Today’s guest is Joe Carlen, Co-Founder of Value Guards, LLC and practitioner of business valuations, patent valuations, and marketing assessments. He is consulting for hundreds of entrepreneurs and companies over the past 15 years including Westinghouse and Unicom Technology. Joe is also the author of the book A Brief History of Entrepreneurship and today he shares with us the five mistakes entrepreneurs have made since the beginning of time along with some concrete examples.
Here are the highlights of my conversation with Joe:
5 Mistakes Entrepreneurs Made Since the Beginning of Time
- Imagination over execution
People have very innovative ideas and they fall in love with their product or service but giving less attention to the market and they may not be great at executing their wonderful concept because they’re either not selling it aggressively or they don’t have a market for it.
Phoenicians built the first intercontinental empire. They were very aggressive distributors and salespeople. They can create knock of art and even inferior quality to other civilizations but they would sell more because they have distribution centers and they sell very aggressively.
An industrial revolution in Britain with a whole series of inventor-entrepreneurs who have set the mold for the Steve Job’s of today. They basically invented things that transformed industries. Samuel Crompton had tremendous product innovations but he never panned it properly and he never promoted his invention properly. Whereas there were those who didn’t invent anything but were aggressive salespeople and became extraordinarily wealthy.
In Ancient Rome, Patricians were the noble people and they looked down on hard work as well as entrepreneurship. The slaves then became the entrepreneurial class in Rome and eventually many of them became very wealthy and made their way to nobility. Another example is the early stages of rock and roll.
- Insufficient nerve or confidence
These are the people who don’t have the nerve to make certain leaps. An example that illustrates this is MercadoLibre, the eBay of Latin America. It was started by an Argentinian who studied business school in Stanford and one time he offered a venture capitalist lecturer a ride to the airport and actually pitched his product. Four days after, he got the seed capital for his business. That guy is now a billionaire.
Salesmanship and entrepreneurship tie in very strongly in this situation because learning how to handle rejection and embarrassment can make a huge difference on the entrepreneurial side.
- Insufficient financing
The reason English and Dutch merchant companies were more successful than the French merchant companies is because of financing. They would pool resources and get investors to commit different sums of money and they have a strong pool of investors.
Many entrepreneurs tend to overestimate the early stage sales potential of what they’re doing and tend to underestimate the potential expenses. So you have to be conservative when it comes to financing and make sure you have the requisite resources to make something working.
- Blurring the line between entrepreneur and manager
People who are gifted at innovation are not always gifted as selling, much less managing. Some people with innovator-type personalities just don’t feel comfortable with sales.
Very often, the entrepreneur is the visionary and sometimes let people take it off from there and others are good at coming up with an idea and building the business to a certain point but they’re not consolidators so an administrative takes over.
There are few Steve Jobs in the world who are people that are both great innovators and successful managers. So figure out your strengths and weaknesses and bring on the right complementary people.
Joe’s Major Takeaway:
Make sure your vision has realistic a plan behind it as much as possible. Be able to translate it into something that is practical and has the right financial and human resources behind it.
Check out Joe on www.value-guards.com.
A Brief History of Entrepreneurship by Joe Carlen
The E-Myth Revisited by Michael Gerber
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