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The (March) Madness of Entrepreneurship

It’s the season of brackets so I filled out my own. Not for the NCAA basketball tournament. That’s easy. Michigan wins, end of bracket. I’m told that would be “busted.” Mine is a bracket of skills one needs to succeed as an entrepreneur. Game on.

The (March) Madness of Entrepreneurship

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Sweet Sixteen

Opportunity Region

(1) Tenacity over (8) Charm

A slam-dunk. There will be legendary hills and valleys in starting a business and when you’re sitting in a room by yourself going crazy, charm will get you nowhere. Every single day you need tenacity.

(3) Energy over (6) Intellect

Similarly, you need energy day in, day out. You’re a battery cell for the rest of the team. The leverage of your energy is much more useful than intellect. You need intellect, but it doesn’t excite your team.

(4) Salesmanship over (5) Financial Acumen

Salesmanship beats financial acumen because you can hire financial acumen. You can also teach it to yourself. Salesmanship is more innate. However, one fallacy about salesmanship is it’s a type of person. Lots of personalities can be killer great salespeople. It doesn’t have to be an extrovert or someone who likes to backslap; it can be anyone if they can establish a rapport and credibility in their idea.

(2) Resourcefulness over (7) Courage

You can be a successful founder and fall into a puddle every night due to a lack of courage. Courage isn’t an inherent quality. But resourcefulness, especially early on, is essential. It’s trading low value assets for high value assets. Our team at SXSW put this into practice. With a tighter budget than most, they couldn’t throw money at the problem but still had to make an impact. You can judge for yourself how they did.

A more extreme case was our early office furniture. It was largely rejects from failed startups. I’d be driving around on the weekend, find a chair on the side of the road and pick it up. Seriously. Here’s my blog post detailing what our Director of Wholesale, Jason McCarthy, called our chairs: Sh*t on Wheels. We had to work and sit somewhere so we found a cost-effective way to do it. You need that constant bartering mentality.

Preparation Region

(1) Vision over (8) Physical Fitness

This is tougher than people might expect. You’re going to work long hours so physical fitness is either going to suffer or be essential. There are also a lot of startups that are merely iterating or borrowing an idea. In that case, vision isn’t vital. Sometimes it’s safer to be the third company trying something not the first. But vision moves on because the startups I’m personally inspired by have a strong vision. And they tend to endure.

(3) Independence over (6) Organization

When I started The Grommet my brother asked, “If it fails, are you going to be alright?” That’s a hard question and I had to be an independent person to answer it. A year and a half into the business, I had a friend who, in a drunken stupor, belligerently told me at a party (one I had driven five hours to get to), “I wouldn’t touch your business with a ten foot pole!” It took a lot in that moment to dig deep and let my faith in the idea hold strong. That’s why independence wins. You need it when the business isn’t giving you immediate feedback and people, sober or not, try and rattle you. You can always hire people more organized than you.

Independence certainly helps when you pitch your business during the financial crisis.

 

(5) Support over (4) Experience

Now this is a game. In some respects they go together; with more experience comes more support. There’s a general bias toward experience that people are faster when they’re younger. Mark Zuckerberg famously said, “young people are just smarter.” But experience gives you two huge advantages. You have a giant network and resourcefulness largely depends on who you know. Also, making decisions becomes easier because you’ve made similar decisions before. That’s where experience equals speed, despite misleading press to the contrary. Naiveté can be helpful in building a product, but experience is invaluable in building a company.

Having said all that, support wins on a half court buzzer-beater. It means many things to people, but to me it’s a strong foundation. In my work with Harvard Business School, I mentor a lot of young entrepreneurs, and some have given up on their idea. There are three main reasons. One, it just didn’t work. Two, they didn’t have complete faith in it and once they met challenges, they didn’t want to continue.

The third reason is this: a young person starts a business and at first it’s amazing. You’re building a network, reputation, and strong professional life. But as you progress, you hit speed bumps. At an early age, your entire ego is tied to this idea and you might wonder if you’ll be a total loser if you fail. While that’s happening, you may think about building out your life; finding a partner, buying a house, and having children. All of that requires immense dedication. Assembling those pieces is a creation phase, not a support phase. Once you have them, you’ve got a foundation, your identity is no longer solely tied to this business, and you can be more confident and objective. Support’s a vital piece of surviving the often-rocky start to a business and the Sweet Sixteen of an entrepreneurial bracket.

(2) Passion vs. (8) Humor

Plenty of founders don’t have a sense of humor, but every single one has a passion for what they’re doing. The highs are sky-scraping and the lows are subterranean. Without passion, you’ll flounder. Humor’s nice to have and can be valuable for managers and leaders but not necessarily a founder.

It exits early, but humor can do wonderful things for your company.

 

Elite Eight

Opportunity Region

(1) Tenacity over (3) Energy

Being tired or low energy is correctable, not fatal. Tenacity wins because the whole idea of getting up one more time than you fall is critical in surviving.

(4) Salesmanship over (2) Resourcefulness

As an entrepreneur you’re constantly selling. And not just a product. You’re selling advisors, potential team members, or the press on the company itself. As you grow, so does your access to resources while your control of operations shrinks. This leaves more time for selling. Whether it’s speaking to an audience or encouraging your team, you always have to be on.

Preparation Region

(3) Independence over (1) Vision

Not all founders have vision. They can have a great business model but not look deep into the future. In starting a company, all entrepreneurs are practicing an extreme sport. In that regard, they need independence to succeed.

(2) Passion over (5) Support

Some people decide other dimensions of life aren’t as important. They can separate their ego from the business and endure without a support foundation. But it’s nearly impossible to keep going without passion.

Final Four

Opportunity Region

(1) Tenacity over (4) Salesmanship

You can sell and sell and sell your company until you’re blue in the face. But the only reason you keep selling is because of your tenacity.

Preparation Region

(2) Passion over (3) Independence

Another tough one, but to me, passion is stronger than independence. Your independence will help you hold steady, but passion is going to move your business forward.

Finals

(1) Tenacity over (2) Passion

They may seem generic and essentially the same. They are quite similar. But their difference decides it. Passion is a deep belief in an idea or a desire to see something worthwhile happen in the world. I can be passionate in someone else’s idea, but that doesn’t mean I can, or want, to do it myself. Passion is powerful but, as an entrepreneur, it can blind you. When you’re swimming upstream, it won’t win that battle. Tenacity will. Tenacity is the need to fulfill a passion and that feeling is at the core of every entrepreneur.

In the spirit of the season, here’s the basketball version. You have two college basketball players. They’re equal in skill, but not quite NBA-caliber. Regardless, basketball remains a huge part of their life. One decides to use their degree and settle for playing basketball as a weekend warrior. They have a salary, they’re able to spend time with family and friends, and they have more control over their time and destiny. The other player tries out for an NBA D-League team. They make it, but they’re in a new environment away from friends and family, they have to take odd jobs to make ends meet, and they put themselves at a higher risk.

Being an entrepreneur and starting a business is trying out for the D-League. It can be totally irrational. You’re not better or smarter than someone who decided to work for an established company, but you have a burning belief that even with seemingly insurmountable odds stacked against you, you can achieve something great. You have to see it out. It’s the perseverance, sacrifice — the tenacity that keeps you chasing that dream.

The (March) Madness of Entrepreneurship

 

 

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