Colin Jones: Starting up
Colin Jones: Starting up
Dr Colin Jones is Senior Lecturer in Entrepreneurship at the University of Tasmania’s School of Management. An experienced entrepreneur, he co-ordinates the Entrepreneurship major and teaches the Graduate Certificate of Commercialisation.
What sort of challenges do people typically face when starting projects?
We all have relationships in our lives – good ones, bad ones – and they tend to mimic the process of entrepreneurship. Imagine if you were going to say to somebody “I love you” before they said it to you. You’re very vulnerable.
That’s a bit like saying “Right I’m going to start this business!” And you open the doors and say to the world “I love you all!” The world may not say it loves you back.
The extent to which you misjudge is the gap between what you thought you knew and what you actually needed to know.
But how do you find out what you need to know?
More often than not we tend to overestimate and that’s where problems start. The Lean Methodology asks what assumptions you are making in terms of the risks that you think you’ll face – why you think a customer or user would want to interact with you positively, or why you think a location would work.
The best saying I’ve ever come across is “No plan survives first contact with customers.” (Steve Blank).
The key thing is being able to test your assumptions as soon as you make them. The easiest way to do that is to talk to as many people as you can and don’t be worried about someone having a negative view. Because ultimately you’re going to assume responsibility for making decisions and it would be cool if you are as well informed as possible.
As a customer you have a lot of power, you already have a degree of importance in a person’s eyes. So as a customer you can ask, “You’ve been in business a while. Any chance I could buy you a cup of coffee? I’m thinking of starting a business down the street and I’d love to tap into some of your expertise.”
The other way of doing it, is to ask yourself “What are the success factors that are working for other people in this area? Who’s succeeding in this area and who isn’t? Why are they succeeding? Why aren’t they succeeding?”
Or you go to the town next door and you ask people in similar businesses for their tips.
How do you get the finances right?
Double the expenses you think you’re going to face and the time you think it will take you. And halve the revenue and/or interest you think you’re going to get. Then ask yourself, “Does it still make sense to do it?” Because it is going to take a lot more time and money to actually get it off the ground than you anticipate and you won’t get the returns or the interest straight up.
A lot of people will say “I need £20,000,” and sit there and wait until they find it, because there aren’t any beautiful benefactors walking around the streets handing this dough out.
The alternative is to solve the question of how to do this for nothing. Then there’s nothing stopping you.
But how can you do something without spending your own money?
Use “emergy”. Emergy is about recognising whose shadow you can step into. Be mindful of what’s happening around you and how you can swim with the current rather than against it. For example, pizza shops get an advantage from the big pizza takeaways advertising, because people then go out to their local Italian place.
Another answer is crowdfunding. Craft a clever pitch which makes people really buy into your passion and energy.
There are about ten or more crowdfunding platforms, and there’s a lot of different genres of crowdfunding now. Instead going straight to Kickstarter, think, am I asking for a donation, a grant, an investment? There are different ways to understand money. If someone’s looking for a return on an investment and you’re not offering them anything, don’t pitch in that space.
Last year, my wife’s family were hit by the typhoon that passed through the Philippines. We put a website up with pictures of the disaster and within three weeks, we had AU$5,000 to rebuild houses in her town.
There was an emotional context for donors. The emergy was that everybody knew this typhoon had gone through – it was on their tv screens. We were promising that every cent went on the ground and they’d get updates as to what was actually happening. That’s what people wanted. They wanted to know that everything they gave was hitting the ground.
There has to be something else other than just the business mechanics.
What’s your advice for when people discover they’ve made a mistake?
The entrepreneur needs to be quite experienced at coping with disappointment. That’s why in entrepreneurship education these days we put a lot of focus on failing and create opportunities for people to fail, so that they can at least understand how they feel when that happens.
But sometimes you actually can’t learn. Don’t try to hide it. Be as candid as you possibly can.
How do you fix things? Especially when you’ve upset stakeholders or your customers, or the mistake is detrimental to the development of the project?
The best thing you can do is go on Facebook or Twitter. Social media is such an important part of any initiative. You’ve got to be good at it and the best way to be good at it is to play, just experiment but be honest in that space.
Give your end users the opportunity to give feedback. Ask them questions that they may assume you know the answers to. Be honest because people respect honesty if they sense it’s not spin.
If you just try to put up excuses, blame someone else, or not talk people, the problem will get even worse. People will wander away from you. Being proactive is the most important thing.