Mary Buffett's Tips For Entrepreneurs: A Ruthless Focus On Product And Team Building
Whole forests have been chopped down to offer advice to start-ups. We have seen how surefire well-funded ventures have become the “flameouts of the decade” while others, founded with little more than determination and grit, have moved from somebody’s garage into the Big Time. There is no “tried and true” approach for guaranteeing entrepreneurial success, regardless of what some international best-selling authors of the moment might profess. Some startup failures are so astonishing that they become major motion pictures. Others die quiet and alone, somewhere off the beaten path where the lights are finally turned off on what appeared to be a great idea at the time.
However, as we look back, two major behaviors stand out:
• Entrepreneurs must be ruthlessly laser-focused and fearlessly dedicated to their core product.
• Entrepreneurs must build a team that complements their strengths, but more importantly, compensates for their weaknesses and blind spots.
Ruthless focus on product
With each technological explosion that has taken place over the last generation, there are endless stories of people who took their eye off the ball and let their success go to their heads, as if the good times would last forever. They forgot that their initial success made them the target for hundreds of other potential competitors who would try to knock their block off unless they remained vigilant and ruthlessly dedicated to their product.
The stories of businesses that got lost in their success are everywhere. By the 1970s and after decades of teaching the world how to build cars the right way, American carmakers lost control of their manufacturing quality standards. At Ford and GM, the finance guys easily outmaneuvered the product guys to the point where the running joke in Detroit was that GM was really a finance company that just happened to sell cars. Even after emerging from bankruptcy, GM never returned to its preeminent positon in global auto sales. The classic mythology at Apple was that a chastened Steve Jobs returned as the prodigal son and became central to the development and placement of product for their brand. While it is true that the applications of some of Apple’s products would suffer from Jobs’ withering aesthetic -early iPhones with exterior glass that would easily shatter, for example- it was his ruthless dedication to the core product that drove Apple’s amazing comeback story. We forget that, even in the autumn of his life, people would hang on his every word or wait in a long line until the next iPhone release. Jobs’ second coming at Apple only strengthened the cult of product that other Apple CEOs, like John Scully and Gil Amelio, sorely lacked.
We have seen what happens when a new venture becomes a “unicorn enterprise.” Perhaps flush with stock options, purchasing that winery in the South of France might be more appealing that the drudge of another conference call and or endless product meetings. Just remember, there are tens or even hundreds of people who believe that they can deliver something that is smarter, better, faster or cheaper. They are ready and eager to beat you soundly if you take your eye off the ball.
Related: How To Choose The Right Executive Coach For You
The right type of team building
When an entrepreneur builds his team, it is crucial that he or she carefully understands his or her own strengths and weaknesses because the failure to do that will result in calamity. We seem to have this Valley mythology full of CEOs who walk around the stage in grey hoodies or black turtlenecks during product launches. C-suite leaders are no better, no worse (not to mention just as human) as the people who clean their offices, long after they have left for their gilded lives. These failures are so colossal because they are reflections of one’s leadership style. Hard charging “Uber-A types” who brook little dissent may find that their subordinates may lose the ability “to speak truth to power” as they are steamrolled into silence. How could so many smart people, from the investors to the medical or press community, have missed the gaping holes at Theranos? Until the devastating series of Wall Street Journal articles that finally told the truth about Theranos, how was Elizabeth Holmes able to succeed as a 21st century wunderkind? When Tyler Shultz, an employee of Theranos and the grandson of Former Secretary of State George P. Shultz (himself a Theranos board member), began to have strong misgivings surrounding the accuracy of the company’s blood testing claims, his employer tried to silence him with threats from one of the nation’s top litigators. Soon enough, Tyler Shultz found himself estranged from his famous grandfather and his family faced US$400,000 in legal fees because he blew the whistle on the activities at Theranos. Nobody in the C-suite at Theranos was willing to listen to Shultz’s valid concerns and instead chose to punish a brave young man.
However, entrepreneurs and startup enterprises can learn a great deal from the classic case where leadership and senior managers listened carefully to the hard truths and took decisive action to save their brand. It is a case study taught in most business schools, although it took place 35 years ago. It is the Tylenol Poisoning case. In 1982, several people died in the Chicago area after taking Tylenol which had been laced with potassium cyanide as a result of product tampering. Executives at Johnson & Johnson quickly took the reins of the crisis. They were forthright with their customers and printed newspaper ads that addressed the crisis squarely. There was a nationwide recall of Tylenol, and Johnson & Johnson asked their customers to temporarily stop using their flagship pain reliver. When the new version of Tylenol was reintroduced after the crisis faded, it was in a caplet form that could not be tampered. The pain reliever also came in “triple seal packaging” which gave their customers an added sense of security. Within a short period of time, the Tylenol brand rebounded and Johnson & Johnson’s senior leadership team was lauded for how they dealt with this crisis.
Compare how Johnson & Johnson addressed the Tylenol Crisis and contrast it to how Theranos handled their disastrous blood testing machines. Johnson & Johnson is just as hard-charging as Theranos was in its heyday, but there was one important difference. The senior management at Johnson & Johnson was able to put aside its collective ego to deal with a crisis which would have almost certainly destroyed its flagship brand and might have harmed the company. For entrepreneurs, this is a critical skill because as you move out into new and uncharted waters, your need to build the right team that complements and compensates for your own strengths and weaknesses. As entrepreneurs try to build a business case around their great idea, they may quickly realize that the greatest impediment to success may be themselves. However, by keeping one eye ruthlessly focused on product and the other on building the right kind of organization, they may be able to bend fortune to their favor.
Mary Buffett is an author, international speaker, entrepreneur, political and environmental activist. Her first book Buffettology, co-written with David Clark in 1997, was an immediate New York Times and Business Week best-seller. Since then, all seven of her books have been best-sellers. She appears regularly on TV as one of the top finance experts in America, including CNN Business News, Bloomberg News, Fox Business News, MSNBC and BBC News. Buffett has worked in a wide range of businesses, including extensive work as a consultant to a number of Fortune 500 companies, such as AOL Time Warner, as an executive at Columbia Records and as the co-founder of her own music and editorial post-production companies, Independent Sound and Superior Assembly. She has also taught Business and Finance at several California State Universities, including UCLA.