Espresso Entrepreneurs and Cargo Cult Capitalism

moneyAn item caught my attention recently - so much so that I actually replied to the other blog!  It suggests that in order to succeed as a startup you actually need to be in Silicon Valley or a similar place.  My reply is below:

“Bit of tough luck for us Europeans, heh?

Most start-up entrepreneurs need a good dose of reality, I’m afraid. It’s quite likely that 99% of us will NEVER create a ‘winner takes most of it’ let alone a ‘winner takes all’ business.

For most people, moving to SV or it’s environs simply makes you think you’re doing something of value to the startup – the money spent and disruption experienced could be better spent on achievement within the business.

In the film industry there’s what are called ‘Cappucino Producers’ – people in Hollywood or London who are in the right place, at the right time, with the right ideas, meeting lots of people, but who never actually manage to get a project off the ground because they’re distracted with the lifestyle.

Don’t become an Espresso Entrepreneur. ”

There’s nothing new in what I’m saying, and I’m the first to say that I doubt that I currently have the nous to put together a world-beating company that takes first place in a market place.  And I’ve failed on more than one occasion….but, hey – that gives me a different perspective. :-)

My current business thinking in terms of getting my new baby off the ground has been very much influenced by the book ‘A good hard kick in the ass’ by Rob Adams, in which he disabuses several common myths about startups, and in that book is focus on what he calls becoming an ‘Execution Oriented’ company rather than an ‘Output Oriented’ company.  Execution orientation refers to the tasks and processes undertaken by the company that progress the business plan and actually get viable product closer to the market place – i.e. those things likely to make money.  ‘Output Orientation’ refers to the things done that are peripheral – e.g. doing lots of market research without using the results, focusing on office furnishings, etc.

My own thoughts are that a lot of folks seem to be buried in the minutiae of Output Orientation; involvement in tasks and activities that at first appear to be progressing the business but actually don’t add much to the execution of the business plan towards profitability.  It all looks good, you can get out and about and meet other entrepreneurs doing the same thing, and there’s a general whirl of activity – much of which will not help establish sound businesses.

I call this ‘Cargo Cult Capitalism’.  In the years immediately following World War 2 natives on Islands that had been occupied by the US or Japan started behaving very strangely; they started building mock-ups of air strips and all the associated paraphernalia to try and bring back the aircraft that had been supplying the troops on their islands (and hence giving them lots of stuff as a by-product).   These ‘Cargo Cults’ were basically an attempt at sympathetic magic; by mirroring what they’d seen the soldiers and airmen doing, they thought that they could induce aircraft to appear and land.  Cause and effect was something of a lost cause…

And so it is with lots of startups – folks involve mirror the public behaviour of what they feel are successful startups, whilst neglecting the behind the scenes private behaviours that actually deliver the goods.  So…perhaps it’s time to consider whether what you’re doing is actually output orientation or Cargo Cult Capitalism; and if so, just ditch the Espresso and get executing!