entrepreneurship

I was flipping through this month’s (May 2010) Inc. when I came across the a “How I Did It” article about Bob Moore, founder, owner, operator of Bob’s Red Mill Natural Foods (they supply whole grain flours to health food stores). He grew the business into a $70 million/year company, and at the age of 81 has decided to institute an employee stock ownership plan (ESOP) and sell the company to his employees. By all accounts the man is amazing, an example for us all as we attempt to build a business.

Moore says at one point in the article

When you’re in business, there are two doors you can walk through. You can walk through the door where you treat the customer like your guest, operating by the rule that the customer is always right. Or you can be cutthroat. The first door is the door of kindness. That’s the one I decided to walk through.

“The customer is always right” is a business saw that’s as old as the hills, but is the customer always right? I think it’s more true in certain businesses than in others.

If a customer buys a steak in a restaurant, and says it’s no good, they are right. If a customer comes into a dry cleaner and says the shirt is badly pressed, they are right. What, however, if the customer wants to pour money into Yellow Pages advertisements? What about the customer who wants to build a pure Flash site, or the customer who wants to use his 14 year old nephew “to do social media,” are they right? (perhaps I should be nervous about that last one, kids today are pretty good)

As marketing pros, people who are paid for our expertise, there are assuredly times when the customer is not right. We will try to dissuade them from doing things that we don’t think are best for their business, and lay out the reasons why — though this can often-times proves tricky. We don’t always reach a consensus. Because this is a service industry, we will, ultimately, do what the client wants. It does not mean, however, that the client is right. Like Bob Moore we eschew the cut-throat approach. We strive to treat customers like guests. In a service industry though there is a thin line between serving your customer well, and throwing their money down the tubes in order to do what they want because they are the customer.

Unspecified Danger

Throughout my career I’ve always said that I dealt well with ambiguity. As a long-time freelancer I had to. I never knew what situation I’d actually be entering until I did so, and once in, I had to deal with whatever arose. We’re now in the midst of starting our own company in a fairly bleak (at least on the surface) economic landscape and pursuing and winning work of all sorts. Some have called us (my wife/partner and me) crazy but we both wholeheartedly disagree. While it’s certainly not easy to do what we’re doing — throw three kids under the age of 6 into the mix and it gets even more complicated — we are having fun and actually feel more in control of our situation than we ever did while working in someone else’s organization.

I bring this topic up because it’s something that has been popping up frequently over the past few weeks — in both conversations and the things that I’m reading. Just after starting exUrban, Inc. I was speaking with a very talented front end developer with whom I worked and who was laid off just after the new year. We were speaking about a job I was pitching, and I wanted to gauge his interest and pick his brain about the required level of effort. He was interested but felt very strongly that he must get back to a full time job for the stability factor. I asked him how the stability of our previous employer had worked out for him.

Other folks have said similar things to me: “I like freelancing, but I can’t handle the risk.” “Starting my own company scares me, it’s so risky.” “I hate invoicing . . . ” (really?). Recently, I had two conversations within three days that went similarly. One friend told me that he doesn’t know how people start their own thing. He’s an agency guy and likes to be on the inside where it’s less risky. Another friend, an academic, said “I don’t know how you do it” (start a company and all that comes with it). Then he explained how he gets funding for his projects and it dawned on him that he and I are both striving to fund our livelihoods.

There is certainly risk in what we are attempting to do but we mitigate it through hustle. We take every meeting, pitch everything that comes our way and conjure ways to succeed. If I can’t close a sale that’s my issue, but I’m moving to the next opportunity to try again. If I’m in an agency and some other guy doesn’t close a sale I lose my job because the funding will dry up. Where is the risk more pronounced — trapped in a box canyon or running free on the plains?

We, as entrepreneurs, and freelancers deal with ambiguity: is the job going to come through, is it not, what happens if it doesn’t, what happens if it does? Ambiguity abounds in each of these scenarios but I’ve got other pokers, in other fires, and odds are that some of these other things will heat up and come through. An interview with Jim Collins from the April 1, 2009 issue of Inc. magazine brought all of this home to us.

How do you define entrepreneurship?

I take a broad view of it. The traditional definition — founding an entity designed to make money — is too narrow for me. I see entrepreneurship as more of a life concept. We all make choices about how we live our lives. You can take a paint-by-numbers approach, or you can start with a blank canvas. When you paint by numbers, the end result is guaranteed. You know what it’s going to be, and it might be good, but it will never be a masterpiece. Starting with a blank canvas is the only way to get a masterpiece, but you could also blow up. So, are you going to pick the paint-by-numbers kit or the blank canvas? That’s a life question, not a business question.

It has to do with your ability to handle risk, no?

Not risk. Ambiguity. People confuse the two. My students used to come to me at Stanford and say, “I’d really like to do something on my own, but I’m just not ready to take that much risk. So I took the job with IBM.” And I would say, “You’re not ready for risk? What’s the first thing you learn about investing? Never put all your eggs in one basket. You’ve just put all your eggs in one basket that is held by somebody else.” As an entrepreneur, you know what the risks are. You see them. You understand them. You manage them. If you join someone else’s company, you may not know those risks, and not because they don’t exist. You just can’t see them, and so you can’t manage them. That’s a much more exposed position than the entrepreneur faces. But there’s lower ambiguity on the paint-by-numbers path: very clear but more risky. The entrepreneurial path: very ambiguous but less risk. Of course, the truth is that it’s all ambiguous, anyway. If you think you can predict the future, you’re crazy.

This quote has been our lodestar over these past weeks because it crystallized and validated what we’d been thinking all along. We’ve opted for the “life concept” of entrepreneurship and embrace the ambiguity. Within ambiguity lies opportunity, and that’s all one can ask for.