Instigator Blog

Dharmesh Shaw over at OnStartups relates some interesting points about startup success from a paper titled “Skill vs. Luck in Entrepreneurship and Venture Capital: Evidence From Serial Entrepreneurs” by Paul Gompers, Anna Kovner, Josh Lerner and David Scharfstein from Harvard.

You can access the full paper online here.

Having never started a business that received VC funding, most of these points don’t apply to me (yet!) - although I find them all extremely interesting.

The one that does stand out is this:

Failure Increases Chances Of Success: Entrepreneurs who succeeded in a prior venture have a 30% chance of succeeding in their next venture. First-time entrepreneurs only have an 18% chance of succeeding. Interestingly, those that have previously failed have a 20% chance of succeeding.

So, it seems that you’re better off having started a company and having failed — then not having started one at all. If you’re considering kicking off a startup, it seems that you should just go ahead and do it (even if you’re going to fail). Getting the first failure out of the way (assuming you learn what you should from it) will increase your chances the second time around.

Obviously most first-time ventures fail. That 20% chance number doesn’t look too hot. Heck, the 30% number doesn’t look too hot either! But the point is that you shouldn’t be too afraid of failure when starting a business. The odds are already against you, so don’t panic and overwhelm yourself with dread. Do your best to make it a success and if it fails, learn as much as you possibly can from that.

And at first you don’t succeed…we all know how that goes!

No. They’re not worthless. (Talk about getting to the point quickly eh?)

If ideas were worthless, entrepreneurs wouldn’t exist. And that doesn’t make much sense to me, at all.

Entrepreneurs by their very nature, take ideas and turn them into reality. They’re opportunity-seekers, coming up with ideas, validating them, and then turning them into businesses. Even those ideas that don’t go anywhere from a business perspective are still valuable to an entrepreneur. They’re at the very core of what an entrepreneur does.

How can ideas be worthless when every innovation, success story and product you love came from an idea?

Click to continue →

I should have mentioned this earlier, but I’ll be attending BarCamp Montreal on Saturday, October 21st. I’ve actually volunteered to help out, which should be interesting and fun.

What is BarCamp?

Taken from the site: BarCamp is an ad-hoc gathering born from the desire for people to share and learn in an open environment. It is an intense event with discussions, demos, and interaction from attendees.

BarCamps are being held all over the globe…

The Montreal event should be a blast — there’s a bunch of great people going and I hope to meet up with all of them.

Oh, and they’re still looking for sponsors, if anyone’s interested in helping out with a few bucks…

Recently I was rushing home to pick up my son from daycare. I was a touch late but luckily I’m only 15 minutes away by car, assuming there’s no traffic. Hopping into my car I realized that I was nearly out of gas. I was running on fumes.

Five blocks from my office there’s a gas station. As I approached it these thoughts ran through my head (although I don’t recall actual bullet points!):

• “I’m really low on gas.”
• “There’s a gas station right there.”
• “Hhhm…doesn’t look like there’s an open pump.”
• “I’m already late.”
• “If I stop I’ll be even later. That’s not good.”
• “I can make it.”
• “As long as the traffic’s not too bad.”

Guess who got stuck in snarly traffic?

So there I was, sitting bumper to bumper, praying that I wouldn’t run out of gas and that I’d make it home before the daycare provider locked my son out on the front stoop to wait for his idiotic father. And a thought came to me, “I should have just gotten some stupid gas.”

The gas would have provided me with some security, even if I would have been 10 minutes late. Now I was willing the car home. Getting gas was the less risky path; even if it meant missing my absolute objective.

I realized by not getting the gas I was basically cutting corners. I didn’t want to miss my deadline, but I also couldn’t be bothered to wait for a pump, get out, fill up the car, pay and move on. So I cut a corner and moved on, hoping it would work out…actually, believing it would work out, not just hoping. There’s some hubris for you!

Entrepreneurs take risks all the time. It’s just part of running a business. There’s almost no such thing as a business that runs with no risk. So entrepreneurs are aware of, and often comfortable with taking risks.

But cutting corners is a different story.

Cutting corners is doing things less than your best to achieve some end goal. It’s usually not a good idea. It may feel like you’re making progress by cutting corners, but at the end of the day you’re not. You’re not building up enough value in your business, for the long haul, when you start to cut corners.

It’s important to recognize the differences between legitimate risks and cutting corners. Risks need to be assessed on a number of factors: probability, impact, reward. Risks need to be clearly identified so that they can be managed and treated. Cutting a corner is a form of risk, but it’s a silly one to take. More often than not if you really assess the significance of the risk and reward of cutting a corner, you’d realize it’s not worth it.

Incidentally, I did manage to pick up my son. The traffic delayed me less than I thought it would and visions of being stuck on the highway shrugging endlessly at angry motorists drifted out of my head. Let’s hope I’ve learned my lesson…(which is: “I can get home on almost no gas!” Right? Um, no…how about, “Don’t be a putz.” Right. Got it. Let me work on that…)

[tags]cutting corners, risks, taking risks, risk management, running out of gas, entrepreneurship[/tags]

Over at Tell Ten Friends, Jordan is writing a 7-part series on great copywriting for the web.

He’s written 3 parts to the series so far, including:

1. Great Web Copy is All About You
2. Great Web Copy Part 2: Call to Action
3. Great Web Copy Part 3: Skip the Jargon

If you write any web copy, or plan to, I’d follow Jordan’s series carefully.

The one thing that really caught my eye was a link to FutureNowInc.com’s We We Monitor. It measures how much you’re talking about yourself versus how much you’re talking about customers on a web page. I’m guessing it looks for specific “customer-centric” words and compares those to the ones you put in for your own company name, people, etc. That’s super cool! and I’m intrigued to see what kinds of results it generates.

Generally speaking, I really like blog series, where you write a group of posts on one topic, walking the audience through each point step-by-step without making any one blog post too long. I’ve done it a few times and it’s a fun way of focusing your writing and creating more stickiness on your blog.

Thanks for the on-going series, Jordan!