Tonight I had the distinct pleasure of hosting four good friends for a panel on entrepreneurship in the MBA program at Weber State University. The entrepreneurs that joined me were:
Alan Hall — Read more about Alan here.
Kate Maloney — Read more about Kate here.
Jerry Ropelato — Read more about Jerry here.
Jeremy Hanks — Read more about Jeremy here.
Needless to say, these are four legit entrepreneurs who have built, or are building again, very large and profitable companies. I am also very lucky to call each one of them my friend. As they answered questions for 2 hours from the standing room only audience, I was intrigued by some of the similarities of their answers. In fact, their answers and comments were so good, I thought I’d write a blog post about it.
There were a few themes that seemed to emerge as well as some topics that they were particularly passionate about discussing. In no particular order, the following stood out to me:
1 – Risk
2 – Personality traits
3 – The “curse”
4 – Luck
5 – Investors
6 – Patents
There were a few questions and mentions of this by both the audience and our panel. Entrepreneurs certainly have to be comfortable with risk. So do their significant others. Having said that, entrepreneurs are not wild, risk taking fools. In fact, some studies indicate that entrepreneurs are risk averse. How is that possible? Because successful entrepreneurs are good at making decisions, often tough ones, with less than perfect or complete information. That is perceived as risky to those that require perfect and/or complete data before making a decision. This panel of successful entrepreneurs does a lot of homework on important decisions. Those that are less important require less study and thought. Either way, the panel indicated a strong bias towards action and decisiveness. They understand everything they can about a decision and then they hit the go button. Our panel (as well as myself) believed that not making a decision, or waiting too long, was almost always worse then taking a risk on imperfect information.
There were some personality traits described during the panel that helped our audience understand what kinds characteristics help or hurt your chances as an entrepreneur. Certainly there are other traits that matter to becoming a successful entrepreneur. These are ones that came out in the panel discussion, all of which I wholeheartedly agree with. Namely:
Help — tenacious, resilient, assertive, curious, willing to sacrifice, strong work ethic, desire to lead.
Hurt — indecisive, unwilling to work for low/no wages, require certainty, lack creativity, scared to sell.
Each member of the panel talked about how they see the world around them as problems with solutions they immediately come up with. As they travel, meet with people, or have their own customer experiences each of the panel members talked about how they cannot turn this part of their brain “off” (hence the “curse” description). While they were clearly joking about it being a negative thing, it was interesting to note that every panel member had dozens of other business ideas in their heads at this very moment. They cannot help but see solutions to problems they encounter.
I was glad to hear Jeremy Hanks bring this up. I too have felt that luck has played a big part of my entrepreneurial career. The other panelists agreed on a few key thoughts around the concept of luck. They are:
1 – Luck happens much more often if you work hard and put yourself in a position to increase your odds of being “lucky”. Jeremy noted it’s tough to be lucky if you spend all of your free time playing Xbox.
2 – Good luck often occurs when hard work meets opportunity. This is another way of saying take some risks, get out of your comfort zone, put in consistent extra hours — and magically (or not so much) you’ll get luckier.
3 – All panelists agreed that entrepreneurs who feel like it was all them, their hard work, their intellectual capacity (or even that of their teams and partners) were not giving luck its proper credit. All of us felt like we were extremely fortunate and that good luck contributed to some of our successes. There is nothing wrong with admitting that you got lucky here or there.
We all talked about this topic quite a bit. Getting an investment from a professional outside investor is extraordinarily difficult to do. Many studies suggest it is easier to get into Harvard or the NBA then it is to get investors to fund your business. I’d say the theme that came out of the discussion was the fact that investors are NOT going to fund you, so don’t spend your time thinking about it or working towards it. If you focus on your company, your product, and most importantly, your customers, your business will have a better chance of becoming profitable and successful. When those things happen, investors will be much more likely to take interest and then you can think about if outside capital makes sense or not. All four of our panelists started their current businesses without investors. Three of the four still have taken no outside capital and the fourth did a $33m round for an obvious leap at a very large market. As you can see, investors are neither likely nor necessary to your business, so get on with it.
I was a bit surprised at how much the panel spoke out against patents. Perhaps it is because some of the panelists had been sued by ridiculous patent trolls. All agreed that some physical products (like a medical device) made sense for a patent IF (and a big IF) the product was actually built (not just a theoretical drawing). We all agreed that the patent system is outdated and broken. You can draw up something that you MAY develop in the future, get a patent, and then sit and wait for someone else to actually build it. When they do, you sue them. I pretty sure the founders of the patent office didn’t mean for it to work out this way. Our panel told the audience to stay away from patent searches on software and Internet businesses because every single website is in violation of some ridiculous patent already.
All in all it was a terrific two hours. I hope to invite other entrepreneurs up to the University to do this again. Students need to have a balance of theory and practice in their learning. If you’d like to attend, let me know in the comments and I’ll be sure to let you know about the next event.