February 26, 2007 at 11:19Why unprofessional entrepreneurs come out of professionals
In life, more happens than the naked brain sees.
* * *
A week ago, I, in the company of two smartest people, participated in negotiations on the development of one interesting and promising service. For myself, from these negotiations I deduced several conflicting truths. The first was the truth that ideas and resources (people, money) are only part of what you need to take off.
Trap of lack of experience
Developing a concept for three motley resources in parallel, I see and feel the “injustice” of the position of a new person very well - even finding an idea and money, you can lose people and not achieve anything just because you lack experience. You do not have all the knowledge, but it is you who have to make decisions.
Paradox: if I am trying to hire someone or to be included in the project as a partner to take advantage of his experience, a professional may prefer me to more experienced companies, even if their conditions are somewhat less attractive. No experience means that you need to gain it, but to get experience, you already need a certain level. Vicious circle.
Experience is what venture companies invest in startups if they understand at least something in the topic they are taking on. Yes, often a venture fund only needs a business plan and the intuition of a project selection manager to buy a stake in a promising project and eliminate it. But this venture capital process is not just about simple resources. Venture invests management decisions and builds business processes within the nascent company. Yes, it often happens that other people’s business processes kill the startup’s creative energy, but rarely can anyone survive without understanding and experience.
Sinker practice
This was the second truth: that is why there are fewer venture capital companies than the rest - the “out of ten survives one” model is not universal not because the market cannot stand it, but because people cannot stand it: professionals do not like to risk precisely because see both risks and obstacles. They know how to do it. And therefore good entrepreneurs are rarely obtained from them, unless it is a shot from a rare category of revolutionaries.
Experience as an investment is tightly connected with the experience of the sinker, pulling down if you create something new, or just your own, and not go on the beaten track.
The rule of gradualness
The third truth is more from the practice of negotiations, the elementary truth about the inner comfort of a negotiator. In order for you to be calm, in your realthe proposal should be more than you give in the form of a formal proposal.
In other words, if you are building a dam for a hydroelectric power station, then a good proposal consists not only of justification, a package of documents and approvals, but also includes a calculation of the long-term environmental impact, and, in addition, a forecast of social consequences and prospects for the development of industry and transport in region. You cook it, but don’t show it right away, instead giving it out in portions so as not to surprise and confuse the customer. Gradually, gradually. In ideal conditions, the customer becomes the implementer of the designer’s plans - your plans, because even before the real work of erecting the foundation began five years ago, and three years ago the first turbine generators were put under load, you already figured out what would be here in fifteen years.
This is what distinguishes a perfectionist designer who puts more detail into the project than is requested in the order. This is what characterizes a professional. And this is what bury most of the projects, preventing them from starting.
* * *
With whoever you negotiate, whoever is on your team during such discussions, try to ensure that no one is aware of all your trump cards and handouts. This leaves freedom for maneuver, and you will always have the last chance - to give something that will allow the customer or contractor to understand that he received more than he expected. Underpromise, overdeliver. It is too rare to succeed, value and create such opportunities.
* * *
Be silent.
Discussion in the magazine: About experience as an investment-and-anchor, and about aces in the sleeve .
* * *
A week ago, I, in the company of two smartest people, participated in negotiations on the development of one interesting and promising service. For myself, from these negotiations I deduced several conflicting truths. The first was the truth that ideas and resources (people, money) are only part of what you need to take off.
Trap of lack of experience
Developing a concept for three motley resources in parallel, I see and feel the “injustice” of the position of a new person very well - even finding an idea and money, you can lose people and not achieve anything just because you lack experience. You do not have all the knowledge, but it is you who have to make decisions.
Paradox: if I am trying to hire someone or to be included in the project as a partner to take advantage of his experience, a professional may prefer me to more experienced companies, even if their conditions are somewhat less attractive. No experience means that you need to gain it, but to get experience, you already need a certain level. Vicious circle.
Experience is what venture companies invest in startups if they understand at least something in the topic they are taking on. Yes, often a venture fund only needs a business plan and the intuition of a project selection manager to buy a stake in a promising project and eliminate it. But this venture capital process is not just about simple resources. Venture invests management decisions and builds business processes within the nascent company. Yes, it often happens that other people’s business processes kill the startup’s creative energy, but rarely can anyone survive without understanding and experience.
Sinker practice
This was the second truth: that is why there are fewer venture capital companies than the rest - the “out of ten survives one” model is not universal not because the market cannot stand it, but because people cannot stand it: professionals do not like to risk precisely because see both risks and obstacles. They know how to do it. And therefore good entrepreneurs are rarely obtained from them, unless it is a shot from a rare category of revolutionaries.
Experience as an investment is tightly connected with the experience of the sinker, pulling down if you create something new, or just your own, and not go on the beaten track.
The rule of gradualness
The third truth is more from the practice of negotiations, the elementary truth about the inner comfort of a negotiator. In order for you to be calm, in your realthe proposal should be more than you give in the form of a formal proposal.
In other words, if you are building a dam for a hydroelectric power station, then a good proposal consists not only of justification, a package of documents and approvals, but also includes a calculation of the long-term environmental impact, and, in addition, a forecast of social consequences and prospects for the development of industry and transport in region. You cook it, but don’t show it right away, instead giving it out in portions so as not to surprise and confuse the customer. Gradually, gradually. In ideal conditions, the customer becomes the implementer of the designer’s plans - your plans, because even before the real work of erecting the foundation began five years ago, and three years ago the first turbine generators were put under load, you already figured out what would be here in fifteen years.
This is what distinguishes a perfectionist designer who puts more detail into the project than is requested in the order. This is what characterizes a professional. And this is what bury most of the projects, preventing them from starting.
* * *
With whoever you negotiate, whoever is on your team during such discussions, try to ensure that no one is aware of all your trump cards and handouts. This leaves freedom for maneuver, and you will always have the last chance - to give something that will allow the customer or contractor to understand that he received more than he expected. Underpromise, overdeliver. It is too rare to succeed, value and create such opportunities.
* * *
Be silent.
Discussion in the magazine: About experience as an investment-and-anchor, and about aces in the sleeve .