This advice is simple. To be successful in business keep your customer happy, your employees happy, have enough money for your plans and make sure everyone does their best work.
When I was walking home last night, I was reflecting on this conversation and I thought this is the best advice I have ever given to an entrepreneur, because it is really simple, and I think its actually useful advice. In fact I can’t think of anything else that is more important than these 4 points.
I thought about it some more, and the interesting thing about this 4 point list, is that none of the ideas have much to do with the actual entrepreneur. If you had asked me for 4 points for business success 3 or 4 years ago, I would have probably said something like “the idea”, “the market opportunity”, etc…
The problem with most entrepreneurs that I have met is that they have very big egos (myself included). A lot of research has been done and there is definitely a correlation between entrepreneurs and having overweighted egos. The reason is quite simple. Business is very difficult, working in a company is stable and provides you with a lot of comfort. For a lot of people working for the government is a very appealing job. You get a lot of holidays, in general you don’t have to work much overtime, the salaries are above average, and there is a lot of job security. As an entrepreneur the odds of you succeeding are probably only 10% to 30%, you will have to use your own money for this 10% to 30% chance to succeed, and you will most certainly work overtime, weekends and holidays.
In general only one type of person will choose the latter life of an entrepreneur. Someone with an ego. An entrepreneur assumes that despite the odds, despite the sacrifices, that they are more intelligent and that their ideas are better than any other entrepreneur, so they will ultimately succeed. Without that confidence / ego, its almost impossible to imagine someone wanting to get involved in business.
Of course the negative manifestation of ego is an over concentration on your needs, your ideas, and your vision. Although your ideas and vision are important, what is much more important is whether your customer’s share your ideas and vision. Too many entrepreneurs fall in love with their ideas, and completely forget that the only thing that matters is whether the customer loves their idea.
Entrepreneurs also forget that their employees need to love their idea and vision, and need to completely accept the vision. If you can’t get them to accept and understand the vision, you will fail.
Again because of ego, entrepreneurs always assume that their ideas will work and underestimate cash flow. They assume that customers will accept their ideas in 3 months when in reality it might take 2 years and several iterations. The problem is that they plan for only 3 months of cash, and end up failing because of over optimism.
The fourth point of always demanding the best work, I actually think integrates quite well with having a healthy ego. Having a healthy ego gives you the confidence to define what “good work” is, and to push people to achieve that. If you constantly strive to be the best, then you really have a good chance to succeed. However, I intentionally put this as the fourth point, because to really be the best you have to get feedback from your customers (make your customer happy), and get the support of your staff (keep your employees happy).
I’m curious, can anyone think of another point that should replace one of these 4 points to be successful in business?