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Are you ever approached by people wanting your advice on how to start a business? They see you running a successful company and think, “Wow, I’d like to do that.”
Their only stumbling block is that they don’t have an “idea” for a business. They refer to an idea like it’s this mythical creature that comes along every thousand years. They mix up the role of inventor with that of entrepreneur. They spend months thinking about starting a business but never get around to pulling the trigger. They blame their inaction on their lack of an idea.
Yet the idea is the easy part.
Before Jeff Bezos & Co. blew up traditional distribution channels, there was some value in being the local “guy” or “gal.” Being the local product retailer was a good business, and being a regional distributor of a popular line could make you a mint.
Those days are almost over.
Survey a group of founders about the personality traits that made them successful, and they will be quick to use words like determination, sacrifice, and hard work. Others will show more humility and chalk their success up to personality traits like curiosity. Still, others will credit dumb luck.
However, I believe there is another personality trait that many of the most successful founders have in common…
Try this thought experiment: Divide your employees into two groups. The first group is made up of your rule followers. These are the employees who will do what you say, follow your processes, and generally behave the way you ask them to.
The second group is your scoundrels. These are the creative spirits who are difficult to tame—the superstar salesperson who refuses to follow your sales process or the designer who insists on doing it their way.
Turning a service business into a product or software company can be tempting. While a typical consulting company may trade at a modest multiple of EBITDA, a fast-growing software company with sticky subscribers could sell at a double-digit multiple of revenue.
The difference is hard to ignore.
Basketball coach Don Meyer is famous for something he calls “The Foxhole Test.” He encourages players to imagine themselves in a life-or-death battle and asks them to pick the teammates they would want in the trenches with them. The test is designed to break down the inevitable cliques and friendships that evolve on a team and identify the true leaders that players trust with their lives.
Foxhole leaders are often known for getting in the trenches with their teams. They typically lead by example and never delegate a task they are unwilling to do themselves. As a result, Foxhole Leadership produces disciples willing to do just about anything for their leader.
In the real estate business, agents refer to a home that has been renovated recently as “turnkey.” A buyer can turn the key on the front door and start enjoying the home immediately. Equally, a turnkey house is one that can be rented out without much fuss, making it a valuable asset to the real estate investor.
The Swiss are known to value their independence. They don’t use the Euro currency despite their location, sandwiched between France and Germany, and they never officially picked sides in the World Wars for fear of tying their wagon too closely to one geopolitical regime over the other. That’s why we give the name The Switzerland […]
How well does your company run when you don’t show up for work? The answer to this question has a significant impact on the value of your business. Suppose your company could survive your absence for a while. In that case, you will score well on something we refer to as “Hub & Spoke,” one […]
What’s your number?
You know the one.
It’s the amount of money you would have to be offered to sell your business. It can be tempting to imagine selling for an outlandish sum, but is that amount necessary for you to consider your exit a win?