Thanks to MusicOpen for providing public domain recordings of Beethoven.
Hello. I’m Tony Mayo, the Business Owner’s Executive Coach … with one quick idea you can use in your business …today.
There is a certain breed of entrepreneur who creates results orders of magnitude beyond what typical business owners achieve. Before I tell you what makes them special, let’s review the origin of the word “entrepreneur” and distinguish my three types of business owner.
The original entrepreneurs, back in the European Middle Ages, operated by bringing materials to workers in their homes. Cloth to sew into garments, for example, or wax and twine to mold into candles.
As they rode around the countryside delivering raw materials, they also collected the finished goods, which they would sell along the route. This original model is quite close to the behavior of what I consider to be today’s most scalable and repeatable style of entrepreneurship. But, it is still not very common.
The most common and least scalable type, or business model, is followed by founders who don’t so much create an organization as create a job for themselves. They may be independent contractors providing personal services like plumbing or consulting or they may hire a few support personnel to give them more time to personally deliver the saleable service. You could make a very comfortable living this way but it is still a job. When you stop, the income stops. You can’t sell a job, so this kind of company isn’t very marketable unless you find someone who wants to buy the assets and reputation to give himself a job. Many restaurants and beauty salons change hands this way. The key characteristic of this type is that the entrepreneur is also the product. I call this the Star System.
The second entrepreneurial business model is also very common …yet more scalable –and saleable– than the first. These founders also create a company to deliver their personal expertise but consciously choose to attract, train, promote, and empower others to do most of the work. The owner may still be a significant revenue producer but her goal is to own a company that could grow and prosper even if the founder transitioned from being a product into full-time management —or, retirement, maybe even a sale of the company without an earnout period, because the owner is not an indispensable part of that type of company.
The biggest problem with these first two approaches is that they are recipes for overwhelming and exhausting the owner, undermining your health and family, putting you in what I call OWNERwhelm.
The third and final entrepreneurial business model can be the most lucrative and the least exhausting path. It is also the one most similar to the original circuit-riding entrepreneurs of the Middle Ages. I first identified the winning approach of these extraordinary individuals as a result of a dinner I attended with a group of successful business people at the famous Palm steakhouse.
There was something special about their track records, a thread that ran through all of their stories about start-ups and exits. The first unusual thing I noticed was that they were seldom experts in the industry they chose to enter. The next was that they had all started more than one company. What made them so different from most business owners?
The next day, while considering this puzzle, I saw the pattern. Like the medieval entrepreneurs, these business people had noticed something that people were willing to pay for. They identified people who could satisfy that need, and they created a structure to bring those two groups together, linking buyers with providers. Then, these serial entrepreneurs stepped back and let it work. This freed their energy and attention to find and serve the next opportunity, the next –probably unrelated– market need to satisfy. It also allowed the people they had attracted to take full responsibility for growing the company.
That’s scalable. That’s repeatable. That’s lucrative. Plus, it provides great job opportunities for creative, ambitious people who are not entrepreneurs.
Here is my key question:
Did you start a business or just create a job for yourself—a job that is impossible to do well in a 24-hour day? Are you running a company or is the company …running you?
Maybe it’s time you became a classic entrepreneur, immune to the exhaustion of what I call OWNERwhelm, like those I met at The Palm. Shift your context: Don’t just create a job for yourself, don’t fall in love with being indispensable. Create an organization, a real business. As with parenting, the goal is to nurture people who will grow and thrive without you.
Emphasize the basics that have worked for a thousand years.
1. Identify a market.
2. Assemble a team.
3. Retreat and repeat.
Already have a company that you’d like to convert to the third model? That’s what I coach people to do. Step one is to take on –as the owner’s job– just these three results: Attract, Train, &
Retain key employees. Getting people to take action on your goals is the only endlessly scalable management skill—everything else is limited by your personal capacity.
Thanks for listening to this podcast. I hope you enjoyed it, that you apply it, and …share it.