Author Archives: hippotential

Get Your Creative Mojo Here

Creativity is essential for innovation–be that in the form of entrepreneurship or “intrapreneurship.” The ability to look at what everyone else sees and form a different conclusion requires a unique paradigm. Sometimes, it can be hard to know how to shift one’s paradigm if it is too similar to those in your environment.

@Nadiagoodman wrote for Entrepreneur recently an article entitled “How to Train Your Creative Mind.” An excerpt follows below:

As Louis Pasteur once famously said, “Chance favors only the prepared mind.” To be an innovative entrepreneur, you want to foster creativity in your daily life so that your mind is ready when opportunity arises.

“Creative ideas often come from unusual combinations,” explains Steven Smith, professor of cognitive psychology at Texas A&M University. “The best solution is not going to be the thing everyone thinks of. It’s going to be something unusual.”

These unusual combinations, called “remote associations,” are related ideas that may seem unrelated at first glance. They are the essence of creative thinking. To cultivate creativity, you want to increase your chances of stumbling on an unexpected link. 

Years ago, I was on a quest to understand why some people seemed to be creative and others were not. Additionally, I searched for tools to help inspire creativity. My favorite read on the subject–then and now–is Roger Von Oech’s classic work, A Whack on the Side of the Head: How to Unlock Your Mind for Innovation.

In the book, Von Oech lists 10 “mental locks” that have to be overcome in order to spur creativity. He offers tips to unlock one’s mind–

1. “The Right Answer” –
Tip #1: A good way to be more creative is to look for the second right answer. There are many ways to pursue this answer, but the important thing is to do it.
Tip #2: The answer you get depends on the questions you ask. Play with your wording to get different answers. One technique is to solicit plural answers. Another is asking questions that whack people’s thinking.

2. “That’s not logical!” –
Tip #1: For more and better ideas, I prescribe a good dose of soft thinking in the germinal phase, and a hearty helping of hard thinking in the practical phase.

3. “Follow the Rules” –
Tip #1: Play the revolutionary and challenge the rules – especially the ones you use to govern your day-today activities.
Tip #2: Remember that playing the revolutionary also has its dangers. Looking back on the decision, sometimes it goes too far.
Tip#3 : Have rule -inspecting and rule-discarding sessions within your organization. You may even find some  motivational side benefits in this activity – finding and eliminating outmoded rules can be a lot of fun.

4. “Be Practical” –
Tip #1: Each of you has an “artist” and a “judge” within you. The open-minded attitude of the artist typifies the kind of thinking you use in the germinal phase when you are generating ideas. The evaluative outlook of the judge represents the kind of thinking you use in the practical phase when preparing ideas for execution.
Tip #2: Be a magician. Ask “what if” questions and use the provocative answers you find as stepping-stones to new ideas.
Tip #3: Cultivate your imagination. Set aside time everyday to ask yourself what-if questions. Although the likelihood that any given “what-if” question will lead to a practical idea is not high, the more often you practice this activity the more productive you’ll become.

5. “Avoid Ambiguity” –
Tip #1: Take advantage of the ambiguity on earth. Look at something and think about what else it might be.
Tip #2: Try to use humour to put you or your group in a creative state of mind.

6. “To Err is Wrong” –
Tip#1: If you make an error, use it as a stepping-stone to some new idea you might not have otherwise discovered.
Tip #2: Strengthen your “risk muscle”. Everyone has one, but you have to exercise it or else it will atrophy. Make it appoint to take at least one risk every twenty-four hours.
Tip #3: Remember these two benefits of failure: First, if you do fail, you learn what doesn’t work. And second, the failure gives you an opportunity to try a new approach.

7. “Play is Frivolous” –
Tip #1: The next time you have a problem – play with it.
Tip #2: If you don’t have a problem, take the time to play anyway. You may find some new ideas.
Tip #3: Make your work place a fun place to be.

8. “That’s not my area ” –
Tip #1: Develop the hunter’s attitude, the outlook that wherever you go, there are ideas waiting to be discovered.
Tip #2: Don’t get so busy that you lose the free time necessary for idea hunting. Schedule hunting time into your day and week. Little side excursions can lead to new hunting grounds.
Tip #3: Look for analogous situations. Often problems similar to yours have been solved in other areas.

9. “Don’t be Foolish” –
Tip #1: Occasionally, let your “stupid monitor” down, play the fool, and see what crazy ideas you can come up with.
Tip #2: Recognize when you or others are conforming or putting down the fool. Otherwise, you may be setting up a “groupthink” situation.
Tip #3: May the FARCE be with you.

10. “I’m not creative!” –
Tip #1: Whack yourself into trying new things and building on what you find – especially the small ideas. The creative person has the self –faith that these ideas will lead somewhere.

 

 

 

Be An Ultimo Entrepreneur

Entrepreneur Country is a UK magazine I enjoy reading for stories that are refreshingly different insights. The views “from across the pond” provide a perspective on entrepreneurship that is distinct from the usual fare in the United States. Instead of a fascination with high-tech start-ups and deal making, the editors choose to feature entrepreneurs from other industries. The stories that are shared bring to light principles that can be applied across many settings.

Identifying a gap in the market to provide a unique solution to a problem can be hard, but very rewarding.  Michelle Mone found that helping women get what they want has been a path to success for her company, MJM International. MJM has made her one of the top 3 female entrepreneurs in the UK. Mone shared key points of her entrepreneurial journey in the July issue of the magazine.

In October 1996, at a dinner dance, Michelle was wearing an uncomfortable bra and decided she would invent her own in its place that would be comfortable, cleavage enhancing and improved in appearance. MJM International was born, (and the Ultimo brand was launched.)

Not only (has) Ultimo (been) revolutionizing the lingerie industry, it (is) now taking on cosmetics, with every product going through several rounds of testing [‘Every product has to be the best, I don’t accept second best’ – Michelle] and perfecting before it reaches the high street. “We have new products launching all the time and we have 13 inventions in total. The gel filled bra that we invented 12 years ago as an alternative to plastic surgery was what made us, because Julia Roberts wore it in Erin Brokovich. Then we have the 24 hour bra that you can’t feel that you’re wearing, and now UTan. I think next year we will expand further with a full on cosmetics range”.

Key points in Mone’s life story included:

  1. Taking a job to support her family as a teen when her father became wheelchair bound,
  2. Tacking Richard Branson posters on her wall instead of teen idols,
  3. Hiring 11 other teens to help her with a newspaper delivery route,
  4. Distributing Avon books,
  5. Working as sales and marketing lead for Labatt’s in her early 20s, and
  6. Launching MJM soon thereafter.

After taking her severance pay and putting it to good use with MJM, she moved from idea to commercialization. Here’s how she described the transition to becoming a successful entrepreneur:

“You have to do your research and find out if you have a viable product. See if you can meet a manufacturer too, because there will be issues in terms of shipping and some factories are too large for a new product. Go smaller, work out the volume and do as much homework as possible.”

“You just have to be incredibly organised, but I’m not super woman and I do get things wrong.” Ultimo suffered an enormous setback in 2002 when a married couple, distributors for MJM, fled with £1.6million.

She exhibited tremendous tenacity in overcoming this obstacle. a divorce, and other setbacks. Kelly Dolan, who conducted the interview with Mone, saluted her “ability to leverage MJM’s press position through PR campaigns (comprised of)  celebrity endorsements and clever marketing” Dolan asked how young businesses can optimize PR, to which Mone responded, 

“If you can’t afford a PR company then remember that there is nobody more passionate about your business than you. Write a press release, send it out to everyone and hope for the best. Hire a PR company if you have the money, but you have to get across to whoever is representing you that real passion for the business.” 

Well put! Every entrepreneur–female or male, in fashion or services, regardless of challenges–will meet with greater success if able to convey passion for the target audience and its needs.

 

Mainstreet Business Demonstrates Strategy Execution

One of the interesting conversations that keeps coming up  revolved around the hyperfocus on technology based start-ups to the exclusion of virtually every category. When I attend networking events, many of the entrepreneurs that I encounter are articulating the value proposition of their high tech start-up. Almost every single one speaks of the next competition they plan to enter to secure financing to fund their idea.

What seems to be missing in these conversations is a focus on executing a business strategy rather then simply a funding strategy. In the hot pursuit of obtaining seed capital, entrepreneurs  can become blind to what’s happening around them with the other important facets of the business. From human resources to operations, marketing & sales, there are many other aspects of development besides the capital raise that warrant attention.

In companies that do not claim to have a technology focus, it is a little easier to talk to the entrepreneur about business basics. Professional development, personal finance, market research, proof of concept, branding, feasibility, organizational design, supply chain, & sales are front and center topics in most companies. Instead of intellectual property, securities and like topics du jour, most of the companies that contribute to our way of life and represent the fulfillment of the American Dream struggle with these topics.

I fear that, by giving so much attention and publicity to technology companies who may have the outside chance of selling at a favorable multiple, we are failing to give earnest heed to companies with issues that are easier to address and that have a higher likelihood of making it to the five years in business mark. Simultaneously, we become so enamored with the perfection of code or intellectual property that we fail to talk about business basics with the technology companies, though they need to think through all of these issues in addition to theunique issues they face.

Please do not misunderstand my intentions here. This blog post is not about bashing technology companies. Quite the contrary, it is suggesting that all companies are best served by focusing on fundamentally sound business principles. In the very next breath, however, I would argue that non-tech companies not be relegated to second tier/ugly stepsister status simply because the multiples they usually generate are lower. The upsides of a “mainstreet business” is that it has less inherent  risk, requires less capital, and can generate revenues sooner. 

How can we, as the American business community, more effectively support mainstreet businesses? (And not fail to challenge tech companies to also execute on key business fundamentals as well?)

 

Antarctic Innovation

If you didn’t have the opportunity to watch the IMAX movie about Sir Ernest Shackleton’s now-legendary 1914-1916 British expedition to Antarctica, you missed out on a big screen adventure. Yet, as can be the case, cinema leaves out key details in non-fiction stories. As it happened, Shackleton had a lot of difficulty recruiting a crew to accompany him in exploration. A LinkedIn acquaintance of mine, Gijs van Wulfen, found that an advertisement was run in a London paper in 1913. The ad could, as Gijs points out, just as easily be an appeal for those looking to become innovators:

Men wanted for hazardous journey. Small wages, bitter cold, long months of complete darkness, constant danger, safe return doubtful. Honour and recognition in case of success.

van Wulfen points out that there are numerous similarities between expeditions and innovation:

  • A promised land. Most people searched for the adventure only when it was really necessary and when they had nothing to lose. This is so familiar in our organisations today. Real urgency is only experienced when ‘old solutions’ do not work anymore and markets are saturated. And it is felt by people expecting big promising treasures.
  • The challenge of being 1st. Explorers strive being first. Amundsen discovering the North-West passage. Livingstone searching for the source of the Nile. Hillary climbing Mount Everest. Entrepreneurs have the same ambition: developing ‘new-to-the-world’ innovations to outsmart competition.
  • A group effort. Explorers almost never went alone. Hillary could not have conquered Everest if he wasn’t saved first by Tenzing Norgay from falling in a crevasse. You can invent a new product, service or business model alone. But within organizations you cannot innovate alone. You need people from every discipline to develop it, produce it, market it, sell it, bill it and service it.
  • A long journey. Discovery voyages lasted many years, due to unexpected setbacks such as an unknown illness, a tropical storm or mutiny by the crew. The average time for the development process of a new product, which takes 18 months from idea to introduction, follows similar patterns.
  • High risk of no return. Many ships perished along the way. On one of the voyages of Magelhaes, four of the five ships did not return. One ship survived and made the expedition worthwhile. It’s similar in innovation. From the seven new developed product ideas only one product enters the market successfully. The remaining six perish along the way.
  • Serendipity leads to even bigger rewards. Sometimes explorers thought they landed on a small island, which proved to be an enormous continent afterwards. As the Vikings did who discovered North America long before Columbus.  Compare this with the development of SMS-services. It was originally developed for the business market, but it did not take off. After young people caught on to the idea of SMS as a modern cheap way to contact each other, it became a worldwide market with more than three billion users.

Entrepreneurship, like innovation, is an expedition for the hearty. Those who aspire to start enterprises must be willing to take risks, have a clear vision of a better solution, work hard for a long time, recognize opportunity, and work through teams. 

 

Want Some Financing With That Seasonal Brew?

 

Jim Koch, who started the Boston Beer Co. in 1984, found that banks did not want to lend money to his or other start-ups. The inherent aversion to risk in the banker DNA means that they prefer to deal with businesses that have positive cash flows today rather than the promise of rosy returns in the future. Koch decided to start his own program, Brewing the American Dream, to help food, beverage, and hospitality entrepreneurs in the Boston area launch their businesses.

Koch comes form a long line of brew masters–six generations and counting–but is not what one may think of as a beer drinker with little training for running a company that features such a powerful brand as Sam Adams. With a bachelor’s degree, a law degree, and an MBA from Harvard, he has been groomed for this moment. He now wants to make sure that others get the right combination of instruction, mentoring, and capital to be successful in their own rights.

An article on businessweek.com last spring by Nick Leiber tells the story. Launched in 2008, the initiative aims to go beyond traditional corporate philanthropy to “leverage” Boston Beer employees’ expertise, “rather than just giving away money or time or beer,” says Koch. “I wish I could’ve had some loan money instead of having to raise equity, and I would’ve loved to have advice about the nuts and bolts of growing a business.”

Now the program, Brewing the American Dream, which has advised nearly 3,000 business owners and financed more than $1 million in small loans for about 150 businesses, is going national. Boston Beer, the largest craft brewer in the U.S., plans to lend at least $1 million this year, hold monthly speed-coaching events in major cities across the country, and curate an online-networking and education site for participants. The coaching events, at which beer flows freely, are meant to be informal and are open to any business owner, not just loan recipients. 

Lieber continues on to write,

Koch isn’t seeking a financial return from Boston Beer’s investment in the program—a tiny fraction of the $157 million the company says it spent in 2011 on advertising, promotions, and selling expenses. “There is a huge amount of coaching, hand-holding, advice to get the repayment [rate] up to 95 percent,” says Koch. “I know from the economics of our program; you lose money on it. It has to be philanthropic.”

Supporting small businesses through donations to nonprofit lenders has been catching on among prominent companies, which have created programs such as Goldman Sachs’s (GS) 10,000 Small Businesses andStarbucks’s (SBUX) Create Jobs for USA. “But [Boston Beer’s] combination of employee engagement, capital resources, and mentoring feels new to me—and very much a response driven by what’s been happening in the economy in the U.S. over the last several years,” says Harman. “It was a right time in the economy because lending had all but come to a halt and small businesses were really struggling.”

Notice the elements that are mentioned as hallmarks and critical success factors of the program.

  • Access to capital at reasonable rates
  • Coaching/mentoring
  • Networking

Every entrepreneur would benefit from this favorable combination. Unfortunately, many incubators and accelerators make capital expensive by taking an equity position in the companies they “help.” Non-profit organizations established to provide the coaching and mentoring often put a cap on the number of hours an entrepreneur can access assistance. The networking component is equally important. Instead of events where the beer flows and superficial conversations seldom lead to business plan execution, what is needed is more one-on-one opportunities. When start-up companies are housed in settings where the participants can pass one another in the halls, serve as peer counsel, and make key introductions for one another, success is far more likely.