Adjust Your Focus

Old Focus: A Big Idea

New Focus: A Clear Vision
There's nothing wrong with big ideas, says Powell, except they can't survive on their own. They also have to be clear visions. What's the difference? A clear vision is executable, while a big idea may not be, he says.

Not making that distinction is a common error, says Mike Young, executive director of the Small Business Development Center (SBDC) at the University of Houston. His advice is to chop ideas into distinct, separate chunks. "With definable parts, you can easily make an action plan," he says.

When Cynthia B. Kaye was starting Logical Choice Technologies Inc. in Duluth, Georgia, in 1994, she was willing to sell any product or service that had to do with integrating information systems for public schools. Today, she has refined her focus to six core competencies that fit on a single page of paper. "That sheet focuses on what we can do for clients," says Kaye, 36. "This way, we sell what we can do."

2) Old Focus: Technology-Driven
New Focus: Customer-Driven
It's not about what technology will allow; it's about what customers will buy, says Powell. Yet entrepreneurs typically enter fields where they're technically knowledgeable, which often leads them to focus on product capabilities more than what customers need. Even when entrepreneurs appear to be considering what customers want, they may not be addressing their real needs.

Of course, technology has been and will continue to be a key driver of entrepreneurial success. The difference is where technology ranks in the hierarchy. For entrepreneurs like Mason C. Kauffman, founder and chairman of online logistics software provider Accuship in Germantown, Tennessee, the only technology he wields is what customers specifically request.

Accuship's products, which help large companies ship, track and report on the movement of goods, are highly sophisticated in how they use the Internet to link high-end accounting and e-commerce software to databases of shipment information from package-delivery firms. But, says Kauffman, 47, "we don't build technology and go sell it. We go to our customers, and when they say what they want, we build it."

3) Old Focus: Lots of Funding
New Focus: Inexpensive Concept Testing
"Does it really take $50 million just to test your concept?" asks Powell. For him, the question is rhetorical, and the answer is clearly negative. And, despite the excesses of the last few years, the typical entrepreneur would agree, if for no other reason than necessity.

"Most of our customers," Young observes, "don't have the luxury of having that kind of funding available."

Luxury is the basic problem for some overfunded entrepreneurs, says Kaye. "In the past, people would get money and just live high on the hog," she says. "They didn't think, 'If I spend this money, what will I get back?'"

You don't need a lot of funding to get a lot back if you start small and grow organically, says Kauffman. When he started in 1994, venture capital wasn't a glamour business and nobody was giving any money to small online start-ups. His prototype was funded by profits from consulting jobs he and his partners took on. Now he's got 100 employees and raised $7.6 million from investors last year-but that money is going to expand marketing, not to test an untried concept.

4) Old Focus: Homemade Management
New Focus: Studied Management
Naturally, business school professors are going to recommend entrepreneurs go back to school to learn how to run their companies. But there may be something more to this new focus than academic self-interest. As Powell wisecracks, "Maybe the management wisdom of the past has not been repealed by the New Economy."

His point is entrepreneurial intuition may not be enough these days. And he's not the only one who thinks so. Business schools across the country are starting and expanding existing entrepreneurship programs, but they're not even keeping up with demand. University-affiliated small-business educators such as Digman and Young say their entrepreneurship programs are consistently oversubscribed, and admission is competitive.

The same is true of more practical education. The University of Houston SBDC, for example, had its biggest year ever last year, training 14,000 entrepreneurs and employees, and consulting to another 7,000. And more business owners now look for stints at established companies on resumes.

Entrepreneurs like Kauffman are leading the charge. His small company is heavy with gold-plated managers, including senior executives with experience at Xerox, Goldman Sachs and Federal Express, where Kauffman himself spent 16 years in addition to acquiring an MBA from the University of Memphis in Tennessee. "We have two chief technology officers," he likes to brag. "And even UPS only has one."

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This article was originally published in the October 2001 print edition of Entrepreneur with the headline: Adjust Your Focus.

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