Adjust Your Focus

You've tried the vertical hold. You've messed with your brightness settings. But there's only one thing to do when those late-'90s management mantras don't offer you a clear picture.
Magazine Contributor
10 min read

This story appears in the October 2001 issue of Entrepreneur. Subscribe »

If you're looking for a big idea, you may want to squint a little. If your dreams are filled with eager investors, wake up. And if you only have eyes for technology, it's time to get a new love. So says a recent study that identifies seven new focuses required of today's entrepreneurs, suggesting that maybe--just maybe--you aren't born knowing it all.

Hopes of cutting through the sea of management fads motivated Houston entrepreneur Joe M. Powell, who started and sold three businesses before starting Worthing Brighton Press in 1995, to conduct the study, interviewing business professors at 28 top graduate schools in the process. "I'm frustrated by the noise and confusion and trendiness," he says.

And Lester A. Digman, USA Bank professor of management at the University of Nebraska, Lincoln, and author of a Worthing Brighton book called Change Management, Human Issues Are the Key, says now is a perfect time to re-examine our focuses. "A lot of things are in flux," he says. "Business models are changing, and how you make strategy is changing." So, without further ado, here are the seven new focuses.

Adjust Your Focus
1) Old Focus: A Big Idea
New Focus: A Clear Vision
2) Old Focus: Technology-Driven
New Focus: Customer-Driven
3) Old Focus: Lots of Funding
New Focus: Inexpensive Concept Testing
4) Old Focus: Homemade Management
New Focus: Studied Management
5) Old Focus: Energy Spent Acquiring Funding
New Focus: Energy Spent Acquiring Customers
6) Old Focus: Traditional Meat-Ax Marketing
New Focus: Creative Surgical Marketing
7) Old Focus: Major Milestone is an IPO
New Focus: Major Milestone is Market Share

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."

Old Focus: Energy Spent Acquiring Funding

New Focus: Energy Spent Acquiring Customers
Customers, not investors, create wealth, Powell contends. Digman agrees: "The investor is the enabler, but for anything to succeed, it has to have customers."

Spending too much energy on finding funding can cripple a growing business, adds Kaye. She spent most of 2000 drawing up business plans and presenting them to investors in hopes of finding expansion capital. "A lot of my energy, probably 90 percent of it, went to that-to no avail," she says. While she was wooing investors, she wasn't courting customers, and her business suffered for it. "It was a big learning experience," she says. "I stopped looking for equity, and now I'm focused on acquiring new clients. It's made a big difference."

6) Old Focus: Traditional Meat-Ax Marketing
New Focus: Creative Surgical Marketing
To entrepreneurs of even the recent past, marketing has been epitomized by the Super Bowl TV commercial. "That's what they think of first," confirms Young.

That idea is outdated, says Digman. "The mass market, for all practical purposes, has been dead for a generation," he says. "The effective companies are the ones that have been targeting, targeting, targeting."

A target market isn't necessarily a small market, Digman adds. You can assemble a number of niches into a mass nearly as big as that reached by a Super Bowl ad. But when you target your marketing to each of those niches, you can make far more money. "It's been all about that for some time," Digman says. "We've just finally realized it over the last 10 years."

Entrepreneurs like Kauffman have caught on. He made the decision early on to target the Fortune 1000. His reasoning: These companies have the biggest logistics budgets and the most sophisticated needs. "And I know where the Fortune 1000 is," Kauffman says, "so I don't need ads."

Need more management focus? Try going back to school. Our College Center has information on both MBA and non-degree programs throughout the United States.

7) Old Focus: Major Milestone Is an IPO
New Focus: Major Milestone Is Market Share
If one thing is clear in the new entrepreneurial era, it's this: Acquiring and serving customers, not selling stock to investors, builds companies. Businesses like that made billionaires of their founders and pre-IPO backers while making paupers of their later-stage shareholders, aren't really creating wealth, Powell claims. They're just transferring it from investors' pockets to entrepreneurs' pockets.

For most entrepreneurs, of course, IPOs are something that happens to other people. But even for those with the option of going public, it's not always the ultimate objective. Kauffman feels his firm could be a legitimate public company. "We realize an IPO is there," he says. "But the question is, 'Why would you do it?' " His company might be able to grow just as well, and with a lot less trouble, by carefully partnering with larger companies.

"If your focus is a great IPO, you're building a house of cards," he says. "It sounds kind of hokey, but really your number-one interest is in building a great company, building great infrastructure and building great employees. The rest will take care of itself."

Focusing In

Not everybody agrees that refocusing is required. "The concept is vapid," snipped one business professor presented with Powell's list. "Smart entrepreneurs haven't relied on the 'old focus,' and the 'new focus' is not new." Many would contend, however, that even smart entrepreneurs fell victim to mistakes brought on by the billionaire dreams of the late 1990s.

Powell doesn't claim these focuses represent all there is to know about being an entrepreneur. "These are just seven pretty typical ways that entrepreneurial ventures fail," he says, and argues that it's simply appropriate for entrepreneurs to take a look at these ideas and see what they can learn.

Or, as Young puts it, "Sometimes it's better to go back to the basics."

Learn more about what professors at the nation's top graduate business schools think about running small companies at Worthing Brighton's Web site, located at

Mark Henricks is Entrepreneur's "Books" and "Smart Moves" columnist.

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