Saturday, October 25, 2008
The Slow Startup Movement
A Field Guide to Organizing and Launching Your Own Small Enterprise on Your Terms, With Little Risk and Less Money.
Let's start with the economic crisis. My ideas are meant to offer a little self-defense and hope to those of us who would like to get more control over our financial lives, more security in our commercial lives, and more enjoyment in our personal lives.
There are any number of approaches that can work to help you launch your own enterprise. I want to talk about one of those paths that I think fits these times and people's aspirations perfectly. I've also seen them work over a lifetime of entrepreneurship.
This awful economic environment is changing the entrepreneurial landscape rapidly. I would suggest that what has happened to economies across the world will make it increasingly viable and even necessary to create your own small enterprise.
Running to the bank for a loan or raising money from outside investors will certainly continue for a few, but for the vast majority of startups, those tools are just not available.
Rather than give up on the thought, I suggest we get busy. Slowly. It helps me to think of it as the slow startup movement.
The TV and movies push images of entrepreneurs as manic speedy-commerce freaks. This has its roots, but those kind of enterprises often cause as many problems as they solve.
There was a good book out a few years ago called 'The Millionaire Next Door' by Thomas J. Stanley and William D. Danko. What was so eye-catching about their study is that people with significant (actual) personal resources and security were not those best skilled at surfing bubbles, but were average people, that started small and carefully grew their businesses slowly over time. They lived below their means. They accumulated real security over time.
A garden is an obvious metaphor. A garden we plant ourselves. A garden we learn to grow. A garden of things we love. A garden whose journey is every bit as valuable as its outcome. A garden that can positively change our self-worth and increase security for our families. A garden that makes our communities stronger.
What in the heck could planting a tiny economic plot of your own do to change things?
The idea of Victory Gardens come to mind.
Think of starting your own enterprise as starting your own small garden. You start carefully. You plan. You nurture the garden, and you grow stronger, wiser and more valuable personally during the process. The work in the garden and the fruits of the garden make you and your community more sustainable and secure.
Here's what Michael Pollin just wrote in a great piece in the Oct. 9 New York Times Magazine, entitled 'Farmer In Chief'. It's an open letter to the next President about our food policies seen as a national security issue, among many other valuable perspectives.
"When Eleanor Roosevelt did something similar in 1943, she helped start a Victory Garden movement that ended up making a substantial contribution to feeding the nation in wartime. (Less well known is the fact that Roosevelt planted this garden over the objections of the U.S.D.A., which feared home gardening would hurt the American food industry.) By the end of the war, more than 20 million home gardens were supplying 40 percent of the produce consumed in America." (My note - these are results achieved in 2 years as a result of contributions made by millions of tiny contributors.)
So what does this have to do with a slow startup movement?
I've borrowed the gist of the term from the slow foods movement. Do you know it? The premise is take control of your food life. Use local foods and high quality resources. Strive for creating value and improving your life. Strive for an enjoyment of the process for savoring the results. Strive to share those results with friends and your communities in ways that make all involved stronger and more viable.
Gardening and cooking are iterative steps. Things don't always go the way you want. It takes time to get started. To do it right, it takes flexibility and creativity and most of all patience.
This is also the recipe for starting small, sustainable enterprises.
You use simple, high quality ingredients. You add your creativity and skill, and most of all patience, and you slowly create nourishing results.
This is not to say that many of these slow startups will not become sprinters, or gazelles as they are referred to in economic development circles. For those with appropriate offerings in the right markets, this is something to encourage. But a recent US Small Business Administration analysis of the gazelles notes that these firms don't get to the place they can sprint until they have in the market for a number of years, and have made their mistakes, and have polished their model, and organized appropriately for the time in their life cycle that they can take off like gazelles.
You don't start as a gazelle. You start as a gardener, nurturing what's good, weeding out what works against success.
That's the essence of the slow startup movement idea. Put yourself in the game. Find something you love and nurture it. Find the help and the resources to grow your seedlings. Take your time. Observe. Test. Fail. Rejigger. Repeat.
You can do it my friend. Like the Victory Gardens of World War II, we need to do it given the state of things.
The slow startup movement is a kind of commerce that you can follow to increase your own security, engage your creativity, and build the communities you live in.
Dig in, my friend. You can do it. Now is the time to start.
New York Times 'Open Letter to the Next Farmer In Chief'.
Overview of the book, The Millionaire Next Door, at WIkipedia
Saturday, October 18, 2008
The Economic Development Director of Racine County, WI is Gordon Kacala. Gordon and I have not met, but I'm an admirer of his work and his writing.
I buy the Racine Journal Times whenever I'm in Racine, which is fairly often. I love newspapers, but my specific reason is to read Gordon Kacala's column in the Journal Times called 'Developing Racine'.
In a recent column I really liked, Gordon wrote about one of my favorite economic development subjects, manufacturing. Specifically his column talked about ways to define 'next generation' manufacturing.
The definitions Gordon pointed at have been proposed by our own Wisconsin Manufacturing Extension Partnership. I think these are a great first effort. I also think they are generally applicable to all kinds of economic development issues.
This evolving definition for 'next generation' enterprise has five main characteristics called out. I'm going to take each point and apply it to business development generally.
- Your enterprise embraces systemic, continuous improvement
ME: For startups and small businesses, this does not have to
mean biotech patents. It can mean sending invoices faster or storing phone numbers in the right place, or checking credit better. You do not need to be a rocket scientist to continuously improve your operations and the solutions you offer. However, you do need to do both all the time.
- Your enterprise is globally engaged
ME: There is micro-economic and a macro-economic comment to be made, given current circumstances.
The big global stuff is fun, and it's never been more available to small businesses. In both of my last enterprises, we had customers on 5 continents. I sold recycling equipment in Africa, Europe, Asia, and the Americas from my virtual office in Madison, Wisconsin. However going global is not the first step that most startups must learn to take. We took those global steps only after we learned to walk regionally and nationally.
I am not going to dismiss purely local commerce, but it can be very limiting and potentially lethal for most small enterprises.
For most enterprise their first markets need to be regional. It spreads the risk, it increases the universe of customers and it offers the potential for implementing your solutions at lower costs.
After that, when appropriate, you should then learn to market yourself nationally. Setting up a small enterprise that rejects the potential for selling across the United States is naive and wrong headed. When appropriate, marketing small businesses throughout the US has never been easier or less expensive.
After that, go global with my blessings. It can be rewarding and very profitable if you're ready.
- Your enterprise has active strategies to attract, develop and retain the talent necessary to win in a next-generation world.
ME: For the smallest businesses this means training yourself to learn the skills and tools needed to cowboy up commercially in the 21st century. This is not only the digital stuff, but the people skills needed to equitably do commerce going forward. Attracting and developing talent for small business can mean employees, but also increasingly means growing and retaining talented strategic market partners.
For existing small businesses, I would also suggest that the big picture needs adjusting. I mean that we all need to advocate for a system that takes health care out of the list of risks we face when starting and running enterprises. Without that, we can not compete for, or retain talent. The talent we need won't be available because those talented people can't risk their insurance status. The people who small businesses most need, (and I think the same people who most need small business), have to balance their family's risks with every decision as you do. We need to fix health care to fix economic development. Period.
- Your enterprise incorporates green ideas in its growth and operating strategies as a means to reduce waste and take advantage of the growing demand for sustainable products.
ME: I have seen the most egregious BS attached to the green movement, and I have also marketed hard right into it with great success. The test of sustainable green commerce is not a complicated one; it needs to fix real problems and it needs to make money.
There has been a sea change recently that will drive this movement forward. Green has become a national security issue.
As a sustainable path into the future, I have never seen so
much market wind at the back of green commerce
Need a definition of green commerce? I recently saw a great quote by Nobel Prize-wining physist Murray Gell-Mann defining sustainable as, "living off nature's income rather than it's principal".
Your community and the entire world want more sustainable products and services. There has never been more potential for ground-up, sustainable entrepreneurship in my lifetime.
- Your enterprise is skilled in strategic partner and supplier relationship management as a means to increase production flexibility, use partner competencies, and tap new markets.
ME: For small businesses, this translates as setting up equitable, transparent, mutually beneficial food chains with your commercial partners and customers. This is the most profitable model in the long run, and also the easiest to operate. Simple is good.
What we've seen in the economic meltdown this summer is that complicated, opaque commercial systems are almost impossible to manage and master, and in most case lead to disaster.
Next Generation business development will require the positions suggested above: continuous innovation, a regional and national market focus, your approach to all people is one of equality, your approach to commerce sustainably fixes problems, and you develop the ability to work cooperatively and equitably with all your commercial stakeholders.
Sustainable = repeatable. This 'Next Generation' model highlights that approach. Anyone can do this. I believe everyone should start and grow their own enterprises along these principles.
There has never been a more important time to to do so for yourself and for our economy going forward.
Thanks to Gordon Kacala for his good work and good writing on behalf of Racine County. Visit the Racine County Economic Development site
Visit the Wisconsin Manufacturing Extension Partnership site discussing Next Generation Manufacturing