Tag Archives: myopia

“What Should I Work On Today?” A very entrepreneurial problem…

This piece is an excerpt from my Fulbright research with Prof. Thanos Papadimitriou of SDA Bocconi.  You can find out more about our research on our blog “chefsnotbakers.”

What if your company lacked a consistent process to decide which opportunities to follow and which fires to fight? What if you had no tangible feedback on customer satisfaction, design productivity, or market share? Even worse, what if you had no customers, products, or market share? No, it’s not a nightmare; it’s a typical early stage company.

“What should I work on today?” is a question that entrepreneurs ask themselves every day.

Rightfully so. The success or failure of rapidly growing but resource constrained businesses depends directly upon their founders’ ability to juggle a variety of diverse tasks. Paradoxically, because startups generally operate on the thinnest of margins, success or failure hinges on entrepreneurs’ ability to focus all of their effort on exactly the right issue, at the exactly right time. Only by catching fires early and extinguishing them as quickly as possible, can entrepreneurs carve out time to create real value.

Unfortunately for entrepreneurs, it is human nature to focus on the facets of the business with which we are most comfortable, even to our detriment. History is littered with failed startups that couldn’t see the forest for the trees. Salesmen bleed their company of resources by chasing inappropriate customers. Financiers produce spreadsheets that bear no resemblance to reality. Technical founders write code while the bank runs dry. Products are created with no customers, business plans go unrealized, and popular but profitless online services linger as the remnants of past founders’ myopia. To paraphrase novelist Henry M. Tomlinson, founders see things not as they are, but as they are themselves.

Insidious internal biases afflict techies, MBAs, first timers, and veterans alike. Take the failed startup Monitor110. Lead by brilliant technicians and Wall Street veterans, the startup’s ambitious plan to index of entire the dynamic web’s financial information made it one of the most anticipated new firms of its time. In mid-2005, despite willing customers and a working beta product, the firm opted not to release V1.0, choosing instead to explore newer and more powerful search technologies. The decision to pass up early market feedback proved fatal. As time passed, both internal and external expectations for the product soared. In response, the firm retreated inside of itself. Although the team was working harder than ever, fear of disappointing an eager market began to push the firm farther away from its customers. Without regular feedback, the firm’s product-market fit began to erode. By the time Monitor110 finally released v1.0 almost two years and three rounds of funding later, the gap between product and market had grown insurmountable. They had built a product no one wanted and there was no money left to build something new. Despite having all of the prerequisites for success—a rock star team, an innovative product, a massive market, and plenty funding—Monitor110 failed. Success is not only sourcing and building the critical pieces, but aligning them together in a sustainable way.

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New York City: Bring a plan

New York is a dangerous place for people without a plan.  I knew this, disregarded it, and got lost as was to be expected.

The City. People come here from all over the world to “make it big” in Art, Music, Money and more.  Twenty-four year olds and forty-two year olds alike work their asses off  in the City as managing directors, junior ad executives, or baristas/actors, all chasing different shades of the same brass ring.  Sweat and dreams,  failure and success, make New York feel like the center of universe as soon as you pop out of the subway.  I love it.

Problem is, that in the race for the rings, many of us run like rats in a maze, forgetting that simple pleasures such as having breakfast with our grandparents, climbing something tall, and seeing the sun for more than 30 minutes a day are even options.  Why?  Among other reasons, it’s much easier to prioritize one activity above all others when faced by the infinite possibilities the City offers us.  To do otherwise is to risk paralysis by analysis.

The collective tunnel vision of its residents makes NYC a particularly dangerous place to be without a plan. All of these driven people are likely to run you over if you don’t know where you are going.  Even if you are fleet footed, you’ll probably go mad trying to convince your peers to stop and smell the roses.  Even if you are nimble and stoic, you’ll still probably go broke.  Dodging, Processing, Surviving…  In NYC, treading water is exhausting.   It’s easier just to start swimming.  Many chose to do SOMETHING, ANYTHING, in order to feel like part of the club.

I feel that incredible pressure but continued to be paralyzed in the big light of the big city.  Should I get a Ph.D in business? Should I get a VC job? Should I take a stab at one of my 50 business ideas? Can I even do any of those things? After all, if this life is the only shot I’ve got, I don’t want to make any rash decisions.

That’s why I moved home to put a nail in this Fulbright project and to clear my head for the next chapter.  The respite has treated me well and I can honestly say I’m getting closer to making the right move. When it happens, it’s going to be big. I can’t wait to get back to the city.

Here’s a link to a Tim O’Reilly article that I find inspiring:
http://radar.oreilly.com/2009/01/work-on-stuff-that-matters-fir.html