Tuesday, May 22, 2007

One dollar, one hour

I caught myself humming the other day …

I’ve gotta dollar in my pocket and an hour to spend,
A tear in my beer and a relationship on the mend.
Thus concludes my country and western career, spanning all of a dozen seconds.

The latter part of my melodic malaise is irrelevant; the first verse warrants attention. Why?

Back in my incubator days, I talked a lot. To anyone, anywhere … show me a podium, fire up the projector, and off I went. One such occasion was a presentation to an MBA entrepreneurship course, taught by one of my old profs, Dr. Dorf. After skipping to and fro through incubator land with new economy/bschool vernacular in full gear (muttering far too many “tions,” including ideation, innovation, creation, diversification, risk mitigation, resource allocation, portfolio optimization) and showcasing our 150-step process to hatch ideas into ventures with wings, Q&A commenced. Good questions, if memory serves.

And then, a zinger from Dr. Dorf: Chris, if any of these ideas (we had six or so portfolio companies at the time) are so good, wouldn’t it be wise – given the high risk and your minimal resources – to invest all your time, energy and money in one company?

Makes sense now that I paraphrase his question; stymied, my reply was full of “tions” and reasons why our shotgun incubator approach would work.

Dr. Dorf was a sage then, and he’s even more wise now. Since incubators are an extreme case study, let’s focus on a single nascent venture.

Young companies and entrepreneurs lack – but require – focus. They complicate simple things, try to be everything to everyone, target too many markets (or take a horizontal approach), opportunistically develop multiple products prior to launching their first, and tackle what’s easy and reactive (versus proactively doing what’s important and oftentimes uncomfortable [e.g., sales, fundraising]). Established organizations have layers of lard at their disposal – they can survive sans focus. But, as Emerson expressed, concentration is the secret to strength.
I’ve gotta dollar in my pocket and an hour to spend.
I often pose (fortunately, do not sing!) this question to young companies. If you have one dollar to invest or one hour to spend, what should you do (not what do you want to do or what do you like to do)? Their answers are typically correct, but their actions do not follow suit. Great entrepreneurs and great companies concentrate chaos – the alchemy of startup company activity – into focused results. When they do, it’s musical.

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