During the early part of the 20th century, New York City’s Tin Pan Alley district was the epicenter of American popular music. During its heyday, Tin Pan Alley musicians devised an inexpensive yet effective method to obtain free, expert advice – they played new songs to elderly doormen and solicited their opinions. If the doormen could hum or whistle the tune after hearing it once or twice, then it was deemed suitably catchy for publication. Ultimately, this simple marketing litmus test became known by the derisive term, the “Old Gray Whistle Test” (OGWT), as many of the doormen and other pro bono musical advisors used by Tin Pan Alley musicians had gray hair. The OGWT is an interesting historical anecdote, but what can modern-day entrepreneurs learn from elderly doormen and hackneyed musicians from nearly one hundred years ago?
“Fight or flight?” Nothing is more elemental to an organism’s survival than knowing when to run and when to defend itself. In which instances should a creature pick a battle and make a stand, and when should it retreat to fight another day? Entrepreneurs often face a similar quandary, with the added wrinkle that sometimes it makes more sense to “flirt” rather than run or fight. In fact, startups, given their limited ability to effectively fight or flee, often must play nice when threatened. As such, rather than deciding between “fight or flight,” the more appropriate question for an entrepreneur is, “When should I fight, flee or flirt?” As with most business dilemmas, there is no dogmatic response that can be uniformly applied to every situation. Each threatening instance must be evaluated in light of your resources, the criticality of the threat and the probability that you could: survive a fight, escape by flight, or establish an ally by flirting. Fortunately, there are two excellent books that address the yin and the yang of this fundamental issue: Sun Zi’s The Art of War and G. Richard Shell and Mario Moussa’s The Art of Woo.
What motivates busy people to make dangerous u-turns on busy streets to patronize a lemonade stand? Is it simply for the opportunity to sip overly sweet drinks made under questionable health conditions? Doubtful. The psychological rewards received from helping childhood entrepreneurs meet their financial goals more than offset any indigestion customers might suffer from consuming a child’s culinary delights. You would be well served to understand how to engender such exuberant consumer behavior.
In his book, The Map of Innovation, DoubleClick Co-founder Kevin O’Connor emphasizes the importance of describing your adVenture in clear and concise terms. When discussing his book, Mr. O’Connor often gives the audience a quiz similar to that shown below. Select the description below that describes an actual software product. A. Assimilated, zero-administration, standard database-queuing schema B. Open-architected, workforce-neutral, productivity assimilator C. Modularly reduced Graphical User Interface heuristic D. Profit-focused, fault-tolerant encoding interface If you can select the legitimate product from the list above, you are well on your way to buzz-cutting through the forest of buzzword BS.
Nair was developed during the 1970s as a hair-removal product for the emerging population of busy, professional women. Despite potential side effects such as itching, burning and scarring, Nair continues to help women effectively remove unwanted hair and leave their skin “smooth and shiny, with no nicks or cuts.” Ask any venture investor. They would love to slather their startup investments with Nair. Why? Because every deal has unwanted hair – one or more significant flaws which make the deal imperfect. Savvy entrepreneurs also understand this reality. As a result, they do everything within reason to reduce the hair on their adVenture before they seek investment capital.
Who is this character? Hint: It is not a mouse. The fact that you likely cannot name this creature confirms the reality that ideas are cheap. All too often, inexperienced entrepreneurs struggle with sharing their ideas with potential investors, Donors and others who might be in a position to help them. The next time you wonder if it is safe to share your ideas, recall the fate of this long-eared, anonymous cartoon character.
Agreements with Big Dumb Companies (BDCs) are like DC Comic’s evil villainess, Poison Ivy. Both are seductive and alluring and both are potentially fatal. As a startup, your most meaningful agreements will likely be struck with BDCs. You will no doubt craft agreements with companies of similar or even smaller size compared to your own, but the risk associated with such agreements will be tempered by the fact that you will negotiate such agreements as a relative peer. As such, your greatest risk and greatest opportunity will arise from the deals you cut with larger entities. Fortunately, it is possible to craft lucrative deals with BDCs that do not limit your adVenture’s ability to charter its own destiny. Just as Batman must avoid Poison Ivy’s kiss of death, so too must entrepreneurs avoid the Kiss of Death provisions which BDCs often attempt to include in their agreements.
Johnnie Cochran was an effective, albeit smarmy, defense lawyer who would say or do anything to defend his clients (anyone up for a glass of OJ?). He was a master at encouraging jurors to disregard facts and base their legal verdicts on emotions and conjecture. Yet, despite his exceptional courtroom theatrics, you would be foolhardy to hire good old Johnnie to review your software cross-licensing agreement. A startup-oriented lawyer may not be able to convince a jury of a guilty man’s innocence, but they can guide your adVenture through the menacing legal shoals it will no doubt face. Working with startup lawyers also minimizes the risk of losing control of your adVenture, as they can help you avoid common fundraising and investor pitfalls. Such attorneys can also add tremendous value in your negotiations with Big Dumb Companies (BDCs), as they can ensure that you focus on the deal points that are of most significance to a small entity. As such, a startup-oriented lawyer is a critical member of your extended adVenture team.
After patiently listening to a messenger deliver the Persian King Xerxes’s request for Sparta’s capitulation, the Spartan King Leonidas unceremoniously kicked the messenger down a well. Anger at receiving bad news is a natural human reaction. Sophocles, Shakespeare and the Bible all reference the killing of the bearer of bad news. When someone is critical of your adVenture, it is natural to dismiss the detractor and even demonize them to undercut the validity of their message. Fortunately for your competitors and detractors, you do not have a license to kill. However, as an entrepreneur, you do have a license to thrill. Every successful entrepreneur must eventually learn to delegate. An even more challenging skill is learning what to delegate. As noted in PR Passion, shaping your adVenture’s messaging is not something you should leave to others. Control your messaging by crafting it yourself and exciting your messengers to the point that they willingly deliver your company’s message on your behalf. Energize your messengers and encourage them to tell your story in a spirited, fervent and accurate manner.
As noted in Frugal Is As Frugal Does, it is unlikely you will be able to pay your startup employees market-rate compensation. So how can you recruit top talent while rationing your cash and equity ownership? The answer may lie within successful, yet cash-strapped organizations that lack the ability to grant their employees stock ownership, lucrative performance bonuses or other incentives often deployed by entrepreneurs. How are such organizations able to recruit and retain talented and motivated team members?