A Friday series exploring Startups and the people who make them go. Read all If the Shoe Fits posts here.

A post on Medium from Alexis Tryon considers something that many entrepreneurs face, i.e., if your company fails are you a failure, too? She puts it like this.

If Alex = Artsicle
& Artsicle = Failure
then Alex = Failure

I saw this happen decades ago during every downturn and each resulting layoff. It happened to many people at Enron and other corporate debacles.

Not just to founders/executives/managers, but to workers at all levels.

And I spent enough time coaching, encouraging and working with them that I coined a term for it.

I called it ego-merge.

I’ve written about it several times, how to avoid it in 2010, not making your company or position your identity (which is what Alexis did), along with a way to combat it in 2013.

As bad as ego-merge is for “regular” people, it is much worse for entrepreneurs.

That said, they also have a psychological advantage in dealing with it, since if they didn’t have more-than-normal grit to start with they wouldn’t have become entrepreneurs in the first place.

Also, real failure isn’t about getting knocked down.

It’s only real if you don’t get up.

Hat tip to CB Insights for pointing me to Alexis’ post.)

Image credit: HikingArtist

A Friday series exploring Startups and the people who make them go. Read all If the Shoe Fits posts here

It’s a know fact that the more you are “teacher’s pet” or a “favored player” the more you will be called on in class and the more playing time you’ll get.

Even in families, the most-favored-child typically succeeds more than their siblings.

So it should come as no great shock that when VCs invest in similar companies, which they often do, they will favor one above the other.

And that favoritism usually results in more money, more introductions, more involvement, in fact, more everything, which results in substantially more innovation.

The data showed that companies tied to a competitor by at least one VC firm in common were indeed less innovative than those unencumbered by such ties; in fact, they were 30 percent less likely to introduce a new product in any given year.

It gets worse.

The UNfavored startups were 55 percent less likely to introduce a product.

Proximity mattered, too; those farther away from a shared investor were 56 percent less likely to introduce a new product.

What if your VC is part of the “golden circle?”

Companies tied to VCs in the top 25 percent of reputation indexes were significantly less likely to introduce new products in any given year.

Oops.

And I’m willing to bet similar stats apply to super angels, regular angels, incubators and the rest of the funding world.

Rory McDonald’s research is just one more reason not to be blinded by the money and to make sure your due diligence is super-diligent when evaluating funding offers.

Image credit: HikingArtist

“Brian” is an entrepreneur — an entrepreneur whose company just shut down after burning through $140K friends and family cash.

He burned through it as the result of a combination of overconfidence and ‘underdiscipline’.

It’s not the first time.

Nor the second.

His uncle, “Connor,” is a friend of mine and I asked why he keeps investing.

He said that he the ideas and plans sound solid and he does in depth due diligence, but something always happens.

Connor’s wife thinks Brian is a con artist.

Connor disagrees; he says there is a fundamental difference between the two.

“The difference between entrepreneurs and con artists is that entrepreneurs truly believe in the dreams they are selling — con artists are focused on the money.”

I told him so did pathological liars, who usually  exhibit above average verbal skills as opposed to performance abilities.

Which sounds exactly like Brian.

The takeaway is caveat emptor, whether the entrepreneur with the vision is family, friend, warm intro or cold.

Flickr image credit: Scott Akerman

KG Charles-Harris is once again attending the Lean Startup Conference and sharing his impressions and what he’s learning with you.

It was especially interesting to listen to Mikkel Svane’s talk about Zendesk’s story, because I had read a pre-publication copy of his book Startup Land.

The book was the basis of the talk, I found Mr. Svane to be enlightening, honest and real and all that carried over in his book.

Startup Land was an enjoyable read from a strong entrepreneur, with real stories about the struggle of starting, moving and growing a technology company. 

The fact that they started as entrepreneurs in Denmark and moved an embryonic company to the US only increased the complexity and challenges that the three founders had to traverse in making the company a success. 

Not only were the founders outside the normal Silicon Valley entrepreneurial eco-system, but they were also in a different country with little access to the information or thinking patterns common in the US.  It is a testament to the tenacity and determination, and even more so to the “hustling mentality” of the founders – they were willing to take significant risks and stay completely focused on two things — building a great product and getting immediate revenue on this product.

The author rightly credits the Scandinavian social system for their ability to take some of the risks that they were able to assume — they knew they would never end up on the street homeless, but could suffer a temporary reduction in living standards if they failed.  This is radically different than the case in the US and many other countries where startup failure can lead to destitution.

Regardless, the ingenuity and determination displayed during the process of bringing Zendesk from birth to maturity was an inspiration.  I’m a serial entrepreneur with international background myself, and I know how much effort is required to make that kind of move. 

The major challenge, however, comes with adjusting to the new mindset and culture in your host country.  Startup Land discusses this to some extent, but it would have been interesting to get some more insight about it.

Mr. Svane does a good job of synthesizing his experience into practical advice, summarized in special sections at the end of each chapter.  As such, the book can be a practical guide to such things as what to consider when hiring team members or how to think about particular aspects of the business. 

Also, some of the most interesting, and sometimes funny, parts of the book are found in how the three founders interacted based on their particular personalities and proclivities. 

Considering that founder dynamics is one of the most prevalent reasons for startup failure, this information  should be studied closely.  The difficulties and required tolerance for navigating these issues is core, especially the sensitivity required by the Founder/CEO.

In short, the book is well worth reading — it’s a quick and easy read with practical insights and a good dose of humor.

Entrepreneurs come in all forms, but most aren’t from the golden circle—right race, right gender, right families, right schools, right friends—although that’s who the media tends to focus on.

I don’t know what the actual breakdown is, but for convenience I’ll call it 10% golden circle and 90% the rest (probably not far off).

While the 90% are just as creative and talented as the 10% they usually have a very different entrepreneurial experience.

One that is far more difficult and fraught and, as a result, more often fails and with more catastrophic repercussions.

An article in The Economist takes an unbiased look at entrepreneurship in terms of the effort and cost, not just in money, but in physical and mental health, sans the magic of the golden circle.

I’ve known entrepreneurs from both groups and although the words used to describe the experience are similar the actuality is not.

It is one thing to work 80 hour weeks in a well-resourced environment with similarly-minded people and another to spend those 80 hours alone, using a café internet connection, living on ramen and peanut butter, with no support network or cheering section rooting for you.

Yes, people from the 90% succeed and some of the 10% fail.

The importance of the article is to debunk the stupid, inaccurate romanticism with which popular culture has imbued and colored the startup world and those who dwell there.

Flickr image credit: John Martinez Pavliga

KG sent me a link to a post in the WSJ by Jason Nazar, co-founder/CEO of Docstoc, which was just acquired by Intuit.

It should be mandatory reading for every budding entrepreneur.

Why?

Because it tells the other side of what’s involved building something with just a four million dollar investment.

The “other side” is about the long days (and nights), the stress and the negative effects on family and friends.

All the stuff that is rarely mentioned and when it is discussed it’s either glossed over and minimized or rationalize to the point that most entrepreneurs shrug it off.

KG understands this well, because he is traveling the same road.

And while you may not be able to ask Jason Nazar questions you can ask KG in the comments and he’ll respond.

A couple of weeks ago I linked to stories about great women entrepreneurs. Today we’ll look at the guys.

A contributor at Fortune created a list of what he considers the 12 greatest entrepreneurs of our time.

They are Steve Jobs, Bill Gates, Fred Smith, Jeff Bezos, Larry Page and Sergey Brin, Howard Schultz, Mark Zukerberg, John Mackey, Herb Kelleher, Narayana Murthy, Sam Walton, Muhammad Yunus

These founders created and then nurtured healthy, sustainable organizations that now have a combined market value of more than $1.7 trillion. They directly employ more than 3 million people…

Each of their companies sits at the nucleus of a thriving ecosystem that has cultivated and nurtured dozens if not hundreds of other enterprises.

There is a short profile of each at the link; considering it’s a kind of holiday weekend that’s enough reading.

Flickr image credit: pedroelcarvalho

Not all startups are Net startups, even when they do business via the Net.

Recently a client was faced with a dangerous situation well known to entrepreneurs who have enterprise startups or provide services (Net or real-world) and to most sales people; I’ve faced it myself in both roles.

“Lindy” is an entrepreneur and here is what she wrote me,

Good morning! So I finally reached out to my first customer via email and offered to arrange a telephone conversation discussing how their company can best use the platform to communicate with its managers (your advice!!!) – here is the response:

“Thanks for the note. We still intend to use this; however, workload has been exceptionally hectic so I have not had time to work with the site and get our staff involved.

Best intentions though!”

They have over 200,000 employees and it would be huuuge if it works out with them… Fingers crossed… Either way, great learning experience for me.

As you can see, “it” is the opportunity to land a giant account.

• For a salesperson it represents a sizable commission, tons of recognition and a possible promotion.
• For an entrepreneur it means money to move the company forward along with impressive validation that helps land more customers.

So what’s dangerous about it?

• The “egg syndrome” is dangerous to both salespeople and entrepreneurs. It happens when too much time and mental energy is spent thinking about it, strategizing what-if scenarios, daydreaming and waiting for the phone to ring or the email to appear. In short, the sale becomes an egg that is sat on, thought about, coddled and worried over to the point that nothing else gets done.
  The best way to avoid this is to first recognize and admit the symptoms—at least to yourself. Then lay out a battle plan, schedule a set amount of time weekly to follow-up or just day dream, then put it out of your mind and work on other projects/sales. It requires some self-discipline, but if you know what to do and when to do it then you don’t have to think about it and it is easier to focus on other things.
• The “swallow you whole” scenario belongs solely to entrepreneurs. In fact, it is an inherent part of being an entrepreneur and something that you continually face. Large clients require large inputs of effort and can end up utilizing all your time and resources leaving you with no ability to chase the next sale. This one has no easy answer.

Lindy is facing both; she runs her startup herself with certain functions being done by partner companies and the assistance of a few other professionals she knows, but right now it is mainly her. She said her productivity had dropped like a stone because she was “sitting on her egg.” She remedied that with a plan, a schedule and specific tasks to drive the sale forward; otherwise she is forcing herself to ignore it.

The harder decision entrepreneurs face is whether to even pursue that opportunity.

I faced one shortly after I started RampUp Solutions.

An employee met someone from Microsoft at a trade show and the result was an invitation to write for MSDN; the articles focused on hiring skills.

I thought it was a terrific opportunity to get known until I received a call from another Microsoft manager. He said he liked what he read was going to lobby to have me hired to coach MS managers.

That scared me silly; I had no resources, I couldn’t hire trainers, since my approach and philosophy were fairly unique at the time, so there was only me.

While I didn’t refuse, I also didn’t pursue it; with no active follow-up it died a natural death.

Did I make a mistake? Would I have landed the account? Could I have pulled it off?

There’s no way to know.

That is what Lindy is thinking her way through now.

What would you do?

Flickr image credit: Citizen Clark

This post is dedicated to all the entrepreneurs who believe that changing the world involves more than a new way to sell to consumers.

John Ericsson was a mind-boggling entrepreneur 150 years ago; one of the few modern entrepreneurs on the same level is Gary Cola.

Ericsson designed up the Monitor, the iron-clad vessel that helped win the Civil War, but doing so was a long way from smooth sailing.

Ericsson’s design was groundbreaking and some of its concepts are still in use today, such as the revolving turret for its cannon. Before the Monitor, he shopped his ideas around and was turned down by many “investors.”

He finally responded to a NYTimes ad from the Union Navy that ran for six days, “…for a two-masted ship “either of iron or of wood and iron combined,” with a delivery date for the plans of less than a month.

Ericsson met the deadline, but the reaction to his plans was as far from positive as you can get.

“Take the little thing home and worship it,” one board member said disdainfully, “as it would not be idolatry because it was made in the image of nothing in the heaven above or the earth below or the water under the earth.”

But that didn’t stop Ericsson, who looked for and found an evangelist in no less than President Lincoln.

To understand just how unique Ericsson’s vision was, consider this,

“What makes the Monitor so remarkable is that she’s almost a stealth vessel because all the systems except the ordnance are below the waterline. Keeping the engine safe from attack was a big breakthrough. Not only did Ericsson create this radically new type of vessel, but his designs were so nearly flawless that foundries and contractors from around the Northeast could fabricate the parts, and they all fit together when the ship was assembled in Greenpoint. It boggles the mind.” –Anna Holloway, curator at the Monitor Center.

The Monitor was built in just 118 days, was made almost entirely of iron and had an armored revolving turret that held two cannon.

I’ve talked with many entrepreneurs who get discouraged because their idea isn’t software, isn’t social and doesn’t involve the Net.

Yes, there may be scoffers; yes, it may be harder to get funded; yes, it may be difficult to hire, but that doesn’t mean you should stop—it can be done. And if (when?) you get discouraged read again the stories of Ericsson and Cola and take heart.

Which do you think will be remembered 150 years from now?

Image credit: Wikimedia Commons

No, Kim Kardashian does not figure in any way in this post. Actually, I’ve never seen her, know almost nothing about her and have no interest in changing that. But I am going to introduce you to some very cool people and their fashion-connected innovations.

But first, something for all those who were ever forced to change not only their job, but their entire career.

What if you had the coolest, most awesome job in the world and your company closed, eliminating your position? Worse, what if it was the only company in that business? What would you do?

Next up is David Barton, a five foot, five inch powerhouse who created and runs the coolest gyms on the planet. (If I’m wrong about that you can correct me in comments.)

Every wonder who profits from the millions of toys that are given away in cereal boxes and places like Carl’s Jr? Meet George Namkungm founder of Namkung Promotions Inc.; the same guy who traded in the plush lifestyle those toys gave him to create a way to feed lunch five days a week to 15,000 children.

Innovation can also be turned on ones-self. What kind of career would you create for yourself if you were a six foot tall fashionista? Image-maker, of course, which is exactly what Rachel Johnson did, only she styles celebrity athletes, instead of the glitterati.

Ever wondered what else clothes can do besides the obvious?

On the high tech side there is wearable there are clothes that act as sunscreen and “anti-odor” polo shirts.

On the low tech side is something far cooler. A mom who wanted to give her blind daughter access to the fun of cool slogans on tees found 3-D embroidery and connected with the right company. The result is Braille-A-Wear—check it out.

This final link doesn’t address entrepreneurs or innovation, but it does take a look at the flip-side of an age old fashion dilemma that every woman knows—and it’s hilarious. Enjoy!

Image credit:  MykReeve on flickr