Driving Decisions: Recognizing That You Are Lost
"Quick" Matters, to Entrepreneurs and CEOs
By Patrick J. Garot, CPA, MM
My wife and I were on vacation and driving in Tuscany, near Castellina-in-Chianti. And we were lost in a heavy fog. There are worse places to be lost, granted, but the important point here is: we recognized that we were lost.
I have had ten years of working with start-up entrepreneurs, and family businesses. Oer this past decade, most consulting projects that I undertook have borne fruit.
But a nagging, large percentage, say 35%, of these consulting gigs have not. Some of this "spoiled fruit" can be traced to poor execution of a poor idea. Some can be traced to bad timing or other macro factors.
Most of the "spoiled fruit" turned from bad to worse on one factor - the Boss did not know that he was lost. Or else, he did not want to accept that he was lost.
There is little shame in being lost. Yes, the word "lost" carries the tinge of "loss" and "losing". And entrepreneurs know that we hate to lose, at anything.
But consider the New York Yankees or the New England Patriots over the last decade. Nobody suggests that either of these franchises are losers. Yet they do lose: 40% and 15% of the time, in their respective sports.
"Quick" matters. The Yankees and Patriots lose, and get lost, often. But then they make smart adjustments, and quickly return to winning. Sometimes, the new road they choose is different than the losing road that they were on.
So often I see CEOs and entrepreneurs who refuse to recognize that they are lost. Ego, while playing a part, is not the primary downfall here. Instead, the downfall is a more admirable trait that the Boss brings to bear: Optimism.
If things are bad, the Boss must convey to all that they will improve. After all, his/her experience suggests that, most often, they will. And things may... but often only after gut-wrenching changes that can be avoided, or huge opportunities that go unrealized.
Yes, constancy is important. As your company's leader, you cannot react to every minor loss with a new program or initiative.
But every loss should prompt you to ask some questions: "Are we lost here? Are we in danger of getting 'more lost'?" And if the answer seems yes, it could be time to make quick adjustments to your strategies.
"Quick" matters. It matters more than you can imagine.
In Billions, for example.
In October 2001, I answered a Craigslist ad from an entrepreneur, a "Mr Jacobs" from Beverly Hills, to help write a business plan.
A wealthy retired attorney, Mr Jacobs had a twenty-something son who had wrapped a student feature film akin to "The Matrix". This film, however, fell short in myriad ways.
As Hollywood was not interested, Jacobs had built a smart, features-robust website to "cache" his son's film, and some other unsold films from the son's filmmaker friends.
His son's friends could post film clips or entire films on the site from anywhere in the world, via the Internet. Web-surfers could watch these films, in whole or in part, for free. Surfers could even rate and review the posted clips or films. The only income for his site was from ads run before and after the films rolled.
Jacobs hoped that ultimately, he would benefit as a Producer on these films, and one or more would be bought by Hollywood as a new "Blair Witch Project".
But his website's "traffic" was puny. To increase traffic, Jacobs proposed external financing to run a massive marketing campaign. I took an initial meeting with Jacobs to help write his BP. That meeting rolled into a two-day stay where I came to understand his model better.
The ads he ran were for herbal Viagra and so on. No money there. The site traffic was 200 "hits" per day... most, I realized, friends of Jacobs and his son. Moreover, the films stored on his site ate up 5 Terabytes - which in 2002, was very expensive. Worse, the films were pretty bad... doubtful that a "Blair Witch" payout was hidden there.
But there was one clip, 40 seconds long and less than one megabyte, that was highly entertaining. A David Letterman-like stupid dog trick of someone's Labrador mix delicately eating cupcakes stacked in a pile, one after the other.
It was everyone's favorite, on Jacobs' skeleton staff. We all watched it repeatedly.
"So what do you think?" Jacobs asked me. "Are you ready to raise some cash?"
I told Jacobs that I thought he was lost. Not that his war was lost, but that his plans to break into Hollywood were lost.
First, other websites broadcasting films and TV-for-web were going bankrupt in 2002. Next, none of the films on his site were good. Finally, his plan to market "around" Hollywood, to the public, rather than with Hollywood, was doomed.
Jacobs did not take my thoughts well.
"I have to go forward," he said. "I've already put $250K into building this site, and also that much into my kid's film. Maybe you are just not the right guy."
I allowed, maybe I was not... although I did know from film, having written and sold a few scripts in my past. And I did know from business plans, successfully having raised funds for clients, and having sold my own website for some decent change.
I needed the work that month, so I tried to give him other ideas. For instance:
If you want to sell these undiscovered films to Hollywood, why not just spend $50K on luring, wining and dining and otherwise marketing to producers?
No, Jacobs said, that doesn't help build my website. The website is the thing that creates the "buzz" for our films.
If you want to build your site, I suggested, use more standard means of getting traffic, like pay-for-click (Google, Yahoo) or online ads. After more people rate the films they like, you know which films are worth taking to producers and distributors.
No, Jacobs said, Google won't get the word out big enough, fast enough. We have to have huge buzz to get more kids using it, and that means we need a huge ad campaign like Mountain Dew has.
My last idea may have made us Billions... had either of us followed up on it.
That clip, I said, the one of the funny dog. You probably can get a few dozen clips like that, from people's video-cams, and run your own "America's Funniest Home Videos". And you solicit folks to send in more clips - of rock bands, stupid dog tricks, whatever - and build users that way. Friends tell their friends to check out what they just posted; viral email takes over. Then you run ads on your site telling your visitors also to check out your son's film.
After all, I said, I have this pack of buddies that emails me about funny video clips, but I never click the links because I am afraid of getting a virus or adware.
What, I said, if there were a robust, dependable site that hosted and broadcast films and short clips from all comers, so people didn't have to worry about getting a virus?
Nah, he said. You might get some two-bit traffic for funny dog clips, but my son's and his buddy's films would get lost in that zoo. And we want to devote our storage and bandwidth to TV-broadcast-equivalent viewings of the films.
"Thanks for coming," Jacobs said. "But you just don't get it. What has to happen here."
Today, I wonder what may have happened, if Jacobs had recognized that he was lost.
All signs pointed to his being lost. His son's film was bad, the other films were worse, he was no Hollywood producer, and the websites with made-for-web TV and movies were going bankrupt all around.
Jacobs was lost. But he refused to recognize it.
When you don't admit that you are lost, you have a hard time recognizing the better roads available. The opportunities.
Jacobs' web-developers had built a clever way of hosting, broadcasting, and even rating video clips. His site had capabilities that nobody, in 2001, had ever seen before.
But, supportive father that he was, Jacobs wanted to pour good money after bad on his son's film endeavors.
And that mission so fogged his decisions that he all spent his effort trying to bolster the roads that had got him lost, rather than taking new roads that suited his strengths.
Think about it. This is akin to driving while lost, stopping for directions, and asking a local how to get back where you came from, and not how to get where you need to go.
YouTube.com was founded in Feb 2005, and launched in Nov 2005. It was Time Magazine's "Invention of the Year" in 2006, and was sold to Google less than a year after its launch, in Nov 2006, for $1.65 Billion.
When I first went on Youtube, Summer 2006, I thought: "Holy SH*T." Because it was exactly Jacobs' website, the way I had envisioned it. I scanned their "About Us" pages for names of the Russian web-design geniuses whom Jacobs had employed. There were no mentions of any of them. None of us made out.
Quick matters. Recognize that you are lost quickly, so you can make adjustments that much faster to increase your opportunities.
When you are lost, don't ask how to get back where you came from.
When you are lost, ask how to get where you need to go.
In our Tuscan vacation, my wife and I made it out of the mountain fogs with a well-timed stop at a small petrol station. Soon, we descended upon the Piazzale Michaelangelo in Florence with an hour to spare - we arrived early, and exactly where we needed to go.
© 2007, Patrick Garot. All rights reserved.
This article is available for publication and/or dissemination, and is provided free to all users in print, online or other media with accreditation as "Written by Patrick J. Garot".
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