The Six Essential Skills of Extraordinary Entrepreneurs
Under Armour manufactures sweat absorbent clothes. Plank was a creator who cracked the creator’s code. There was nothing that could stop him. Airbed-and-breakfast (AirBnB) was also a huge success story. It was a model that encouraged others to rent out their spaces to tourists. Nathan Blecharczyk helped with the programming. The company is now valued to at least $10 billion dollars. Although some people have business ideas, most choose to ignore the call. Courage and discipline can go a long way. You don’t need to be an expert in a field to create a business related to a particular field. You don’t need an MBA as well. This book will show you how people can achieve extraordinary results. Theranos is a company that is poised to shake up the lab testing industry. It was innovative as patients could go to a local pharmacy to have blood tested and the results would be automatically routed to their doctor. Prevention is more possible that way. What is the magic code to achieve lasting results? The author has interviewed countless of entrepreneurs. Her research uses grounded theory methods. All entrepreneurs share certain common traits that make them special. The skills can actually be practised on. Step 1: Find the Gap (Be a Sunbird, Architect or an integrator). Step 2: Drive for Daylight. Step 3: Fly the Ooda Loop (update your assumptions and make fast decisions). Step 4: Fail Wisely (Place bets on small ideas and fail fast). Step 5: Network Minds (harness diversity). Step 6: Gift Small Goods (helps others in order to strengthen relationships). No special expertise is needed to understand the above. Creators attract allies.
Throw yourself off a cliff and assemble an airplane on the way down. Good startup entrepreneurs are extremely aware of the impact of time because with each second, you are closer to the ground. The whole thing is about building an airplane that is self-sustaining. – Reid Hoffman
Find the Gap. Elon Musk read science fiction novels when he was young. He learnt that asking the right questions was important. The Internet was something that he tapped on. Kimbal and him started Zip2, a business that placed media content online. In 1999, it was bought over by Alta Vista. Later, he co-founded Paypal to revolutionize the problem of cheques. He somehow knew where to look for opportunities. Dean Kamen is a sunbird. He takes technology from other industries and tries to solve problems in a new industry. He studied helicopter construction models and tried to improve a stronger heart stent. For example, the Segway PT uses gyroscope technology employed in the aeroscope industry. Howard Schultz used the espresso bar concept in Italy and brought it to the US. However, direct copying the Italian model didn’t work and Schultz had to modify the concept slightly to suit customers. Surface analogies describe similar product features. Structural analogies reflect parallel underlying elements. It is important to understand underlying elements. Keep pushing the analogies you know to the limit in order to succeed. Bob Langer tries to use engineering to solve problems in a surgery lab. For example, he got inspiration from a gecko’s foot when he created a surgical bandage. Outdated concepts can be brought up to date. Google also re-applied old technology of ranking searches and made it work. Keep thinking about the assumptions and whether the idea can be transported elsewhere. When you allow your mind to wander and listen to other stories, it becomes easier to succeed. Another option is to be an architect. Elon Musk dreamt about space travel one day and calculated the costs of building a greenhouse in Mars. However, he realized that rocket costs even in Russia were too expensive. Eventually he decided to build it on his own. Architects must build things from the ground up. The rockets that existed were designed for maximum performance, which he didn’t need. Elon kept asking whether rockets could be made of cheaper materials in order to drive costs down. By manufacturing rockets in-house, Elon could control the costs better. He builds things from first principles, like the axioms in Mathematics. His project ran into a lot of problems. SpaceX was founded and it now hires more than 3000 people. His ultimate objective is to make life interplanetary. Architects are problem finders. Elon Musk also came up with the concept of an electric car. Stay alert to irritations you face. Sara Blakely made prototypes of footless panty hose because she found existing attire in the department stores uncomfortable. Ideas are fragile in their infancy and you should only tell those who want to improve your idea. Architects are people who do not need affirmations from others as to whether they have done well. Sometimes you need to wipe all your existing assumptions away. Spanx’s Footless Pantyhose and Power Panties have been top sellers. Sara Blakely is also the world’s youngest self-made billionaire. These creators think all the time. They may good use of existing anomalies. When you see a problem, keep asking questions. Strip away preconceived notions. Steve Ells founded Chipotle, a fast casual restaurant selling high quality Mexican street food. It is now a company worth $3.6 billion dollars. Integrators help to assemble opposites. For example, cubism is an abstract art form. It is crucial to mix and match ingredients. Their menu is customizable. Fast food has average quality food only. The food preparation techniques are constantly being tweaked and improved. Chipotle also uses organic ingredients. Most people suffer from functional fixedness. Refer to the candle, tacks, matches experiment. People need to see things differently. For example, the concept of a ‘luxury SUV’ is really a modern concept. The ability to think two or more opposite concepts at once is known as Janusian thinking. The Gilt founders married the concept of luxury goods and e-commerce. It offered a unique customer experience that kept people coming back for more. The most important tool is creativity and curiosity. Everything beings with an alert and questioning mind.
The first and most obvious criterion is that Sunbirds take something that already exists and transport the model to create something new. They relocate and reshape existing concepts across geographies and industries, and bring old ideas up to date. – Amy Wilkinson
Sunbirds willingly look in places that others dismiss. They gain an advantage from knowing a little bit about a lot of things and repurpose knowledge from seemingly unrelated fields. – Amy Wilkinson
Drive for Daylight. Race drivers focus on the horizon and do not look at the pavement beside them. Keep your long term mission in mind. Set sights on the horizon, scan edges and avoid nostalgia. Learn to set the pace. Hamdi Ulukaya, a Turk, is in the Yogurt business. Eventually he made a high-protein, low-fat Greek style yogurt and introduced it to the US market. Most of the yogurts are too sweet and artificial. He marketed his product differently to make it conspicuous for the consumer. He always had the goal in mind. The yogurt is known as Chabani. Greek yogurt is now very popular in the US. His company gained incredible market share in a short span of time but increasing production capacity rapidly. You have to learn to dictate the tempo. Her company focusses on early detection of illnesses in order to improve quality of life. Timing is crucial in the diagnosis of illnesses. Her ultimate goal is prevention. Catch things right and you have a good chance. One needs a radical forward-looking approach. To-go thinking, or focusing on what remains to be done, improves achievement. This helps provide a mental framework for success. It is crucial to be self-aware and to visualize your goal in a concrete way. GoPro is another example of a successful product. Creators move to create the next big thing. The dropbox founder tackles new problems. Dropbox was essentially a way of storing information on a cloud. People loved simplicity and didn’t carry a thumbdrive around. Learn to push yourself to the edge of your comfort zone. You must go fast and keep pushing your boundaries. Sending surveys to sense market demand is too slow. Entrepreneurs need to scan the environment. Zipcar also created new ideas for the car rental market. Airbnb relied on user ratings to determine whether a host was good to their guests. Airbnb originally started to accommodate conference goers who couldn’t find hotel space. You can go from being an outsider to an insider. Learn to update and revise products. Often, individuals who face constraints can improvise and then market these solutions. Scan fringe ideas to develop into mainstream ideas. Learn to avoid nostalgia. Don’t get stuck looking back. Keep looking forward. There is never the right time to do something. Learn to grow with the next generation. Creative people must also decide what not to do. Steve Jobs always believed in leaping ahead, even though it might cannibalize some of their sales. Seize the wheel and stay focused. Success is the ultimate objective.
Never look back unless you are planning to go that way. – Henry David Thoreau
You have to have clarity on why you are doing something, what motivates you, and how to deal with things that are really difficult. – Elizabeth Holmes
Koo and Fishbach found that when we are committed to a certain goal, focusing on past accomplishments tempers motivation. However, if we consider what we have left to do, motivation is not only sustained, but quickened. – Amy Wilkinson
If you start thinking you are good at something, that’s often the day you stop trying to be better and open the back door for someone to come after you. For every Google or Facebook, there are also shining stars overtaken – and that’s why we always aim higher. We never feel like we’re done. – Drew Houston
Creators willingly abandon a legacy, even a powerful one that brought them success. They avoid nostalgia. Whether it’s a fond memory or a comfortable approach, they refuse to let history hamper progress. – Amy Wilkinson
The best merchants in the world are not the ones who are predicting what’s next; rather it’s the ones who are dictating what’s next. So our job is to tell the marketplace, “This is what our football cleat should look like. This is what your training platform should be.” – Kevin Plank
If something sucks, I tell people to their face. It’s my job to be honest. – Steve Jobs
Fly the Ooda Loop. Levchin met Thiel and they decided to start a business. Two or three of their initial business models failed. Along the way, before Paypal was created, re-iterations had to be made all the time. How did the PayPal mafia created the OODA loop? OODA is also applicable to aerial combat. It means ‘Observe, Orient, Decide and Act’. It is important to make decisions based on changing circumstances. Orient means to distinguish the relevant from the irrelevant. Decide means to take a course of action. Act is to execute. Note that the loop flow is continuous. Learn to observe and process information fast. Information must be synthesized quickly. Stimuli must be differentiated and interpreted. Decisions must be made quickly. It is crucial to stay nimble and to master fast-cycle iterations. PayPal used the power of email accounts. Even if someone didn’t have a PayPal account, the email with the click to create an account would be sent to the user. It is important to make your intentions unpredictable while also reading competitor’s intentions. Learn to move fast. PayPal took instance measures to tighten security to manage credit card fraud. Hire from your wide network of friends. You need wingmen in your adventure. Members of the company must think independently. Sparring among employees aided progress. When something is not right, you have to speak up. You need to surround yourself with people who can correct you and your business model. Learn to keep tweaking and to make small improvements in your business. Learn to grow using an existing distribution platform. LinkedIn is also a big hit and is used for business networking. Release your product fast. Do not wait for the ‘perfect model’ to emerge before releasing it. Design can evolve over time through iterations. Palantir Technologies is now valued at $9 billion. It is a company that indexes structured and unstructured data on a massive scale. Many problems are solved via pattern recognition. Glow is an app that can provide actionable health data. Yammer is a social network, similar to Facebook, but it’s for companies. PayPal was an endless Ooda Loop and the founders experienced a learning lesson that not many could experience. Team members were young and competitive. The OODA loop becomes instinctive with practice.
The ability to learn faster than your competitors may be the only sustainable competitive advantage. – Arie de Geus
One rule of thumb is to take over a fairly narrow market with a technology that is ten times better than the next best thing. PayPal was valuable to eBay sellers because the next best alternative was a cashier’s check that would arrive in seven to ten days. – Peter Thiel
The single biggest predictor of attrition – lethal for small companies – is how many friends employees have at work. If we want to use models, you could think of a cult being better than a factory. – Peter Thiel
Fail Wisely. Failure provokes learning. Failure is indeed necessary. That is the Silicon Valley culture. You need to be brutally honest with yourself. Be transparent about your weaknesses and ask for help. Use small failures to push yourself further. Famous people rarely succeed on their first attempt. An example is the author, Ernest Hemingway. Learn how to proceed. Failure is never final. Learn to take small bets at every turn. Tell it on a smaller market to see if it will work first. This is also known as front-loading of failures. If you try many things, there is a high chance that one of them will work out. Kindergarten students fared better than engineers at simple puzzles because they won’t afraid to fail and to try. You can conduct experiments on consumer behaviour. Treat failure as a form of testing. If you are given time to redesign and tweak, you will have a better chance of success. What is a failure ratio that is acceptable to you? It is important to consider all risks before doing a business. Treat failure as just a fraction of your total portfolio. There is a saying that if you are failing, you are not being aggressive enough in exploring new options. It is important to not just doing what worked previously. Google engineers can devote 20% of time for personal projects. Venture capitalists often experience a high failure rate when investing in companies. Set a failure ratio that is greater than zero. Elon Musk had a hard time starting his all-electric vehicle company. He promised to refund customer deposits if Tesla failed to deliver their cars. The problem with the initial roadster was that the production costs was too high. Sourcing for a battery pack was a huge issue. If you feel your work matters, setbacks are less of a pain. Reed Hastings is the co-founder of Netflix. The company struggled badly in the late 2012. Now, it has surpassed HBO in the number of subscribers. If you want to improvise, you still need to accept the premise and then tweak accordingly. Adopt the ‘yes…and’ mentality. Always keep an open mind. Be receptive to new ideas. Neeleman is the co-founder of JetBlue. He has ADD but managed to overcome all odds. He was always very restless. He was very in touch with the ground. JetBlue did very well. However, the company was affected in 2007 by blizzards and flights were grounded. After he was ousted from his company, he used the business model to start something similar in Brazil. It was key to be passionate in something and never give up no matter what. Success is about perseverance. Understand that if you have a growth mindset, success will be easier. Which do you believe in? Ability or effort? Almost every entrepreneur has experienced uncomfortable moments etc. The biggest failure is not trying.
If you take two entrepreneurs and put them side by side, and they’re exactly identical except that one’s failed massively and the other hasn’t, I’d invest in the first over the latter. Learning from failure makes you a more valuable asset. – Matt Cohler
If you’re a founder or CEO, you have to do all kinds of tasks you might not want to do. Nothing is too menial. If you don’t do your chores, the company won’t succeed. You’ve got to do whatever it takes. – Elon Musk
If something is important enough, or you believe that something is important enough, even if you are scared, you still keep going. – Elon Musk
Failure is only something you know in hindsight. – Shawn Carolan
Network Minds. Jawbone’s initial UP product had problems after it launched. The CEO offered full refunds for the product. He assembled a team from all departments and dissected what went wrong. In Dec 2012, it was relaunched and it was a huge success. Diversity helps to unlock breakthrough results. Build on each other’s ideas. Assemble a diverse team. During the WWII, the allies assembled teams to crack at German military intelligence. Elon Musk draws on a huge range of expertise. In this world, it is difficult to be a genius alone. It is all about harnessing different strengths. It is a challenge to bring design and engineering together. Jawbone combines hard and software quite well. The initial problem with the fitness band was that people subjected it to rough treatment and it didn’t function well. Later, they improved the protective layer. Computing is now on your wrist. Create a mobile and modifiable workspace for people to get the most out of them. Kelley and Dean Hovey worked together. Their company is IDEO. Kelley has created many inventions. Harness collective brainpower of people. Once you have a prototype, people start believing in you. Everyone can offer something unique. The space you design must relate to the type of problem solving. Clarifying of work roles are important. Pulse News is a brilliant news app. Kothari and Gupta networked with café patrons to tweak their Pulse News app. Dietz designed the MRI scanner for kids to make it look like an adventure. Patients were much more satisfied after the scan. People can help unlock solutions. Networking comes with a benefit. Breakthrough comes from ‘different’ thinking. Although it is easier to work with homogenous groups, it is better to work with heterogeneous groups as they yield better results. Surround ourselves with people who are dissimilar. Build flash teams for short projects. They can be disbanded after the project. For instance, search and rescue operations teams need to be assembled quickly. Revolution Foods assembled a whole group of diverse people in order to find nutritious ingredients and think of how to cook them. There is a need to pay attention to team dynamics too. Both veterans and newcomers must be included. You can create prize competitions to entice people to work together and solve problems. Get different teams to work on the same problem and offer a prize to the winner. This is because people can look at problems without industry biases. Learn to gamify work. Playing games with others can help to build relationships. Foldit is a protein folding game and one can compete with others around the globe. Learn to make it fun for people. Collaboration and divergent approaches are more and more popular and it can deliver synergies. Networked minds can solve complicated problems.
If you are talking about an idea, no one helps you. But the minute you bring a prototype in the room, everyone is ready to tell you what is wrong with it, and they can help you build and build and build. – Kelley
Interestingly, the further the problem was from the solvers’ expertise, the more likely they were to solve it. – Karim Lakhani
Gift Small Goods. Robert Langer runs a biomedical engineering lab in Cambridge. He is also a very humble man. He is also prolific at what he does. Folkman hired him and Langer worked in Boston Children’s Hospital. Success is about caring about others’ needs. Creators should follow to help others, even if it’s in a small way. Develop allies with those who are willing to reciprocate. Helping others will enhance your reputation. A positive word of mouth can go a lot way. Helping others makes you more productive. Create mutually beneficial partnerships. Langer often helps his students. You can only go so far if you do everything alone. Sometimes, even sharing knowledge with others can be good. Co-operation is contagious. When you send cards to others, there is a high chance you will be able to receive one back. Many people try to repay small acts of kindness. Generosity can have a multiplier effect at times. It’s always about people first. You may even receive help in your careers. You must establish parameters for those you choose to help. LinkedIn is good because you can see the number of recommendations the person has. Learn to set parameters for time and effort. Giving helps to deepen relationships and broaden connections. Learn to be interactive. Give-and-take should happen. You should not be giving all the time. Even if you are an angel investor who rejects someone’s business idea, you can still try to give him advice. If the clients are too large for you, you can refer them to someone else. It is important to be nice to others. More than 200 creators participated in the creation of this book. Generosity can be an inspiration.
It is one of the most beautiful compensations of this life that no man can sincerely try to help another without helping himself. – Ralph Waldo Emerson
It’s not as if others will lie across railroad tracks for you, but they will think about how things could be useful for you. If you’ve focused on little things that you can do that are beneficial to others, most people will care about you and be eager to help. – Reid Hoffman
The Power of Six. Pierre Omidyar and Jeff Skoll founded eBay. They managed to overcome website difficulties. Now, they have millions of users. Each of the 6 skills sustain each other. The skills are accessible to all. Each one can be developed and cultivated. Make many bets so that you can learn. Always believe in yourself and in your idea. All of us have the power to be creators.