This week, I “hang out” with Kenneth Manesse, Sr. – one of the contributors of my book Entrepreneur Mind Hacks.
At the young age of 18, and without any real skills to boast of, Kenneth jumped into the “entrepreneur pool” of business. Through a lot of trial and error, he discovered that many of the things he was doing was taking him far too long to do. His thought process was, “If I could only learn more and do more, then I could earn more and have more.”
But, instead, the harder he worked and the more time he spent on his tasks, the only things he accomplished was getting burned out and discouraged.
That’s when he discovered the importance of putting together a team.
Since then, Kenneth has started six different businesses in four different industries, and each of them began with a core team of key individuals. As Kenneth puts it,
“If you can understand your weaknesses as well as your strengths, and then find other people who are strong where you are weak to be a part of your team, your business will scale much faster.”
But, team building isn’t the only thing to keep in mind. You also need to focus of “Purple Cows”. In other words:
“If you think of your business as a ‘Purple Cow’, as Seth Godin puts it, you will no longer be just a commodity. Now, consider a trip to the grocery store… when you look at the shelves of cereal, you are bombarded with a huge variety of commodities just in that one aisle. So, by default, most of us default in our search process to Price. But, when you simply hunt for the cheapest price on everything, you race toward the bottom. The good news of this is that you will most often win the race! The bad news is that you are perpetually at the bottom. However, if you establish yourself as a “Purple Cow”, you find a way to stand out, become noticeable and remarkable, and find yourself at the top!”
So, price isn’t the only differentiator when it comes to what you have to offer. In fact, when it comes to your main draw, it should be one of the last things you consider.
Now, Kenneth’s portion of the book was titled “Who Wants to Jump In?”, where he writes:
“We often hear the following question that is asked of successful entrepreneurs, ‘How did you come up with your business idea?’ The real question is not how great the business idea is or was, but how great was the business opportunity?”
This all makes me wonder, what is the difference between an idea and an opportunity?
Firstly, how many times have you heard someone exclaim, “I have this KILLER idea!” Well, as Kenneth puts it, that killer idea is probably going to kill their savings, energy and other resources. Unless you fervently test a killer idea, it is not an opportunity.
One thing that Kenneth is noticing amongst those who are jumping into the entrepreneurial pool is the need to look at the various ideas out there and discern which ones are opportunities that can be scaled.
In business, we have three phases: The start up phase, the speed up phase, and the scale phase. In order for a business to scale, it has to have a big enough market share so that the business can continue scaling and growing. This is partly what contributes to making a business move from good to great!
It is in this scaling process where 90% of business owners stall.
Of the businesses that pass their five-year mark, 95% of them will never grow beyond five employees. This means that of those entrepreneurs, most are working 60-80 hours each week, have created a job for themselves that they don’t particularly like, and most get burned out and want to quit.
Only about 5% actually go on to join those who make over $1 million.
That tiny slice of entrepreneurship is what most people dream about, but the reality is that 95% of them never achieve it, largely because they don’t secure some critical steps before they venture out into their business.
So, the starting point for entrepreneurs should not be coming up with the next “great idea”, but instead “discover the next great opportunity”.
Opportunities have “data driven decisions”. This shows that the entrepreneur has done their homework and data drives their decisions, not their emotions.
You see, when an entrepreneur looks at the data in regards to the marketplace, the competition, and their own differentials, they can derive a quantitative market share.
In other words, if you want to become a millionaire, solve a problem that a million people have and are willing to pay a dollar for your solution.
The problem is that too many entrepreneurs prefer to gloss over or even ignore the data. It often takes too much time to drill down into the information.
Yet entrepreneurship, at its core, is solving people’s problems and in exchange for that, these people will give you something of value… their hard earned dollars. So, the question instantly rises: is your solution to their problem valuable enough to them to give you money for it?
All this ties to Kenneth’s metaphor of “Who Wants to Jump In?”, as a word picture of checking to see if there is water in the pool before you jump in. Too often, we see a “pool” and jump in without checking to see if there is water (or a profitable market share) waiting for us.
But, as Kenneth writes, “if you find the need, you will find the niche that you will be able to sell to”. But, how can we find those needs?
The lucky thing for today’s entrepreneurs is that we now have this thing called “Google”.
If you simply start a Google search with the phrase “how can I…” or “how do I…” and then finish it with whatever business idea you may have, you will see on the search page how many people are also searching for this same information. This is just one of several quick and easy tools that offer entrepreneurs even more data to learn how many people are searching to have this particular problem solved. In fact, some of these tools will drill down even deeper, letting you know how many people on a daily basis are trying to solve that very problem. These types of “data digging” will let you know how well your business may or may not serve your market and how fast you can scale. If only a handful of people are looking for that particular solution, you will have a hard time growing that opportunity, and it will take a lot of time and money to scale.
Most people don’t realize this, but marketing is NOT selling; and selling is NOT closing.
These are actually three very unique things.
When we go to the marketplace and start marketing, we begin by asking “Who can say that this is of value?” (whatever your this may be). Asking this question will establish who your buyers are. Only after you can determine who your buyers are can you begin your selling process. The selling process positions you as the person who has the skills, abilities and talents to solve their problems faster and more efficiently, giving them a benefit that they want and need. Once the people within your marketplace understand that… only then can you close.
Other tools that can be helpful as a first step is a “Keyword Tool Dominator”. This gives you the ability to learn all of the search terms and download them into a .cvs file that you can take into Google Adwords and before you know it, you will have the greatest number of people within the marketplace you’re looking for… all within a few short minutes.
Now, consider the show Shark Tank. Kenneth loves the show and loves to watch the eager entrepreneurs pitch their ideas. But, inevitably, at some point in their pitch, one of the “sharks” will ask them, “What are your sales?” The reason they ask this question is not to find out how much money the person is making so far. It’s actually to determine whether or not this person possesses an idea or an opportunity.
Have they gone to the marketplace and learned if the people there think their idea holds value?
You see, no one wants to go into business and spend five-to-ten years in the start-up or speed up phase. No one has enough resources or energy to spend that kind of time without scaling.
Switching gears a bit, Kenneth also has some golden nuggets behind choosing the business road you want to travel on:
“When you follow your passion, what ends up happening is this: you want to work in that which you are passionate. That’s great. But that’s not a business model. A business model creates the systems, and then have other people work in your business. To do this, you can’t work in your business, you must work on your business. No business will scale unless someone is working on the business. So, if you are going to spend all your time working in your business because it is what you are passionate about, then entrepreneurship is not for you.
On the other hand, if an entrepreneur lists everything that their business opportunity needs to do in order to scale, and puts together a team to take care of these items, then every item on that list that doesn’t have a team member’s name next to it becomes YOUR job. Then, your business becomes your boss and it will change you. You will find yourself making sacrifices that you hadn’t even considered before, including your time, resources, and family.”
Your spouse and kids can tolerate a certain level of separation as you start out in the start-up phase, but before too long, they begin to feel worth less than the jobs that you are doing and not long after that, they begin to feel worthless altogether in your eyes.
The bottom line to scaling, according to Kenneth, is not to think of a specific personnel number or even income level; but to get your business to a point where it is running without you having to run it. Put the right systems in place so that the systems run properly and the right people in place to manage the systems.
When done right, this all results in the freedom you long for.
But, only 5% of entrepreneurs find this freedom. The only 95% continue to grind away and fall short of scaling properly.
But, what is a good system?
A system is simply a “way something is done”. But, if the system is not in writing, it doesn’t exist, nor is it transferrable. Instead you have to sit with them and hold their hand throughout the system’s process. You simply cannot assume that people will understand your system, unless it is clear and relatable. This doesn’t matter if it’s a business process or making a peanutbutter-and-jelly sandwich.
You can learn much more from Kenneth at mespecialist.biz, or find him on LinkedIn, Facebook or Twitter… he’s everywhere!