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Mutual Business Coaching?

I find myself disenchanted with what you might call “traditional” business culture lately. Now you, a savvy Interwebz reader, may be the sort of person who lives on a Coast near a Valley or in a town with a Needle, the kind of town with lots of people and loads of young up-and-coming goateed creatives and stuff. Living as I do in the middle of flyover country, I’m not sure “traditional business” means for you what it does here: lots of golf, inordinate striding, breakfast networking meetings, calling important people by their first names, and—the kicker, for me—a tendency to assume that people who made money in the last business cycle, or the one before that, or one a Long Long Time Ago, that those people are rich now because they are good businessmen.

This is the kind of self-reinforcing unexamined mythology that leads young entrepreneurs to their doom. You get an economic development infrastructure in place, you get boards and angel and VC investors all used to what they’re used to and standing by the claim that “business is always essentially the same no matter what the domain.” They set up boot camps and training seminars and they arrange these networking lunches and earnest young people in black suits or khakis show up and eat slices of pizza (at Tech Startup Events) or hors d’oeuvres (at Future Of Our Region Events), and they listen to that crap.

When I invest in a company, it’s the team I’m looking at. And by that I mean: I want to see somebody who reminds me of me when I was a kid.

When I hear an pitch, I need to understand it in the time the elevator door takes to open. And by that I mean: (a) we live in a town with stringent “human-scale” building height restrictions, so (b) you can tell we’re pretty fucking provincial so use only a few small words I’ve known since I was on the football team.

When you’re getting ready to launch, you need to get your business plan ready and make a convincing case for your market and your prospects over the next five years. And by that I mean: nobody ever reads the damned things, but at least we know we can tell you what to do and expect you to listen to your betters, sonny boy.

When you’re trying to raise serious money, you need somebody in charge of the firm who’s familiar with the language of business, of marketing, and the culture of startups. And by that I mean: When somebody paying more attention than me tells me you have a clue, I’ll stiff you with some tried-and-true club buddy of mine and you’ll fucking do what he says if you know what’s good for you.

And so forth.

Of course, I know you don’t live in this imaginary town I do. These are all straw man exaggerations. I’m just resorting to hyperbole to stage my own pitch. Right?

You betcha.

That said, and strawmen aside: I think smart people are actually smart, and that dumb people mess up new businesses.

There’s a sign on the administration view of every website I’ve run for ten years. It’s on my laptop’s desktop, too. It’s a reminder to me, as a manager and a meddler and a planner and a guy who’s trying to help and at the same time make a buck. Every one of these reminders says the same thing: This doesn’t work the way you think it does.

The biggest danger, in my mind, to a person starting a business—whether it’s some hare-brained entrepreneurial thing, or a nonprofit, or a “lifestyle” business (a term I despise)—is taking advice from people who assume they succeeded because of what they did.

The core of my advice to folks wanting to found a business is simple enough to pass along here: listen to “coaches” and “bootcamps” and economic development people only enough to convince them you respect them, and to learn what they expect so you can use that to your advantage, but don’t let them fuck with your money or ideas.

Notice I didn’t say stay away from them: I said be nice, try to really listen, do your best to learn, and along the way do the minimum amount necessary to ingratiate yourselves to them. If you can’t do those things, you actually do need a “people person” around, because it’s all about risk amelioration, not financial returns. Because you’re doing this to minimize the disruptive influence of their received wisdom.

Here’s why: These people succeeded by chance. Quirks of fate. They happened to sell off their companies or execute some other exit strategy just before some random economic downturn. They had rich relatives. They happened to be in the room when some dude wanted to invest in a startup. They had a smart administrator who kept them out of the research wing. They were middle managers in some global giant fucking firm and (more’s a pity) never heard a real human idea in their lives, and now they think they can tell you how to run your business. They go to meetings with their own clones and nod and shout Hallelujah whenever somebody utters a mantra about “invest in the team” or “business savvy” or “demographic targeting”. They not only imagine, they will say outright that every business is essentially the same, and that what matters is making the right mystical passes in the right order and also running it by your guts.

Bullshit. These people are human beings.

That said, they’re the small fraction of human beings who have the goddamned money. It’s not your customers who are going to make your new idea into a company, Startup Grrrl: it’s those fools with all the money.

Let me be as precise as I can be: human beings are stupid. You are too, by the way. But they are moreso, because they’ve had success after navigating an uncertain course through the ratmaze to their perceived cheesy Winning State. And when that happens, our intrinsic human mental wiring kicks in and all of a sudden they’re doing pattern-recognition on scant data. They’re superstitious. They are poor at modeling. They suck at generalizing, and for the most part their culture is founded on principles of reinforcing their notions.

[Like yours is, and mine is... but leave that for another day.]

Risk, reward, reinforcement. So strong, they don’t even have to repeat it to get it engrained; they just play off one another.

This doesn’t work the way they think it does.

Here’s what I think, instead.

Save your money, if you can, and don’t burn it at the altar of the priests in black turtlenecks and sports coats. Hang out with the ones you can, as stated above, but don’t waste money. Don’t risk your money or your time on them.

Instead, find five other startups. Seriously.

Form a Guild. Form an association that lets you each do what you want, spread the work around, support one another. Form a community of 30 people, not three, that can demand the attention (when needed) of one rare but actually useful business advisor at a time, and aggregate your risks across all your firms, and kick the bastards out when you’re done with them.

Coach each other.

I believe smart people, people with ideas like you have, are actually smart. And I think people with new ideas are more likely to understand the one true thing I plaster all over my own sensorium: This doesn’t work the way you think it does. This doesn’t work the way they tell you it does. This doesn’t work by formula, by superstition, by the novel application of pat anecdotal hand-waving or ritualized networking or in-group marketing to people who can’t bother to learn the difference between a social network and a website before telling you how to run your company.

There is no heuristic.

What you need is advice on how to fill out forms. Names of people who give out money, and what they expect. Examples, hard and factual, of business plans that have actually been followed. Access to people who are running businesses like yours, and right now.

What you don’t need is pabulum. You don’t need obfuscation, a gatekeeper who will let you get access to the people they convince you will help, or who wants to dabble and sees your idea as a good starting point. You don’t need people who are a bad match for your culture; any asshole who tries to change that culture you have now, no matter how much a n00b you think you are, without first convincing you beforehand that there are measurable returns and you can undo the changes if things go wrong? They gonna fuck you up.

Hell, you don’t need anybody at all whose advice doesn’t come with a warranty and a money-back fuck-off clause that kicks in when they give you bad advice backed by misleading credentials.

In other words: Sure, you need expertise you don’t have, but treat your “advisors” the same way you would treat your accountant: protect yourself from stupid people.

Any human being is as good as another, when it comes to common sense. Unless they’ve presumed they are winners because they did something a long time ago, under completely different circumstances.

When that’s the case, they’re a liability.

Further: If you want a good example of how economic development professionals can undermine perfectly functional ideas and business models by just not knowing what the words mean, have a look at this.

OscarD said,

April 18, 2009 @ 11:57 pm

“This doesn’t work the way you think it does.”

After reading this post (exceptionally well-written, by the way), I’m pretty sure that line is going to come to my mind on a daily basis for quite some time.

There is no heuristic and past sure isn’t future. Great post.

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