lot more motivated regardless of the economic climate. And you’re likely to be a lot more successful because you have committed movement in a purposeful direction.

Get out of my way. I have somewhere I have to be.

It’s a lot more motivating than, “I made 6% more this year.”

What do you want to be known for?