This past week I attended a presentation “Beating the Odds: Characteristics of a Successful Business” by business teacher and author Keith Cunningham.
Here are some of the most interesting things I heard Cunningham say about the “6 big mistakes that people make in business.”
- An obsession with the product — to the exclusion of good business judgment. Entrepreneurs fall in love with the idea for their product and develop blinders as a result. As Cunningham described it: “Mothers love their babies, and entrepreneurs love their ideas.”
The key point Cunningham made: a great product does not necessarily equal money. It’s never what you do, it’s how you do it that will determine your success. And how you do it is about management. It’s not about the product.
- The need for speed. Speed creates short term perspectives. Cunningham described two categories of time: that which relates to a crisis and requires speed; and everything else. People often throw the wrong kind of time at a problem.
“Most entrepreneurs think that if they try to get 9 women pregnant, they can have a baby in one month,” Cunningham said. “It doesn’t work that way. It requires time.”
The faster you go, the greater the impact if things go wrong. If you’re going fast on a bicycle and you fall, you might skin your knee. If you’re going fast in an F16 fighter jet and you crash, people die! Taking the analogy further: two things are needed if you want to go fast, and people don’t often think of these: experience; and a lot of dials and instrumentation (like in the cockpit of an F16).
“All my problems started as a good idea,” Cunningham said. “At the core of all my problems lies instant gratifcation, which is about speed.”
- Technical skills. The people who invent an Indy 500 race car don’t drive it. The people who invent the space shuttle don’t fly it. Being successful in business isn’t dependent on technical competence.
Cunningham argues that people with great technical skills acquired over 20 years often got one year of experience repeated each year for 20 years – and not 20 years of experience.
- Irrational exuberance. Also known as “optimism on steroids.”
Irrational exuberance manifests itself in these forms: an inability to listen (“I’m the guru.”); ignoring obvious risks; strengths morphing into weaknesses (for example, self confident morphs into arrogant); and an intense need to be right.
- Failure to have a second idea. Because they love their first idea! Entrepreneurs all think they know enough, so they spend all their time defending their idea instead of learning from what they don’t know.
- Run out of cash. Cunningham remarked: “Running out of cash is a little like saying, ‘how did he die? Well he stopped breathing.’ But that doesn’t tell the whole story.”
Some of the underlying reasons businesses run out of cash: lack of planning, obsession with the product, no niche, no value-add, no business skills, the need for speed, no cushion.
In Part 3 of this report, I’ll cover the most interesting things I heard Cunningham say about the solutions to the 6 big mistakes that people make in business.
(Photo credit: keystothevault.com)