Unforced Entrepreneurial Errors

Entrepreneurial Errors

In late 2014, I read The Toilet Paper Entrepreneur by Mike Michalowicz.  The central theme is that entrepreneurs need to be good at finding creative approaches to all sorts of problems, an idea I can get behind 100%.

To illustrate, Mike tells a story about sitting on the toilet, doing his business but unaware that the person sitting before him was a jerk and didn’t replace the empty roll of tissue.

Don’t panic, he says, because a waste paper basket is within range:

“Time to examine your newly found treasure trove: A used snot-rag. Good, very good. A Q-tip. Oh, the inhumanity! Useable, if you must. A few cotton balls. OK, you can work with that. And… dental floss? No way! You draw the line at dental floss. So with three sheets of TP, a few cotton balls, a used tissue and a little poking around with a Q-Tip, you walk out fresh as a daisy ready to face the world.”

The lesson:

“In this most challenging, most human moment of all we demonstrate our infinite ability to pull “miracles” out of the trash. When we literally have no option to just get up and walk away, we find a way to get the job done. With three sheets, some wastebasket scraps and possibly a torn up cardboard roll, the impossible becomes very possible.”

Cute, but why do we need to put ourselves in the position of demonstrating “our infinite ability to pull miracles out of the trash?”  Why not take a peek at the toilet paper situation before taking a sit?

I suppose it would be a much less interesting to tell your friends that you almost had to use a Q-tip for a wipe.  It certainly would have ruined the plot line for every episode of MacGyver.

The same question applies to starting a company – why rely on your ability to pull a miracle out of the trash, or from somewhere else, when it is 10x easier to deal with the issue before it EVER becomes  a problem?

Not with me?  Here are a few examples:

1) You go to a startup weekend and team up with a great co-founder.  Everything clicks and you win first prize.  Eager to continue, you agree to split the equity 50/50 (that seems fair, right?) and you get to work.  One problem – your co-founder checks out after six months and you forgot to put a restricted stock agreement in place.

2) You promised to give a new employee 50,000 stock options  but didn’t get them approved (and priced) by the board.   And now you are out raising a round of funding which is going to increase the strike price on the options.

3) Since you are pre-revenue you don’t bother to keep up with financial statements.  You know your cash balance and your burn rate, so that should be good enough, right?

4) You actually didn’t have such a good handle on your cash balance (or your payables) and AWS is turning out the lights on your server.  Too bad for all of your customers.

These are all situations that you do not need to be in.  There will be enough challenges to deal with, many of which will be first-class head scratchers and require you to use all of your creative abilities.  So save your brain power for those situations and try and keep the unforced errors to a minimum.

photo credit:  GorillaSushi