The Dirty Secret Of Entrepreneurship: Love The Grind Or Don’t Bother

Nick Petri

The problem with the Internet startup craze isn’t that too many people are starting companies; it’s that too many people aren’t sticking with it.

-Steve Jobs

entrepreneurshipWhen I think of entrepreneurship, the first things that come to mind are extravagant launch parties, multi-million dollar rounds of funding at outrageous valuations, and ringing the bell at the NASDAQ on the morning of your IPO.

The glamorous milestone events are what make entrepreneurship and venture capital so appealing to so many people.

Most serious entrepreneurs are fully aware that lots of companies don’t make it that far, and that you have to be mentally and economically prepared to go belly up. Whether it’s 4 out of 5, 9 out of 10, or 99 out of 100, we’ve all heard some stat about how many startups fail. It’s no secret that it’s a risky business.

But there’s also a third possibility, one that gets far less attention than either immediate success or failure.

It’s that your company will grow slowly, and that success may take many years and a lot of hard work.

There’s no stat for this kind of trajectory, but it’s definitely much more common that the immediate success stories like Instagram. It may even be more common than companies that burn out after their first year.

It’s also a prospect that, to many, is more frightening than swift failure. If you’re attracted to the exciting, dynamic nature of the startup world, you likely aren’t incredibly interested in doing the same thing for 5+ years while making incremental progress. That’s what working for a big corporation is like, and escaping that culture is probably the reason you started your own company in the first place.

Still, it’s a possibility you absolutely have to be prepared for if you enter this world. For the vast majority of founders, much more of your time will be spent addressing the unexciting minutiae that characterizes employment at a small company than making strategic decisions, meeting with big shots, and grabbing headlines. Once the luster of being part of something new and exciting wears off, the reality sets in.

Entrepreneurship is a grind.

That’s particularly true if your company isn’t an immediate hit, but it’s also true even if it is. For instance, take Steve Jobs and Mark Zuckerberg, who are revered in the startup community for their big, disruptive ideas.

Is that really who the majority of entrepreneurs aspire to be?

Between the career milestones we all remember are years and years of what was probably often a boring and frustrating grind of hiring and firing lieutenants, groveling to investors, and tweaking and re-tweaking the company’s operations. If that’s what arguably the two most iconic CEOs in the history of technology had to do to get there, don’t for a minute think your road will be any easier.

In order to survive in the role long enough to attain success, a founder has to have an exceptionally long-term outlook, simply love the details of running a business, or ideally, both. While the two CEOs in the previous paragraph certainly did have big ideas, it wasn’t their day job. The stamina and passion it took to improve their companies little by little, day by day, was just as instrumental in carrying them to the pinnacle of their respective fields as were the original concepts they may or may not have written in dry erase marker on their dorm room windows.

What the startup community needs is more Mark Zuckerbergs

And by that, I don’t mean the arrogant 20-year-old who thought he had the biggest idea since sliced bread. I mean the arrogant 28-year-old who stuck with his idea long enough to see it through. 

Image Credit: AllOfThisBeforeEleven


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Leading A Culture Of Innovation [Video]

Mukesh Gupta

I came across this great video where Kevin & Jackie Freiberg talk about how to lead with a culture of innovation. One thought that stands out for me from this video is one question:

What happens if we start a culture of planned obsolescence of all our products?

I think this one question will differentiate between companies that will thrive and those that will lose their way! First, lets listen to what they have to say..

Now, I have tried to summarize what the Friebergs talk about below:

  • A culture of innovation happens when you learn to “be comfortable being “uncomfortable”. This is the zone where you try to explore & surprise yourselves with what comes out of being in that state.
  • Innovation happens when, as a leader, you decide, commit & involve yourself to solve real world
  • Deciding ideas to pursue using the following principles:
    • Is it real?
    • Can we win?
    • Is it worth doing?
  • Address the real problem, which means that you need to dig deep to find the real problem and not address the symptoms (greatly explained by the example of the British Railways).
  • The most important thing for innovation is “a culture obsessed with innovation”. Hopefully, you dont have people “who have quit but stayed”!
  • Create an environment where your employees get engaged and connected or “pockets of innovation”
  • Organizations who try to protect their markets typically end-up losing track as they are more interested in protecting their today against betting for tomorrow.
  • As organizations, be ready and willing to disrupt yourself. It is much better than being disrupted by some other organization.
  • Innovators find new opportunities in the confluence of “either” “or” mindset. Instead try using “and”.
  • What happens if we start a culture of “Planned obsolescence” just like in the food industry. Will that make us more innovative? Will that make us more open to ideas that could potentially disrupt your own organization or products.
  • Diversity is key.

What do you think about the concepts being shared by the Friebergs? Do you agree? What other things do you think are necessary in order to lead an organization with a culture of innovation. Please share your thoughts as comments below or tweet me your thoughts @rmukeshgupta


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Myths in Risk Management: Control Effectiveness — Is the Glass Half Empty?

Bruce McCuaig

Glass Half Empty or Half Full?Control effectiveness opinions are what we expect from auditors. But what does a control effectiveness opinion really tell us?

None of us would conclude a glass is half full without knowing how big the glass actually is. The amount of liquid currently in a glass doesn’t tell you anything unless you know how much liquid the glass will hold.

Similarly, control effectiveness opinions are often based on knowing only half the facts. Many, if not most, of the major corporate failures we have experienced have happened to companies whose external auditors reported effective internal controls. What was missing?

Seeing the Glass Half Full

Let’s consider three scenarios to test my theory:

1.)  A company establishes a policy that all purchases over $1,000 must be supported by at least two competitive bids. An internal audit confirms that the policy is in place and adhered to. No exceptions were noted.

2. ) Concerned about growing traffic volumes in a residential community, citizens urge the city council to place stop signs at every intersection. After the stop signs were installed, police records confirmed that few if any motorists have been charged with running any stop signs

3. ) A pharmaceutical company develops a drug for reducing the interocular pressure in glaucoma patients. (Pressure in the eye is thought to lead to vision loss in glaucoma patients.) Independent scientific testing confirms that the drug is extremely effective and works exactly as advertised to reduce pressure.
Each of these scenarios illustrates a “control” of some sort. I’ve deliberately used some “controls” outside of traditional “internal controls” to better illustrate my point. But are any of these controls effective?Many professionals would proclaim them effective almost by definition. But making a conclusion on control effectiveness based on just the information provided is like stating a glass is half full without knowing the size of the glass.

The Glass Half Empty

Let’s add a little more information to each of the scenarios described above:

1. ) The extra time required to obtain competitive bids delays the development of new products by six weeks and drives operating costs up.

The control objective was to ensure competitive bids were used. But the business objective was to drive down costs and increase efficiency.

2.)  While the stop signs cause motorists to stop, they also cause them to speed up between the stop signs as they attempt to make up for the time lost in stopping. Speeding violations then increase.

The control objective was to make traffic stop. But the community objective was to increase safety.

3.)  The research conducted on the glaucoma medication confirms it indeed lowers pressure, but due to side effects, 20 percent of patients miss 10 percent of their scheduled doses, 10 percent of patients stop taking it entirely, and a very small percent have a potentially fatal reaction.

The control objective of the medication was to reduce interocular pressure. The medical objective was to treat patients effectively.

Based on this additional information, are the controls effective?

If one looks only at the control objectives , the answer might be yes. If one looks at broader business, community or medical objectives, the answer is probably no.

So what lessons do we learn from these examples? Check back here this week as I finish this two-part examination of the effectiveness of controls.

And if you find this subject area interesting, see the other blogs in my Myths in Risk Management Series: Exposing the Flaws of Risk Heat MapsCan Risks Be RegisteredCan Risks Be OwnedYou Don’t Need to Start with a Risk, and Controls Are Bad for You.


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A Roadmap For Integrated Capital Stress-Testing

integrated capital stress-testingOne of the big challenges bank customers tell me about is their inability to manage risk in a truly integrated way.

We are working with one of our North American customers on a roadmap for an integrated capital stress-testing platform.

This involves talking to the bank’s risk managers and IT teams to develop a product that will transform the way they manage and assess risk.

This problem is now urgent for the biggest US bank holding companies, which have to satisfy the Federal Reserve about their capital plans by March.

Dealing with multiple pressures

Banks around the world face similar tests under Basel III to ensure they have enough capital to survive future crises. Increasing costs for capital and liquidity and continuing economic turbulence have put massive pressure on banks’ profitability and margins.

The platform we are working on will have two valuable benefits: it will help the bank to comply with regulatory requirements (Basel III, CCAR) and it will make their business and risk position more predictable, efficient and ultimately profitable.

At the moment, banks often measure and evaluate different types of risk in isolation. Their systems can’t examine the impact of, say, interest rates on an integrated portfolio of credit risk, market risk, liquidity risk and so on in an efficient and comprehensive way. Moreover, a full integration of risk and return is still at a fledgling stage.

Risk and profitability in one platform

Banks need a platform that is both agile and flexible because new regulations are coming along all the time. The solution has to work in real time and handle a mass of data. It needs to allow for integration of risk and profitability data to improve the bank´s overall success. This is perfect for HANA’s in-memory capabilities and the use of predictive analytics.

As well as helping our customer adapt to the next wave of regulation, the system will enable them to prioritise their products and customers to become more profitable.

If a bank knows its overall risk profile and can better predict what happens in the future it can make better choices about which business areas to invest in.

As a banking exec, consider the following questions from your company’s point of view:

  • If there are no technical barriers preventing the adoption of a consolidated solution, are the real obstacles organisational?
  • Is your bank’s inability to evolve from a functionally siloed structure into a company where LoBs play nicely together, the issue preventing you from finding a consolidated solution?

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How Cloud Computing Is Disrupting Businesses Everywhere

Lindsey Nelson

cloud computingCloud computing is a catalyst for faster development, delivery of information, and pretty soon it will become a standard rather than a breakthrough technology.

I’ve written frequently on how cloud is a disruptive technology, but now let’s talk about how it’s altering your business.

Now I know what you’re thinking, this doesn’t or won’t ever affect me. In reality, cloud computing isn’t just changing the role of developers; it is changing the role of your marketers, your sales force. And in the coming years, even the roles that having seemingly nothing to do with cloud will be affected. There are of course the skeptics, but here are a few ways it’ll transform the business.

IT for Everyone

It’s no longer up to the IT department to make decisions on which software will be used. Shadow IT is lurking in every department where 30% of IT spending being done is happening outside the official IT budget. You don’t need any approval; just a credit card and a third party service provider can deliver your department the cloud computing software it needs to run quicker.

Quicker Time to Innovation

Budgets and project timelines are two hot topics, or should I say issues, in the IT and Business world. Who is going to pay for what? And how many man hours will it take? Cloud computing helps reduce both. This in turn gives companies the ability to experiment with wild ideas. It cuts down the time of testing and simulation.

Do It Yourself

We all know the common complaint about the IT department. It takes weeks to get something done, even if it’s critical to the business, because they’re overworked understaffed. When your company has its data stored in the cloud, it makes it easier for the end users to create a front-end of what they want.

Technology for All

Gone are the days of divide between the suits and the techies. Take a look at your kids, nieces, nephews, basically anyone under the age of 16 and you’ll see they are already a part of the technology culture that’s upon us. Our future business leaders will lead with technology like the cloud. Cloud computing gives companies an advantage to do things quicker and with less red tape.

This alteration won’t happen overnight, but it will continue to be a key aspect of the future business. It will affect job descriptions, and if I were you, I’d get on-board. Check out the Business Innovation Cloud section to get up to speed.

Want to continue the conversation? Let’s chat about it on Twitter @LindseyNNelson


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