Beginner Business

The title of a post on Tom Peter’ blog caught my eye:

To Get Out of Bed. Or Not Get Out of Bed. That Is the Question.

This was one of the earliest business lessons I learned. When I was a university kid, I occasionally supplemented my two part-time jobs with odd jobs at $10/h with a local entrepreneur, doing low-level marketing tasks like passing out fliers. One day Mr. Entrepreneur calls up and says, “I’ve got a job for you, but I can only pay $8/h this time.” I told him I wasn’t interested. I could actually hear his smile on the other end of the phone.

“I see–you won’t get out of bed for less than $10/h, huh?”

That was it, in a nutshell. In that moment I understood BATNAs, BHAGs, and diminishing marginal returns in one intuitive leap. And I got a glimpse of what leadership is about.

The bottom line is asking yourself if what you do is REALLY worth getting out of bed for. What’s your time worth?

That’s a big part of leadership, and entrepreneurship is really just leadership taken to the extreme. Entrepreneurship comes from being driven to spend your time on important things.

That’s why time management for entrepreneurs is a little different from many jobniks. It’s not about seeing how many things you can cram into a day. It’s about deciding which things aren’t worth doing at all, and dropping them.

It’s about deciding what’s worth getting out of bed for, and what’s not.

One of the reasons that startups are often able to innovate in ways that larger companies can’t, is because they can cut a smaller feedback loop.  Large companies often take too long from noticing a problem to fixing it.  And part of the problem is that when five people are using your software and they notice a bug, you just fix it.  But when the latest version is used by millions of people, it’s more complicated.  Which missing features matter most?  Which bugs?  And what new problems will come from the bug fix?  The biggest problem, though, is that giants move slowly.

The key to improvement in anything–sports, public speaking–is feedback.  Feedback is even more important than knowing HOW to improve.  Why? Because if you know how to improve but have no feedback, you’ll never know how close you’re getting.  But with good feedback, you can simply try things at random until you start seeing an improvement.

That’s basically the biggest advantage a new company has, which is why great entrepreneurs always seem to be trying something new.  A large supermarket takes time to collect data on how customers react to a reorganization of the aisles, but the owner of a grocery store can just watch the customers coming in.  Where do they look?  What do they pick up?  What do they buy?  And who buys what?

Since small businesses can iterate so much more quickly, it makes sense to spend more time just doing it than thinking about it.  Your mistakes just don’t cost as much as they would cost the big boys.  And chances are that if you’re small, you’re probably able to maintain a better relationship with your customers, who are likely to forgive your mistake today because they can see it will be fixed tomorrow.

So just do it, get feedback, make changes, and do it again: iteration.

(Inspired by this post about iteration and software development.