You just had an amazing conversation with an acquaintance at a networking event.
He mentions a workshop he wants to develop, or you see him as a potential partner for a new project of your own. You discuss potential team-mates to round out the needed skills.
Cocktails in hand, you plot global domination and discuss how much fun you will have as you become captains of industry side by side, propelled by your own brilliance and unique approach to business. On the drive home, you can picture your names in lights and the rush of adoring fans and skyrocketing sales this new idea will bring...
Before you commit to breakfast meetings for the next six months and invest in supplies and sweat equity, ask yourself these three questions.
1) Does the proposed venture align with my purpose as a professional?
We’re talking about both strategy and brand consistency here.
This question is especially important if the project that has just been suggested appeals to you on a personal level. My friend, Dr. Dan Price, once put it to me this way, “What’s your ROE (return on energy)?” By this he meant something more than the business metric of ROI (return on investment), which is a monetary consideration. He was encouraging me to think in terms of opportunity cost as well.
Opportunity cost was one of the few concepts from my undergraduate economics course that really stuck with me. Here is a simple example.
If I spend $5.00 on a latte, the opportunity cost is everything else I could have done with that $5.00 that is no longer in my pocket.I could have bought a salad.I could have saved it, donated it to charity, given it to my son, or saved it for a rainy day.
Now think of opportunity cost in terms of your time as well.If you, as an entrepreneur, commit to six months of breakfast meetings— and accepting additional tasks related to the project, plus your travel time, scheduling, etc. what does that add up to in terms of the work you are not doing on other projects?
A weekly breakfast meeting for six months is 26 hours of meeting time, plus about 30 minutes to commute each time.That brings us to 39 hours, just under a full work-week.Add to that the time spent preparing and following up and… Well, you get the gist.
If you had to chunk that and do it all at once, taking a whole week off from your other tasks would you still do it?
Can you afford to?
What else could you do with that week?
What if you focused on sales for a whole week?
Better yet, you could work on content development for a week.
Dr. Dan was on to something. He could see something in my flurry of activity and meetings that I was oblivious to at the time. I was pouring a whole lotta (latte) love into projects that were going nowhere!
Embarrassingly, I did this multiple times.
The positive side, the part I don’t regret, is that I met and bonded with some VERY cool people along the way. My personal ROE was pretty high in most cases, even when the projects didn’t pan out.
In some cases it was the opportunity cost and ROI that bit me. Then my ROE wasn't sufficient to keep the ball rolling myself because the alignment to my own purpose and work weren't strong enough to keep me engaged.
2) What are the motives and commitment levels of all concerned?
This one is hard. As decent people, we don’t want to be judgmental and that is not what I am suggesting here.
What I AM suggesting is that everyone on the project needs to be up front about their intent, the nature of the project, and their level of commitment. You might go so far as to establish group norms and expectations at the outset, and maybe even a nondisclosure agreement if that is appropriate.
There are a lot of very nice people to have coffee with for social reasons. They may be very smart and capable in their areas of expertise, even fun and enthusiastic, completely revved up by this project… You may have had success working with them in other contexts too, but that doesn’t necessarily mean you will succeed on THIS project.
When we ask someone to collaborate, we are asking them (and ourselves) to invest a lot of time.
Time is money.
Yogis have a concept of “non-stealing” that includes not wasting people’s time. Apparently the ancient sages had this problem too! So as a matter of integrity, the first place to ask this question is in front of the mirror. Self-awareness comes into play.
These days, if my motive is anything other than service, if it doesn't clearly benefit others up front, I will typically choose not to engage— and this includes my own super cool (at least to me) ideas that are compelling on the surface but don’t bear the scrutiny of a little research. To serve others, we have to make sure that we are serving an unmet need or desire. If researching the market before diving in seems like a lot of work, then I think twice before bringing others into the mix because my own commitment just isn't there.
Me: WOW!I could make something big and round that could roll and help us move things!That would be so cool!
The internet: WAY ahead of you here!Go back to the drawing board.
Me: Glad I checked that out before by friends and I built our prototype!
This example may seem silly, but many, many of us have these kinds of experiences on our entrepreneurial journeys.If my motive is chasing a bright, shiny object (as I am prone to do), I have learned to be a bit more careful to make sure that the world actually needs it before I break my piggy bank and empty its contents on the table.
Once I am clear about my own motives, then I must carefully consider the other collaborators’ perspectives.
How does this align with THEIR interests, both personal and professional?
Is the linkage strong enough that they will stay motivated and follow through?
3) Objectively, taking emotion out of the equation, what are the odds of success here?
This is a risk assessment question.
Assuming you have clarity on exactly what the product you intend to offer is (including a value proposition that is simple and clear), here are some considerations.
It’s a good idea to closely examine the competition. Who else is doing similar work? If you don’t know where to start, ask your local library’s reference desk. Then you need to consider just how much demand there really is. If everybody’s doing it, do we really want to fight for a piece of that pie?
You need cost estimates and proformas with REAL numberswhere business ventures are concerned, especially where intangibles like services and consulting are concerned.This last one is time-consuming, but absent good research on what people are willing to pay, and how often, you can pour a lot of time, energy, and money down a big hole.
Worse yet, you may even lose a friend or two if things don’t work out.
Are you still up for that team project?
If you have really thought it through, then go for it! Just remember to check in periodically using these three questions.It pays to make sure you are still on track at regular intervals.
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