How Your Fear of Planning Is Ruining Your Life and How to Fix It

planning

When my mom was going through an aggressive round of chemotherapy, she came to stay with me. Years before this, she appointed me durable power of attorney. This meant I had the responsibility of handling her medical, legal, and financial affairs, in the event she was unable to. Because we had so many discussions over the years about her wishes, writing everything out was simple and only took a few minutes.

If the thought of planning makes you cringe, you’re not alone. A Harvard Business School study revealed that a large proportion of the people fail to set goals and make plans.

  • 83% of people do not have goals.
  • 14% have a plan in mind but are unwritten goals.
  • 3% have goals written down.

Your Fears Are Limiting You

 

In January, most of us write new goals or make resolutions. By February, many of us are already sliding down that slippery slope toward not accomplishing them.

According to research from the University of Scranton, 92% of people who set New Years’ goals will never achieve them. Clients I’ve worked with are people who become paralyzed by the thought of planning. They place way too much weight on the process. Planning is important, but it doesn’t have to feel heavy.

 

3 Excuses that Keep You from Succeeding

 

  1. Fear of failure.
  2. Apathy or indifference.
  3. Lack of planning skills.

Some resist planning out of fear and wanting to avoid being wrong. Others don’t know and can’t see what they desire, so they become apathetic, saying things like, “What’s the point?” Then, there are people who say they want to plan but haven’t found the right system that feels easy. They believe they lack a special skill set to plan and so they don’t.

If you are using any of these excuses to avoid planning…stop.

Overcome Fear Using a Vision

 

In January, I spoke with Mignon Francois, owner and operator of The Cupcake Collection, an award-winning bakery in Nashville. We discussed one of our favorite books, The Success Principles: How to Get From Where You Are to Where You Want to Be, by Jack Canfield.

Mignon said that one of the greatest principles she was putting into practice this year was using more time for herself. She set the vision, and decided to employ the principle of working 196 days this year, or three to five days per week.

 

Decide on the Dream and Write It Down

 

Once Mignon knew what her dream was, she began to take on the feeling of working less, by connecting to the thought that she could actually do it. In doing so, her mind opened to all the wonderful possibilities in front of her. She was able to spend more time with family, mentoring entrepreneurs, speaking, traveling, and writing her book.

Mignon suggests we not overthink the plan, which could lead to procrastination. She says take a few minutes, and write it down.

 

Tweak the Plan as You Go Along

 

Ten years in business taught Mignon how to create efficient processes and delegate day-to-day operational tasks to trusted staff members. This allowed her the freedom to pursue other passions. As a result, she was able to start out this year by working less and creating more.

Making a plan does not guarantee success, but it focuses your attention. It helps you on your journey of getting from here to there. Planning not only helps to prepare you for life’s crises, but also for its celebrations.

 

If you’ve found this article helpful, find more HERE. Questions? Share in the comments section and send this to friends.

 

 


Elisha Lowe is a registered nurse, business strategist, writer, entrepreneur, and inspirational speaker with two decades of experience in healthcare. She works with top healthcare organizations to grow novel products that support improved patient outcomes.

You can follow her on Twitter @ElishaLoweRN or learn more at www.elishalowe.com.

4th Quarter Assessment: Putting Achievement In Proper Perspective

We all begin the new year completely inspired, don’t we? A new year represents new opportunities, second chances, and the support of twelve long months. With these ideals in mind, we’re ready to be and do it all. We ‘hit the ground running’ by setting important goals and creating strategies for achieving them.

[Related: The Key to Setting Your Business Apart From the Competition]

But then, somewhere along the way, distractions happen. Before we know it, we’ve only got a few months left to do what would have definitely taken twelve. In the fourth quarter, this dismal realization can seem kind of overwhelming. However, there is a silver lining. If we shift our expectations and commit to specific results, we can put achievement in proper perspective–even in the final few months of the year.

Here’s how:

1. Respect the discreet window of time. Without the benefit of charting your progress over the course of an entire year, you will need to reset your expectations around results. Specifically, this means evaluating the quantity and quality of results that can be achieved in a shorter time period. A productive way to accomplish this is by sifting through your goals to determine which opportunities are ripe for an intense, yet finite period of focused efforts. This kind of analysis will require you to be selective in category as well as scope. So, assess and prioritize without skimping on the quality of the desired outcome.

2. Know the difference between a result and a strategy. We create goals because we have a specific result that we seek to achieve in mind. A goal is not an abstract desire; it is a specific outcome that can be measured. The ‘how’the way forward towards achievement–is the strategy. Naturally, it contains fundamental steps and processes, all geared towards getting us closer to our desired result. Unfortunately, however, these concepts are often confused. People mistake strategies for results and get bogged down in the ‘muck and mire’ of constant striving with nothing to show for it in the end. To avoid this misstep, be clear about your results and differentiate them from the strategies that drive them.

3. Commit and raise your standards. When time is of the essence, a new level of commitment is required to achieve results. That means raising your standards.  It won’t be easy, but must be done if you’re serious about achieving results. Committing means becoming laser focused on the goal(s) at hand and removing distractions likely to sidetrack you. It means prioritizing your efforts, even when competing interests encroach on your time and resources. It means saying no to distractions (across the board), getting less sleep, and working longer, harder, and smarter than you’ve worked before. But in the end, the difference will be having something tangible to show for well-placed efforts–a piece of gold that represents achievement and new possibilities for the future.

Are you contemplating setting a few important goals between now and the end of the year? If so, ‘hat’s off.’ Use these tools to develop your motivation and decide to close out the year stronger than you started it. The bonus? You’ll also create an important momentum for setting and achieving all of your goals in the coming year.

To your success.

Karima Mariama-Arthur, Esq. is the founder and CEO of WordSmithRapport, an international consulting firm specializing in professional development. Follow her on Twitter: @wsrapport or visit her website, www.wordsmithrapport.com.

Newsflash to Entrepreneurs: If You’re Not Focused On Profitability, You’re Not Doing Your Job

So, how do you actually make money? What are you selling, who are you selling it to, and what is the amount of profit you make on each transaction?

Sounds like the kind of straight-forward questions that any business owner could answer. However, year after year, as a veteran judge of elevator pitch and business plan competitions, I see entrepreneurs absolutely fall apart in response. Believe it or not, more than a few are actually offended: Why would I be motivated by something as selfish and base as making money? I’m not greedy. I’m trying to create jobs for the community and be an inspirational role model for the kids.

Each year there are many entrepreneurs who start businesses with no real plan for actually making money. Some have been pushed into entrepreneurship as the income source of last resort, perhaps after being fired or laid off. They’re so busy just trying to survive that they never quite get around to figuring out whether they are actually making money or not—or even if they can—until it’s too late.

[Related: Check Yourself: 3 Questions Entrepreneurs Should Never Stop Asking]

Others are so in love with their business idea, product, or service that they assume that making money will be a natural result of their passion, hard work, good intentions and positive thinking. Often, these are the same entrepreneurs who gleefully state that their product or service has no competition (wrong) and assume that their revenue will grow exponentially while costs will stay flat or even decline (also wrong). To them, the test of profitability represents the pin that could burst their bubble—a reality check to be avoided at all costs.

(With rare exception, the only businesses or services with no competition are the ones that nobody wants—even if they’re needed. In fact, proof that your idea is viable, even if you are the first one to think of it, is that competition will come seemingly out of nowhere to feast on the market demand you’ve discovered or created. So cut the “we have no competition” crap.)

Sustained profitability is never a happy accident or a result of serendipity. It only comes with intention, planning (including analysis and testing of your results in order to refine your profit-making processes) and execution, if at all. If your answer to the question, “how do you turn a buck?” is a series of errs, uhms and ahhs, or a bunch of convoluted jargon, your business concept is muddled. Trust me: bankers, investors and other potential sources of debt or equity capital will not be impressed. A business without a profitability plan is like a race car without an engine—it might look fast, but it only goes downhill.

If you can’t explain in just a few, easily understood sentences, exactly how your business makes money—to the dollar, based on real numbers—chances are you’re not making any, or won’t be for long. This is why having an elevator pitch for your business is so important—not only in case you run into Michael Lee Chin or Robert L. Johnson on the way to the 30th floor, but so you are crystal clear in your own head about your money-making premise and how it works. This kind of clarity is critical to keeping your business on course and your employees, customers, and investors on the same page with your goals and vision.

An entrepreneur without a profitable business will have a hard time creating jobs, being a great role model for others, or doing any of the things that successful owners of money-making enterprises can afford to do. It’s hard enough to make money when you are trying your hardest—facing tough competitors, fickle consumers, and an unsympathetic economy. Can it be done without really trying? It’s possible, but not likely, and not for long. Better to adopt the attitude that your number one job as an entrepreneur is to make money. To achieve sustained entrepreneurial success, profitability cannot be an optional exercise.

This blog is dedicated to my thoughts about money, entrepreneurship, leadership, mentorship and other things I need to get #OffMyChest. Follow me on Twitter at @AlfredEdmondJr.

Live vs. Lean Planning: Looking Ahead While Scaling Back





Plan ahead

The recession taught us a lot about business. Small replaced “too big to fail,” startup culture replaced corporate culture and lean replaced elaborate business plans. Streamlining your business doesn’t mean approaching the future blindly, however. Remaining lean and planning need not be mutually exclusive. At Palo Alto Software, we used principles of lean planning and lean innovation to help us transition from a company that developed and sold Windows software to one that develops and sell a SaaS, subscriptions and online applications.

We transitioned from selling our flagship Windows product, Business Plan Pro, to selling an online product without taking on debt or raising outside capital. To do that, we had to plan the launch and initial sales process very carefully. Because we did not know how customers would react, we needed to be able to be nimble and change course quickly if need be. Planning allowed us to have a plan in place that focused on top metrics to measure, and then quickly adjust the plan as we gathered more data. It let us quickly test some theories about conversion rates, lifetime value and churn, and see how they would impact our business and our cash flow.

“Failing fast” may make it easier to identify problems, but planning ahead enables you to peer into the future, spotting potential issues and taking the “fail” part out of the equation. Live planning isn’t an elaborate 12-step process, either.  Accomplished in two stages, live planning is a habit rather than a single act that ensures long-term success.

Step 1: Plan

Completing a business plan doesn’t have to be an arduous or time-consuming process. For the description of your business and goals, think of yourself as a journalist. Detail the who, what, where, when and why of your business and what you hope to accomplish. If you’re active on Twitter, embrace the same sort of brevity with which you’d compose a tweet in summarizing your objectives. The resulting language will not only serve you well in tracking business goals, but also in communicating with potential investors.

As for the financial component of your plan, you’ll want to create an expense budget, a sales forecast, and a cash flow forecast, complete with goals. While that may sound overwhelming, your goals will dictate your sales forecast and keep you on track.

In working with small businesses, we’ve found that the main reason they tend to fold is that they run out of cash. With proper forecasting, running out of cash can be an entirely preventable problem.  I’ve worked with various small businesses in Eugene, Ore. where Palo Alto Software is based. It is surprising how many of them have very little understanding of the key performance indicators that affect their cash in the bank. I worked with a nonprofit organization that offers kids’ programs year round, but makes most of its money from programs in the summer from summer camps they offer. In helping them plan for some major growth, they realized that they were not understanding all the costs involved in expanding the camp. By putting together a forecast, that included a breakdown of the costs per new program added, they were able to stick to adding only new programs that brought in the most money.

I always encourage small businesses to work with their accountant or mentor to identify potential missteps. Combine that with some lean planning, and you will see how much easier it is to make decisions about your business.

Step 2: Track

Tracking should be a daily activity. It is for us at Palo Alto Software. Just as you habitually check Facebook or your email in the morning, you should be checking your numbers to see where you stand against your goals and how the day’s activities might influence your stats. We not only track as much as we can, but we also disseminate the information to all employees via weekly tracking meetings, and weekly emails to everyone about where we are compared to our forecast and budget. The best live plans and dashboards enable you to check your current metrics against goal and against past months, quarters or years. Make sure you’re tracking revenue, expenses and net profit, not just cash in the bank.

Beyond daily tracking, schedule milestone check-ins to evaluate the big picture. Crafting a living plan that includes both a written and financial component is important. Regularly, you’ll want to check financials against goal. Monthly or quarterly, determine whether your business is living up to your vision. Are you delivering the experience you want for your customers? Your employees? Yourself? Are you collecting payments as you planned, or buying inventory as you planned? Qualitative and quantitative metrics need to be in balance.

When I worked with the non profit that runs kids programs, I helped them set up ways to track families that took multiple programs, and identify them as the most valuable “customers.” These families then received different email messages and information, as they were most often the families that also help spread the word about the programs.

It’s easy to get wrapped up in the day-to-day tasks of running your business. Without a solid plan of where you want to go, or a way to check in, and track how far along that path to your goals you are, you may intend to take time out to evaluate, but never get around to it. Planning and tracking combat procrastination and take very few resources or time and as a result, coexist perfectly with lean.

Sabrina Parsons has served as CEO of Palo Alto Software since 2007. She and her husband, Noah, founded a UK software distribution company in 2001 that was acquired by Palo Alto Software in 2002. As CEO, Sabrina is a staunch supporter of entrepreneurs and entrepreneurial organizations. 

Image Credit: Shutterstock.com





The post Live vs. Lean Planning: Looking Ahead While Scaling Back appeared first on Under30CEO.

What’s in the Stars this Month for Entrepreneurs?

For ages, entrepreneurs have read tea leaves, studied palms, examined numbers and, of course, turned to the stars to glean insights on how to handle tough business choices.  Should they bring on a business partner or run it solo? Do they need to raise additional capital or bootstrap? Sell, merge, go public?

While checking out your horoscope for business advice might sound like hocus pocus, the act of simply thinking about your business and your options is invaluable — even if it means reading between the lines and trying to translate what planetary alignment means for you.

For this month, we celebrate the Virgo (born between August 22 and September 23). The sixth sign of the zodiac tends to pay great attention to detail, is efficient, can be a bit critical of others, yet, looks to lend a helping hand when needed.

Check out what the stars have in mind for Virgos this month, along with other astrological signs:

10 Questions to Ask if You Want to Create a Winning Business Plan

The stodgy business plan—that multipage printed document that entrepreneurs used to hand out at meetings with venture capitalists—has gone the way of the typewriter and Rolodex. These days, entrepreneurs are expected to lay out their strategies in slick Power Point presentations, complete with colorful pictures and informative charts.

But while it’s true that the format of the business plan has changed, the substance most certainly hasn’t. If you’re headed out to raise capital for your company, you’ll still need to address key issues about the size of your market, the experience of your team, and your long-term financial goals. In the wake of the financial crisis, persuading potential financiers that your plan has legs will be especially challenging.

Here are the key questions you should ask yourself before you fire up Power Point and start preparing your slides.

1. Have I proven that I’m filling an unmet need in the market?
As the economy still struggles to turn around, entrepreneurs are under pressure to gauge the strength of their market—in detail—before they go out and raise capital. Try test marketing your product on a small scale so you can realistically forecast how much you can sell in the future, suggests Edward Hess, professor and Batten Executive-in-Residence at the University of Virginia Darden School of Business.

“Entrepreneurial funding is moving away from formal business plans to having to prove that customers are actually going to buy what you’re trying to sell,” Hess says.

2. How will I acquire and retain customers?
You’ll also need to prove that your idea isn’t a fad.

“Understanding how customers are going to be found, acquired and retained is critical,” says Alison Berkley Wagonfeld, operating partner for Emergence Capital Markets in San Mateo, Calif. “Some companies might say, ‘We’re going to buy search words,’ but once they get somebody to their website, how are they going to sell them a product?”

3. Why am I better than the competition, both current and future?
If you have direct competitors, you’ll need to devote several slides to depicting exactly how you plan to differentiate yourself. If you have no competitors, you need to explain that, too, Wagonfeld says.

“It’s always great to think you have no competitors, but the flipside to that is why has no one else found this opportunity?” Wagonfeld says. “You may have a different expertise or a unique technology,” but you have to explain why you think you can retain that competitive advantage.

4. What’s the story behind my financial forecasts?
One common mistake entrepreneurs make in their business plans is to project that they will capture a certain percentage of the overall market for their product without fully explaining how they intend to do that, says Mark Steranka, director of planning and policy for Moss Adams’ Consulting Group in Seattle.

“You can’t just play a numbers game,” Steranka says. “What will the key decisions be along the way? What will the key strategies be? You need to do a stellar job of really explaining how you’re going to get from point A to point B.”

5. What elements of this plan can I depict visually?
The rise of Power Point as the format of choice is forcing entrepreneurs to make their pitches with fewer words and more pictures. Some parts of your business easily lend themselves to graphic presentations, such as financial forecasts that can be shown in bar charts. But you might also consider using graphics, photos, and illustrations to demonstrate how your product works or how it differs from the competition.

6. Should I recruit a few key advisors?
Bryan Pearce, venture capital advisory group leader for Ernst & Young in Boston, says every startup should assemble an advisory board—a small group of industry leaders who can complement your skill sets and help you formulate your plan.

“An advisory board doesn’t carry the legal weight of a formal board of directors, but it can be very helpful to the founding team in advising them on how to get the company going,” Pearce says. The makeup of your advisory board should be included in your business plan, too. “If good people are willing to lend their names and help to get you going that speaks volumes about the potential of the business idea.”

7. How am I going to spend my investors’ money?
With the economy still sputtering, potential investors are going to want details about how you plan to stretch their dollars, Pearce says. Emphasize your strategy for holding down your cash-burn rate, and spell out exactly what you expect your costs to be for the first year or two.

8. Does my staffing fit the current state of my business?
Many entrepreneurs make the mistake of thinking they need to have all the key managers in place before they go out and raise funding, but that’s not necessarily true. If your product is in the prototype phase, for example, you don’t need a director of sales and a full sales force just yet. You should describe your plans for hiring those people, and include them in your cost estimates, but you’ll want to show that you’re taking a conservative approach with your funding and not over-staffing your company beyond your current operating needs.

9. What’s the exit plan for the business?
Potential buyers will want to know how they’re going to earn a return on their investment. If you hope to take your company public someday, your business plan should point to examples of other companies in your industry that have done so successfully.

If you think your company is a good candidate for an acquisition, try to strike up partnerships with potential acquirers, and include those names in your business plan, Pearce advises. “It’s always good to have an understanding of who potential buyers might be, and to show that you’re starting to create relationships with them,” he says.

10. What is my personal exit plan?
If you’re a 45-year-old founder with a dream of retiring at 55, don’t be embarrassed to reveal that in your business plan. Potential investors will want to know that you’ve defined your personal goals and aligned your company with them, Steranka says. For example, if you don’t plan to stay with the business for the long haul, your business plan should include a succession strategy—a specific strategy for developing talent within your organization, so the transition to a new leader is seamless.

“Investors want to know the truth,” Steranka says. “While transparency up-front could turn away a potential investor, it’s going to attract the right investor.”

Why Your Lawyer Might Be Wrong For Your Business

Any of you that have ever hired a lawyer know that if you really want to screw up one of your business deals, a potential litigation issue or the future planning of your business, all you need to do is hire the wrong lawyer.

Too many entrepreneurs go into the selection process with the wrong pre-conceived notions and set of qualifications for the next critical member of their team. The decision to hire the correct lawyer should be considered carefully and using realist criteria.

Here are four of the biggest mistakes entrepreneurs make when choosing a lawyer:

1. Hiring a Jack of all trades. This is a mistake that even the experienced business owner will make. As many of us know, there are all sorts of specialists in the medical profession and the same thing applies to the law. If you are doing business or tax planning, use a business lawyer and get your CPA in the mix as well. If you have a fight brewing, consult with a litigation attorney. A general attorney or advisor can play ‘’quarterback’’ and give you sound advice, but when it’’s time to get into the details, use a specialist.

2. Choosing the cheapest lawyer you can find. This is a classic strategy that will ultimately cost you more in the long run after you find the right attorney. You may think you are saving money in the first or second meeting with that low hourly rate or a flat fee promise that rivals an online service with unlimited legal consulting. But this attorney will cost you a lot more with misdirection, and wasted time and money. Remember the old adage: “You get what you pay for”. This applies with the law as well.

3. Paying a big retainer up front without a second opinion. This is a dangerous mistake and can be very difficult to undo and get your money back. A lot of entrepreneurs never get a second opinion and out of fear or intimidation, make a rash decision. There are many honest and skilled lawyers out there who can take a smaller retainer up front and bill as they go. If the amount they are asking for makes you feel uncomfortable, heed that prompting and interview some other lawyers before making a decision.

4. If it sound too good to be true, it probably is. We’d all rather hear how incredible our case or project is and how it’s the “perfect slam dunk.” However, nothing is always clear-cut and if a lawyer is sugar coating it you should be able to tell. Be careful when your lawyer doesn’t speak realistically about your own situation and the mistakes and problems you are facing. Don’t let yourself get pummeled in court. Lawyers can overpromise and under-deliver.

Consider taking recommendations from others who have already found affordable lawyers specializing in your area of expertise.

If you have a bad experience hiring the wrong lawyer, don’t give up interviewing and networking with others to find the right advisor. Just like in every profession, there are winners and losers. Sometimes it take a little work to find the winners, but it is certainly worth it in the end.

Steve Blank on Building Great Founding Teams

A version of this article previously appeared at SteveBlank.com.

There’s been a lot written about the individual characteristics of what makes a great founder, but a lot less about what makes a great founding team and how that’s different from a great founding CEO. I think we’ve been imprecise in defining three different roles. In doing so we’ve failed to help founders understand what it takes to build a great founding team. Here are my definitions:

Founders — the idea:

A Founder is the one with the original idea, scientific discovery, technical breakthrough, insight, problem description, passion, etc. A founder typically recruits co-founders and then becomes part of the founding team involved in day-to-day company operations. (However, in some industries such as life sciences, founders may be tenured professors who are not going to give up their faculty positions, so they often become the head of a startup’s scientific advisory board, but aren’t part of the founding team.)

A couple of caveats about founders with “ideas.” It’s important to differentiate between ideas that have been or can be patented and ideas thought up late at night in a dorm room. One of the hardest concepts for my students to grasp is that “an idea is not a company.” The reality is that in most cases, without the company to commercialize it, the idea is worthless (except to a patent troll.)

Even if they become part of the founding team, it’s not a given that the founder, having come up with the idea has a “guaranteed” leadership role (CEO or VP) in the new company. For some entrepreneurs, this idea that the founder is not necessarily the CEO, is a surprise. When I hear, “What do you mean I’m not CEO? It’s my idea!” I get nervous that the founder is clueless about what makes the founding CEO special, and what else it actually takes to build a company. (Read on to see the difference in the roles.)

Founding Team –- the rock on which to build the company:

The founding team includes the founder and a few other co-founders with complementary skills to the founder. This is the group who will build the company. Its goal is to take the original idea and search for a repeatable and scalable business model — first by finding product/market fit, then by testing all the parts of the business model (pricing, channel, acquisition/activation, partners, costs, etc.)

In web/mobile startups, the canonical view is the founding team consists of a hacker, a hustler, and a designer. In other domains, the skill sets differ, but the key idea is that you want a team with complementary skills.

There’s no magic number about the “right” number of founders for a founding team, but two to four seems to be the sweet spot. One of the biggest mistakes in assembling a founding team is not thinking through the need for skills, but instead settling for who’s around. The two tests of whether someone belongs on a founding team are: “Do we have a company without them?” and, “Can we find someone else just like them?” If both answers are no, you’ve identified a co-founder. If any of the answers are “Yes,” then hire them a bit later as an early employee.

Key attributes of an entrepreneur on a founding team are passion, determination, resilience, tenacity, agility and curiosity. It helps if the team has had a history of working together, but what is essential is mutual respect. And what is critical is trust. You need to be able to trust your co-founders to perform, to do what they say they will and to have your back.

Most startups that fail over team issues fail because co-founders hadn’t dated first, (spent time together in a Startup Weekend, worked together in an incubator, etc.) but instead jumped into bed to start a company.

Everyone has ideas. It’s the courage, passion and tenacity of the founding team that turn ideas into businesses.

Founding CEO –- Reality distortion field and comfort in chaos:

Idealistic founders trying to run a venture with collective leadership, without a single person in charge, find that’s the fastest way to go out of business. Speed, tempo and fearless decision-making are a startups strategic advantage. More often than not, conditions on the ground will change so rapidly that the need for immediate decisions overwhelms a collective decision process.

The founding team CEO is the first among equals in the founding team. Ironically they are almost never the most intelligent or technically astute person on the team. What sets them apart from the rest of the team is that they can project a fearless reality distortion field that they use to recruit, fundraise, pivot and position the company. They are the ultimate true believers in the company and have the vision, passion and skill to communicate why this seemingly crazy idea will work and change the world.

In addition, the founding CEO thrives operating in chaos and uncertainty. They deal with the daily crisis of product development and acquiring early customers. And as the reality of product development and customer input collide, the facts change so rapidly that the original well-thought-out product plan becomes irrelevant. While the rest of the team is focused on their specific jobs, the founding CEO is trying to solve a complicated equation where almost all the variables are unknown — unknown customers, unknown features that will make those customers buy, unknown pricing, unknown demand creation activities that will get them into your sales channel, etc.

They’re biased for action and they don’t wait around for someone else to tell them what to do. Great founding CEO’s live for these moments.

Figure out who you are:

Many founding teams fail because they’ve never had the conversation about founder, founding team and founding CEO. Spend the time and take stock of who’s on the journey with you.

Lessons Learned:

  • Founder, Founding team, Founding CEO all have word “founder” in them but have different roles
  • Founder has the initial idea. May or may not be on the founding team or have a leadership role
  • Founding team — complementary skills — builds the company
  • Founding CEO — reality distortion field and comfort in chaos — leads the company

Worthless, Impossible and Stupid? Why Contrarian Business Ideas Make It Big

If everybody looks at you like you’re crazy when you tell them your business idea, congratulations. You might be on your way to becoming a bona fide entrepreneur.

Just being young, innovative and your own boss does not make you an entrepreneur, says Daniel Isenberg, an adjunct professor at Columbia Business School. And if everyone thinks your startup idea is wise and logical, then you are almost certainly not one, he says.

“In order to create and capture extraordinary value, you almost always have to be contrarian,” says Isenberg. “You enter the market when everyone else is leaving.”

Ideas of truly successful entrepreneurs are often at first considered ridiculous by the majority of the public, Isenberg says in his new book Worthless, Impossible and Stupid: How Contrarian Entrepreneurs Create and Capture Extraordinary Value (Harvard Business Review Press, 2013).

Often, self-employed people call themselves entrepreneurs because they are not working for a boss, says Isenberg. But business ownership is not sufficient to define an entrepreneur. “They may just be sort of plodding along,” he says about the interviews he conducted with entrepreneurs from Alabama to Islamabad.

Related: Searching for Business Ideas? 9 Industries that Obama Policies Will Actually Help

And while Isenberg sees nothing wrong with being a small-business owner, he says only 1 to 5 percent of small-business owners are truly entrepreneurial. The word “entrepreneur” is often used to describe intentions, he says. For example, an “entrepreneurial thinker” is someone who identifies opportunities or approaches a task creatively.

Worthless, Impossible and Stupid? Why Contrarian Business Ideas Make It Big

But to be a true entrepreneur, you must not only think about ideas; you must act on them, according to Isenberg. “It is about actually generating results that are more than the market expects,” he says.

Ironically, a contrarian entrepreneur can’t be identified until after his or her idea has been absorbed or rejected by society, says Isenberg. “In a sense, it is the entrepreneur’s job to surprise us, to surprise the market,” he says. “There is a certain aspect of entrepreneurship that is unpredictable.” That unpredictability makes it difficult to develop public policies to support entrepreneurship, adds Isenberg.

Related: White House Plays Offense: Says Immigration Reform Will Turbocharge Entrepreneurship

For entrepreneurs, Isenberg says the key takeaway of the book is to have confidence and get used to being an outlier. It’s important to learn to cope with the adversity, resistance and derision of the market, says Isenberg. “This is a normal part of the entrepreneurship experience.”

There are no resume requirements for who will make a successful entrepreneur, but there are a few similar traits of true entrepreneurs, says Isenberg. Namely, they tend to display a willingness to think independently, work hard and persevere, and seek excitement. Most of them held jobs when they were young, so learned the value of hard work early on.

While the common characteristics of entrepreneurs are noteworthy, they don’t define every entrepreneur, says Isenberg. Entrepreneurs are born all over the world, come from different socio-economic backgrounds and start up in a variety of industries. “It’s not about Steve Jobs and Silicon Valley. It’s about the kind of entrepreneurship you can see anywhere, whether it is Slovenia or Brazil or China or Iceland,” he says.

Related: How a Coffee Lid Turned into a Million-Dollar Idea

Lessons From Successful Entrepreneurs on How to Beat the Competition

Cliff Shaw had already founded and sold three companies in the genealogy space, all of which had to cope with the supersize competitor he confronted once again when he started Mocavo in 2011. Based in Boulder, Colo., his latest venture bills itself as “the world’s largest genealogy search engine.” But to get there, Shaw had to devise a business model and pricing scheme that would compete with Ancestry.com, whose 2 million subscribers and 11 billion historical records made it the reigning behemoth in the field.

What’s a startup to do? To distinguish his company from Ancestry’s subscription payment model and content supply, Shaw decided Mocavo would offer a basic service free of charge, with customers providing content. “We originally started as Google for genealogy,” Shaw says. “We’ve now evolved into a giant community of users who want to contribute content online for free.”

Zach Schau, Pure Fix Cycles

Mocavo customers have published newspaper articles, old wills, marriage certificates, even family bibles. Last December the company introduced a subscription service, Mocavo Plus, an enhanced version of its search engine. To solidify Mocavo’s share of the genealogy market, Shaw designed a business that doesn’t compete directly with Ancestry.com but provides complementary services. “To be honest, we don’t think about them very often,” he says, “because we’re pursuing an entirely different model.”

Of course, there’s no single formula for coping with competition. Some startups partner with direct competitors, such as the vineyards from California to New Jersey that have organized cooperative wine trails. Others choose to go toe-to-toe. Some all but ignore their competitors, and some get a leg up by collaborating with an established, noncompeting company. Here are five strategies you can employ to take on your rivals and carve out your niche in the competitive landscape.

Play Nice

In wine country, it’s common for vintners to compare botanical notes on pruning methods or canopy management in their mutual quest to grow a better grape.

“I think the wine industry is a really unique industry in that the more wineries that are in the area, the better,” says New Jersey winemaker Michael Beneduce Jr., who started Beneduce Vineyards five years ago. “It’s essential to be able to collaborate with each other, because that really elevates the quality of the whole region.”

Beneduce recently returned from a two-week trip to visit wineries in Austria, where the climate and soil are comparable to those of northwest New Jersey. Everywhere he went, Austrian winemakers were eager to show off their vineyards and answer his questions. “We don’t see our competitors as competitors,” Beneduce says. “We see them as collaborators.”

Be Bold

Zach Schau knew the bicycle marketplace was jampacked, dominated by global brands such as Trek, Bianchi and Fuji. No matter: In 2010 Schau, his younger brother Jordan and two friends founded Los Angeles-based Pure Fix Cycles, a colorful brand of fixed-gear bikes.

At first Schau figured Pure Fix would be an e-commerce company. But soon he set his sights on Sport Chalet, a 54-year-old sporting-goods chain with more than 50 stores from Utah to California.

Mocavo's Cliff ShawHow does a startup compete for floor space in a regional retail giant? With a lot of hustle, some bodacious innovating and, yes, a little luck. Such as the time Schau chatted with a Sport Chalet buyer at a Las Vegas trade show. The buyer introduced Schau to a “colleague” who had taken a liking to the Pure Fix bikes on display. That colleague turned out to be CEO Craig Levra; before long Sport Chalet was stocking Pure Fix bikes.

But Schau didn’t stop there. Pure Fix continued to rotate the palette of its bikes, which now come in more than 15 color combinations. The company produced a glow-in-the-dark bike and a smaller model for younger riders. And it priced its bikes to sell, ranging from $325 to $399.

Schau’s advice to startups striving to stand out in a fierce marketplace: “Be confident and take risks, because if you’re not going to, someone else is, and someone will beat you to it.”

Fight Back

For Arizona jewelry-maker Sarah Elliott, innovation has been key to dealing with the knockoff products that are ubiquitous in her field. Elliott tries to stay ahead of the competition by creating one-of-a-kind pieces from her signature materials–gemstones, freshwater pearls, copper, brass and sterling and nickel silver–then doing it again and again.

“I take it as a compliment,” Elliott says of knockoffs. “What can I do? I need to come up with something different, to incorporate different methods of making jewelry–that’s how I kind of combat it.”

Startups can take legal steps against knockoffs, says Harris A. Wolin, a New Jersey attorney specializing in intellectual property law. They can send a cease-and-desist order to an offending competitor. If the startup has a patent on a product that is attracting knockoffs from overseas, the startup can seek an exclusion order from the International Trade Commission that will authorize U.S. Customs to seize infringing knockoffs at the border.

Outside of a legal remedy, startups can turn to creative marketing campaigns that highlight a product’s defining feature. When one of Wolin’s clients found itself threatened by an overseas knockoff, it promoted its product as being made in America and further differentiated itself through its service and warranty offerings. “That’s another way to go after a knockoff,” Wolin says. “The goal is to prevent somebody from coming after your business.”

Focus Inward

Steve Blank, outspoken Silicon Valley tech entrepreneur, author, blogger, business-school professor and early champion of the Lean Startup movement, says the only player the entrepreneur needs to be concerned with is the one staring back in the mirror.

“If you’re worried about competitors, you’re already out of business,” Blank says. “The only people who can put startups out of business in the first 18 months are themselves. Competitors really have nothing to do with that.”

However, Blank does not advise entrepreneurs to disregard their competition entirely, noting that while you shouldn’t let them have a major impact on the way you operate, you should keep an eye on what they’re up to. “I love to watch competitors,” he says, “because they typically have better ideas than I do.”

Entrepreneur Andrew Allison says Blank’s book The Four Steps to the Epiphany: Successful Strategies for Products That Win was “basically a bible” for him and business partner Matt Stuart when they founded Main Street Hub, a social media management firm based in Austin, Texas. “It’s a mistake if businesses let competition dictate their vision or their relationship to their customers,” Allison says. “Entrepreneurship is a 24/7 job. And every minute you’re spending agonizing over what your competition is doing is another minute you’re not spending working with your customers or understanding the data to see what next you have to do with your product.”

Hitch a Ride

Sometimes a startup needs to guard against competitors who have yet to show their faces. Lisa Lavin, co-founder and CEO of Anser Innovation in Minneapolis, was sure her company’s new product, a videophone that could enable people to interact with their pets remotely, was the first of its kind. Using a smartphone, tablet or computer, pet owners could even prompt the device, known as PetChatz, to feed their pet a treat.

But even with no direct competition in sight, Lavin wanted to break into the marketplace in a bold way and hold future competitors at bay. To do so, she needed a business plan that would enable PetChatz to gain a competitive advantage within the $53 billion U.S. pet industry. “As a small company, our reach is limited,” Lavin says. “We had to have an edge.”

So Anser formed a partnership with another Minnesota firm, Tuffy’s Pet Foods, founded in 1964. Tuffy’s devised a proprietary treat to be used only with PetChatz, and Anser is leveraging Tuffy’s brand name and distribution channels.

“Even if we don’t have competition today, we will have competition in the future–I can guarantee you,” Lavin says. “Even though we have patents on our products, we know somebody will try to infringe on our patents and come to market. The partnership with Tuffy’s gives us the speed and weight and resources we need to be successful.”

Can I Say That?

“Under the law, claims in advertisements must be truthful, cannot be deceptive or unfair and must be evidence-based. For some specialized products or services, additional rules may apply.”

If you’re planning an ad campaign that sets you apart from your competition, you’d be wise to heed those words, found on the website of the Federal Trade Commission’s Bureau of Consumer Protection Business Center.

There’s no restriction against naming a competitor in an advertisement or directly comparing your products, services or prices to theirs, says New York advertising attorney Andrew Lustigman of Olshan Frome Wolosky. Advertising law simply goes back to that sage counsel you used to hear from your mother: Tell the truth. And for good measure, be ready to back it up. “This is America,” Lustigman says. “You have a First Amendment right to truthful commercial speech.”

If you feel you’ve been unfairly maligned by a competitor’s ad, you could file a lawsuit. But more often these days, complaints over ads are heard by the National Advertising Division of the Council of Better Business Bureaus, which operates as a self-regulatory body ruling on competitive advertising challenges. The division’s stated mission is “to review national advertising for truthfulness and accuracy and foster public confidence in the credibility of advertising.”

Lustigman works with plenty of startups, and he says the biggest mistake he sees in advertising is making a claim without confirming its veracity. “I think there’s a real unawareness of the fact that you need to get your ducks in a row before you go to market,” he says. “If you’re making specific performance claims, you’ve got to make sure you have tests and studies that are reliable, that back up your claims.”

Which goes back to something else your mother used to tell you: Think before you speak.