Take the Entrepreneurship Quiz

I've often marveled at some of the stereotypes around entrepreneurship and starting businesses. For instance, failure rates are tremendously overstated in most people's minds (kind of like the old college urban myth...take a look to your left, now to your right, only one of the three of you will be here four years from now). Also, a lot of entrepreneurs would benefit from a better grasp on the likelihood that somebody else is going to fund your business (it's low -- as the quiz point out, your savings is the most likely funding source to sustain you in the early years, and entrepreneurs rely heavily on plain old vanilla debt). Anyway, I don't want to give too much of this quiz away, but the one thing that surprised me is the percentage of businesses lasting five years that are home-based.

In case you are wondering, I scored 45%. You can link to the quiz by clicking on the title to this post or going here: http://yalepress.yale.edu/yupbooks/entrepreneurshipquiz.asp

Danny fights business plans, wins

When doing a vanity search, I came across a comment I made on business plans on a listserve a couple of years ago. Since it was basically ignored (blame the listserve), I figured I would repost with slight edits (that reflect at least a year of personal growth, or embittered snarkiness...)

With about a decade of experience in business advisory roles, and having reviewed tons of business plans, I have come to the conclusion that most of them are worthless exercises. Most people approach this task like homework in high school, emphasizing form over function, in this case, throw in the nausiatingly obligatory pie-in-the-sky market assessments and hockey stick revenue projections.

I never was much of a hockey fan. Nor am I a big fan of the written (or static) business plan, especially for small businesses, because misexecution often betrays the benefit. Rather, it's more important to be thinking strategically and continually about the market you are competing in and your place in it.

Simple questions.

Like...are people willing to pay for my goods and services? Am I attacking a unique niche? Is attack really the best verb for that sentence? Is what I am offering more valuable than what already exists in this market?

This is a dynamic process by nature - the market is constantly adapting, and the worst thing you can do is "finish your homework" and forget about it.

In case you were wondering (and you probably weren't), my "business plan" as a lawyer never consisted of more than a few motley principles. First, focus on a small number of narrow niche areas and get really good at them (it's best if you settle on one, provided it's big enough to support you). Second, don't even think about niches that you don't enjoy. Third, repeatedly ask your customers what they hate about your competitors or the market in general and basically do the opposite.

If you do those things, presto...you have a business. Now don't ever try to be all things to all people. Rather than fawning over anyone who walks in the door waiving money, I identify my most profitable and "pleasurable" clients and try to get more work from them; I also actively pursue similar businesses to these existing successful relationships, with the emphasis always overtly on "relationship building", because few businesses thrive on new customers (repeated ones, silly).

So, you have my permission to skip out on that business plan. Instead, reward yourself with a nap and a milkshake. Or a crepe perhaps. Just focus on the "process" and you'll be no worse off.

There are only a few truly important factors that will determine whether you succeed or fail in any business and you should always be reassessing whether you are focusing enough on them, rather than wasting your time on secondary projects that have no impact. Now drink that milkshake.

Biznik exists so networking doesn't have to suck, and if you like things that don't suck you really should start paying attention.

A lot of small business owners, including myself, have always viewed networking as an inherently unpleasant but necessary evil. Until recently, I thought networking would never be more pleasurable than eating cauliflower or those trips to the dentist when I was 14 and had to get my braces tightened. If fun is the equator, networking exists on a tundra somewhere where the polar bears are hungry and they aren't as cute as you had hoped.

My opinion about networking began to change almost two years ago when a friend introduced me to two edgy and very non-corporate Seattlites who wanted to start a networking group "that doesn't suck". I got involved with their idea near the beginning, as my instincts were strong that they had conceptualized something that filled a fast-growing but totally ignored market niche -- business support (both economic and moral) for left-leaning business owners and professionals who strive to be part of the burgeoning "free agent nation". Hell, you don't really have to be left-leaning (I'm pretty moderate myself) - anyone who has ever gone through a corny "what's your favorite color" exercise can appreciate what Biznik has to offer. Biznik is just a little less formal and a lot less saccharine than most networking groups. Show up to events, be yourself, find appropriate resources, build your business.

Anyway, the point of this post isn't to exalt one of my clients, but rather to point out some exciting developments that may be of interest to my other clients and modest readership. Namely, Biznik 2.o, the next version of Biznik, is about to be released and is leaps and bounds more useful than the first incarnation of the site. I have seen the various mock ups and am convinced that it will be a revolutionary tool in the arsenal of aspirational independent businesses, and you best hop on the bandwagon early!

Also, if you live in Seattle and have your own business, you shouldn't miss the first annual BizJam event on June 9, a day long business building event with a very impressive roster of speakers.

I was always excited about Biznik, but it was a nervous excitement. The founders did not have a lot of experience growing businesses and I know from my own experience that a lot of great ideas die on the vine when they started by folks who haven't been there before, but Dan and Lara have assembled a great team and have weathered a lot of unpredictability and change. At times I had my doubts, but now the business looks to have a very bright future and I am giddy! It is very professionally rewarding to see a client like Biznik grow from a petulant and unpredictable toddler to a strapping and vigorous adolescent, and I am pretty sure that this adolescent isn't going to die a fiery death from a few too many PBRs before the prom.

So if you have read this far, are entrepreneurial and have not signed up for Biznik and Bizjam, may you suffer a painful death of a thousand BNI meetings, where you can make idle and phony chatter over $100 donuts at 6 AM before being asked to make referrals to people you don't believe in.

PS I only wrote this because Biznik has been virtually ignored by the mainstream media so far, despite vigorous growth for two years. Biznik depends upon people like me to give you the straight scoop on just how helpful and revolutionary it is...and by the way, there is nothing petulant about Dan and Lara. They are two of the nicest people and most accessible entrepreneurs I have ever met; it's pretty hard to root against them.

Sound and Fury, Part 2

I had an 8 AM consultation this morning with an entrepreneur and prospective client; a good prospect, as far as I was concerned. Notwithstanding the fact that a late riser like me should never schedule a meeting this early, I arrived right on time to find nobody waiting for me. By 8:10, I was having hallucinations of little dancing shot glasses of espresso, and no longer willing or able to hold off purchasing my morning latte, I decided to give Mr. Consultation a call.

After brief formalities, Mr. Consultation mumbled an apology, said he forgot about the consultation, and then confessed that he meant to cancel. He also mentioned that his understanding was that this was a free consultation.

After pointing out that my consultations are not free (partial translation: my time is valuable, and you need to respect it), a few attempts to understand my prospective client's point of view resulted in a bit more mumbling in response, until finally I felt the need to get some definitive clarification. "Do you mean you meant to cancel and just forgot OR did you think it was OK just not to show up (because you thought it was a free consultation)?"

"Ummm....I thought it was OK not to show up".

Wrong answer. "I think you need to find another lawyer."

And "another lawyer", whoever you are, I hope you have enough self-respect to also send the Mr. Consultations of the world along their merry way if they treat you and your time similarly. The relationship between lawyer and client needs to be based on mutual respect. With it, great things are possible. Without it, I don't care if you are waiving thousands of dollars in my face, I don't want to work with you.

Just so you know, I actually have a sweet and gentle disposition for the most part...just not before my morning latte!

PS To my clients that respect my time and ability (which is the vast majority of you), I want you to know that I appreciate it, and some of my happiest moments in life are when I see you and your businesses succeed.

Sound (Of the Phone Ringing) and Fury...

Proving the point that a few people actually read this thing, I get questions about my blog from time to time (including a flurry of comments based on my last post). A couple of these seem to repeat themselves so I don't mind addressing 'em...

1) If this is an intellectual property law blog, why don't you write about new wrinkles in intellectual property law, recent case decisions, etc. like other lawyers who blog?

The thing about the internet is that switching costs are low. That's businessschoolspeak for the following proposition: if somebody is already doing something really well on the internet, there is no point is attempting an inferior version of that something when it's so easy for internet eyeballs to wander with one magic click of a figurative mouse. Unfortunately for me, intellectual property blogs were some of the first blogs and are still some of the best in existence, and very few angles go unexplored in the intellectual property blawgosphere. For example, I could "competently" write about TTAB decisions but Boston Trademark Attorney John Welch already has a fantastic blog that catalogues and comments on that niche.

Some days I dream about having a more substantive blog like that of my friend and fellow Seattle attorney Venkat Balasubramani* (these dreams usually occur after he badgers me about the topics in my blog), but most days I would simply prefer to use my blog as an outlet for my ideas that have no other easy outlet, no matter what the drift of these ideas. Of course, I do express my opinion on cases and stuff from time to time, you just have to pay attention!

2) Are you really as handsome as your picture?

Actually, nobody ever asks me that question, but I have an engagement ring handily waiting in my desk drawer for the first woman who does.

3) Isn't the fact that you "admit" to not answering the phone at odds with your mission statement and your supposed focus on client service?

I have received a few flattering comments since my last post, which I can sum up as follows :"Danny, your customer service is amazing and may be the greatest differentiator between you and other attorneys, and my experience is that you do usually answer the phone". That's great that you think I provide great service, YET I still don't mind admitting that one of my top priorities of my law practice is reducing unnecessary phone calls, which I think is entirely consistent with great service.

If you have some time to kill between bouts of navel gazing, you might want to check out the Mission Statement, which I wrote immediately upon starting my practice a few years back.

Of particular note are these two lines...

If retained to represent you (or your business), I promise to:

Return phone calls and other correspondence promptly.

Report on client matters regularly and effectively.

I like to think I stick doggedly to those statements today. Cameron Stracher recently wrote a great article in the Wall Street Journal echoing these sentiments that crossed the mind of a young Danny Bronski, but much more articulately...

"One of the biggest problems with the current state of legal education is its emphasis on books rather than people. By reading about the law rather than engaging in it, students end up with the misperception that lawyers spend most of their time debating the niceties of the Rule Against Perpetuities rather than sorting out the messy, somewhat anarchic version of the truth that judges and courts care about. When they graduate, young lawyers rarely know how to interview clients, advocate for their positions, negotiate a settlement or perform any number of other tasks that lawyers do every day. In short, they are woefully unprepared to be lawyers, despite the outrageous hourly fees charged for their services. By giving students the false idea that being a lawyer is all about intellectual debate, we also drive the wrong students to law school in the first place. The hordes of English majors who fill our classes might think twice if they knew that economics and mathematics -- with their emphasis on problem-solving -- are the best preparation for a career in law. Flowery prose is seldom valued by an overburdened judiciary."

While that paragraph is enough to stoke a dozen other blog posts, the thread I want to pull from it is that all lawyers (and not just young ones) could use a healthy dose of common sense emphasis on people and customer services skills. I have these skills, always did, my clients appreciate them, and answering the phone every time it rings (or otherwise failing to discourage clients from making unnecessary phone calls) does not undermine them. Answering the phone does not equal good customer service and please reread my prior post more carefully before preaching to me that it does!

Of course, circling back to my first point about why I blog, Stracher once had another pithy insight that I want to share...

“Without a clear narrative thread,” commented Stracher while musing about the curious prevalence of lawyer blogs, “a blog is simply sound and fury, signifying nothing but misplaced ambition.”

Touche.

* Venkat writes an innovative blog covering the law as it relates to spam (check it out at www.SpamNotes.com).