More Like One Out of a Million

WRITTEN BY TYLER PROCHNOW, MANAGING PARTNER

How does entrepreneurship relate to Dumb and Dumber?  Tyler Prochnow, managing partner of Think Big Partners will tell you.  

Lloyd: What do you think the chances are of a guy like you and a girl like me... ending up together? 

Mary: Well, Lloyd, that's difficult to say. I mean, we don't really... 
Lloyd: Hit me with it! Just give it to me straight! I came a long way just to see you, Mary. The least you can do is level with me. What are my chances? 
Mary: Not good. 
Lloyd: You mean, not good like one out of a hundred? 
Mary: I'd say more like one out of a million. 
[pause] Lloyd: So you're telling me there's a chance... *YEAH!* 

I’m 45 years old and the father of two teenagers, one who just got his driver’s license, and feeling a little old these days.  Needless to say, as I start to take stock of my life, I’m beginning to wonder when I’m ever going to grow up.  I still love cartoons, the Three Stooges (the originals), and fart jokes.  So it shouldn’t come as any surprise that I sometimes find inspiration in the strangest of places.  Like the sage wisdom from Jim Carey in the movie Dumb & Dumber quoted above.

As a repeat entrepreneur (I hate the terms serial entrepreneur), I’m often asked what it takes to create a successful startup.  After running through the stock answers of great ideas, tireless efforts, sufficient capital and flawless execution, I sometimes shock my audience noting that I also believe a key ingredient is a delusional attitude.  I think Lloyd Christmas might have made an excellent entrepreneur (although his idea for starting a store selling worm farms needs a little work).  Not because he was smart, or willing to outwork his peers.  No.  Lloyd ignored the odds.

The most successful entrepreneurs I know are all like Lloyd in one key way.  When faced with the odds stacked against them, they simply push forward assuming they are the one.  If someone tells a founder that the odds of success are one in a million, the best startups assume that there are 999,999 other startups out there that are destined to fail.  These are the same delusional people (I’m one of them) that are honestly surprised when they don’t win the Powerball.

Don’t get me wrong.  Not having a clear grasp on reality is a major red flag.  You need to have a very fundamental understanding of your company, your product or service, your market and the fundamental business principals that are necessary for growth.  But when it comes to assessing your chances of success, as long as there is a one in a million shot, why shouldn’t you be the one?

When is the Best Not the Best?

WRITTEN BY TYLER PROCHNOW, SENIOR PARTNER AT THINK BIG PARTNERS


One of the biggest traps for entrepreneurs is the temptation to choose a partner, an employee, a vendor, a consultant, a lawyer or any other service provider, simply because that person/company is supposed to be the “best” in their particular field.  If we at Think Big had a nickel for every person who came through the door touting their team as having the best web designer, the best software engineer or the best sales director, we’d have a pretty big jar of nickels.  And while excellence is an extremely important factor in choosing one of the above mentioned providers, the question is not whether that individual/company is the “BEST”, but rather whether they are the “BEST FOR YOU”.

My standard stump speech on entrepreneurship always includes a few minutes on the importance of learning from one’s mistakes.  Not a day goes by that I don’t counsel someone on  how each mistake can make you and your business stronger if you are willing to embrace it.  And yet, just because one says it over and over does not mean that we don’t sometimes ignore our own advice.

A couple of years ago, I  pursued a new venture that had significant geographic spread.  The venture required the involvement of individuals in New York, Los Angeles, Phoenix, Atlanta and Kansas City.  Even though I am an attorney by trade and have been involved in hundreds of millions of dollars of complex transactions, this particular deal was beyond my area of expertise.  Trying to prove that I belonged with the big boys in all of these cities, I retained the services of an attorney who had a reputation for being the “best” in the city in handling this specific type of transaction.  It didn’t matter that I had not worked with this attorney before.  I was convinced that he was the right person for the job because he was deemed the “best” by others.

I won’t bore you with all of the ugly details, but hiring this attorney was a huge mistake.  In the middle of our transaction, my attorney decided that one of our potential business partners had a better chance at landing the deal and he kicked me to the curb in order to switch his representation to that person.  To this day, I’m still shocked by the way things transpired.  I don’t know whether it was an ethics violation, and I’m not interested in spending any time to find out.  Instead, I used that error in judgement on my part as a learning experience going forward.

Since that day, I have never hired a service provider or taken on a partner based solely on competence.  I now look for someone I know or trust above all else.  Someone who I know has my best interest at heart and will look to protect me when things get difficult.  And I must say this philosophy has paid significant dividends.  Any endeavor worth pursuing has its ups and downs.  There are always going to be those critical moments in the life cycle of a business when the easy thing to do is just throw up your hands and give up.  At those critical moments, it is extremely important to have a support structure around you that assists you through the difficult time.  Those are the people who are the BEST, because they are the best for you at that point and time.

Don’t misunderstand.  I’m not suggesting that ability and expertise are not extremely important.  Every vendor, consultant, provider, and/or partner that you retain has to be capable of getting the job done.  However, there is almost always more than one person who is capable of providing excellent service.  In the past few years, I have been very lucky to find both tremendously talented people who are also exceptional friends: my partner at Think Big, Herb Sih, my partner at Connexsus, Rusty Rahm, my attorneys, financial advisors, and others.  I go to sleep every night knowing that each of them is an outstanding business operator and a great friend who I trust to support my business and life ventures.

The bottom line is this: In most instances, there is more than one person/company capable of providing excellence.  Your challenge is to find that person who is both proficient and aligned with your interests.  They may be aligned personally, financially or philosophically, but your business will operate much better if you can match up at least one.

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Leaving Corporate America in the Rearview Mirror

WRITTEN BY TYLER PROCHNOW, SENIOR PARTNER AT THINK BIG PARTNERS

There was a time in this country when the prevailing model of a successful career constituted finding a job in corporate America and steadily moving up the ladder for a period of 30-40 years and ultimately retiring with a decent pension and a gold watch.  The ranks of some of our grandest corporate institutions are, to this day, filled with people that define success just that way.  Yet, as we move toward a more advanced technological society, the idea of spending an entire career with a single employer is becoming as rare as people without smartphones.  They are still there, but their numbers are dwindling every day.

Like my mother, who at age (censored) just got her first iPhone, it is never too late to embrace the future.  Even if you are one of those big company lifers, you can still escape from the bonds of the corporate grind and pursue the world of entrepreneurship.  In fact, now may be the best time ever to make the leap.

Given the difficult labor market, now might seem like a time to hold onto that job with both hands and a vice-like grip, but I would argue just the opposite.  Now is the time to let go.  With large companies cutting corporate benefits and the term “job security” just an antiquated notion, no one’s job is truly safe.  Virtually every big company employee is looking over their shoulder at who might be able to do their job for less money, and around the next corner wondering when their job may be outsourced or downsized.  Such prevailing paranoia creates an environment that is not particularly conducive to innovation and growth.  Today's corporate culture is one that discourages creative thinking and rewards a “make no mistakes” mentality.  I talk to so many corporate managers whose entire business strategy consists of keeping their heads down and not taking risks, lest those risks produce a negative result that makes it easy to put them on the inevitable chopping block.  Without taking risks, how is the company ever to move forward and create innovative products or services for their customers?

Despite some concerns about the bad habits that can be obtained in corporate America, I believe these employees have some advantages that may make them the perfect 2012 entrepreneur.  First and foremost, they know how corporate America works!  At some point, you are going to want your new venture to be able to sell to the big corporation.  Knowing just how those companies operate, who makes the ultimate purchasing decisions, and perhaps most importantly, how to ensure you get paid, are all critical elements for a fledgling entrepreneur.  Insider insight into these elements gives you a huge leg up on the competition.

Another advantage corporate escapees may have is an intimate knowledge of the problems inside their former employer.  The most successful startups solve a key problem for some segment of the population.  Often, that segment of the population is a large company.  Many new companies are founded on the premise of solving a perceived problem identified by an outsider looking in.  A former employee should have a clear understanding of the challenges facing their industry and an insider’s advantage on the most efficient way of solving those challenges.

Finally, while I don’t recommend it, and personally believe that it will hinder your chances at success, a corporate employee potentially has the advantage of having a safety net underneath them as they launch their venture.  The unemployed entrepreneur has the difficult task of launching a company and paying the bills at the same time.  Without either significant financing, a sizable savings, or a spouse/significant other that is earning enough, it is difficult for the startup entrepreneur to balance the monetary needs of the company with their personal monetary needs.  Having that paycheck makes this balance a little easier to achieve.

That being said, my personal recommendation is for the entrepreneur to cut the corporate cord completely before launching a business.  A startup venture almost always requires an all-in commitment and having one foot in the corporate camp is difficult.  Trying to straddle the chasm between a job and your new business can be a surefire recipe for failure.

So much attention is paid these days to the college dropouts who started a company in their dorm rooms.  And while those entrepreneurs are deserving of their success and the accolades that go with it, that is still a high risk group to bet on.  If I am looking for the best bet on the board, I’m looking for the startup spawned by a former mid-level corporate manager who knows his market and the solutions that market is demanding.

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Silicon Valley Knows a Secret: It's Okay to Fail!

WRITTEN BY TYLER PROCHNOW, CO-FOUNDER OF THINK BIG PARTNERS


Right or wrong, there is a perception in the entrepreneurial/startup space that when looking for a place to start a technology business, there is Silicon Valley and then the rest of the country.  There is a commonly held belief, that most, if not all of the innovative and disruptive technologies being developed today come from roughly 1,500 square miles of northern California.  Perhaps the biggest question from the rest of the country is “Why?”  Sure, the Valley has a number of built-in advantages, including (in no specific order (i) a concentration of incredible research institutions; (ii) a robust job market; (iii) a highly skilled labor force; (iv) a well-established capital community; and (v) a pretty decent climate.  But other cities have many of these elements as well.  So the questions remains:  What makes Silicon Valley the hub of innovation and more importantly, how can the startup environment that has been built there be replicated in other cities?

In my role with Think Big Partners, I am fortunate enough to meet almost daily with incredibly sharp, incredibly talented and incredibly motivated entrepreneurs who are sure they are on track for building the next big thing.  Their enthusiasm and commitment to their idea/business is inspiring and one of the best things about being a part of an organization like Think Big.  While most of the entrepreneurs and a majority of the meetings are here in the Heartland, we have developed a very solid strategic partnership with several key players in Silicon Valley.  As such, I have had reason to interact on a relatively steady basis with some of the power players in the Valley over the past eighteen months.  In that time, I’ve noticed one very important aspect of the culture in the Bay area that does not exist here in Kansas City or in any of the other cities we work in.  It’s an attitude that is born out of entrepreneurial activity and one that is difficult to develop on your own.  The key ingredient:  IT’S OKAY TO FAIL!!

No one likes to fail.  No one sets out to fail.  For most of us, we are taught at a very early age that failure is bad.  Failure in school, failure in relationships, failure in sports.  All of it is terrible and something to be ashamed of.  In Kansas City and the rest of the country, the vast majority of business failures quietly fade away and the founders are doomed to years of humiliation and rejection.  No one wants to associate with a failure.  Yet somehow, that early life lesson seems to be nonexistent in the Valley.  

Some of today’s most powerful business leaders in Silicon Valley have also been the stewards of some spectacular failures.  Perhaps the most revered and famous failure of all, Steve Jobs, set the stage for today’s acceptance.  When Jobs was in his first go-around with Apple, he was very publicly and unceremoniously dumped by the Board of Directors.  Very few people who were paying attention to the tech world at that time were unaware of the humiliation heaped upon Jobs when he was sent packing.  But according to Jobs, it was a blessing.  At a commencement speech at Stanford in 2005, Jobs said, “I didn't see it then, but it turned out that getting fired from Apple was the best thing that could have ever happened to me. The heaviness of being successful was replaced by the lightness of being a beginner again, less sure about everything. It freed me to enter one of the most creative periods of my life.”

Jerry Kaplan and GO Corp., Marc Andreessen and Loudcloud, Bill Coleman and DEST Systems--the list goes on and on. These entrepreneurs wear their failures like a badge of honor.   We’ve met with a number of VC groups in Silicon Valley who will not invest in entrepreneurs who have not failed at least once.  It is often repeated mantra that if four out of five of your startups don’t fail, you are not being bold enough.

Now let’s be clear about the concept.  Failure by itself is not a predictor of future success.  Thousands and thousands of entrepreneurs have failed because they didn’t understand their business, they didn’t understand their market and/or they were simply not capable of launching a business.  What appears to be pervasive in Silicon Valley is the attitude that it is only a failure if you don’t learn from it.  Many of these spectacular failures provided the necessary learning curve that was essential for the future successes achieved by such entrepreneurs. While discussing a very accomplished business , a well-respected Valley entrepreneur recently said to me, “During their startup phase, [the company] did everything wrong, but they didn’t do it wrong for very long.”  They learned from their failures and after many years of struggling to break even, they are now a publicly traded behemoth.

The most important aspect of all of these examples is that the entrepreneurs didn’t read failure as an indication of their inability to succeed.  It was what it was; a failure of that product or service, in that market, at that particular time in history.  These entrepreneurs did not fold up their tents and go home, but rather, took the lessons learned in their failure and applied them to become better in the next go-round.

This is clearly something that can’t change overnight.  The fear of failure is a deeply-rooted attitude and one that will take years to change in both individuals and communities.  But it is obviously something that can be changed.  The advantage Silicon Valley has is not geographic or climatic (and thus unable to be replicated).  It is in large part, attitudinal and capable of evolving.  If our institutions, government, business, media and family can all begin to understand that failure is not a dirty word, and can come to embrace the educational aspects of failure, then the rest of the world can begin the process of emulating the startup culture of Silicon Valley.

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