Emails to a Young Entrepreneur: The Cosmos of the New Venture

Day 135 of Self Quarantine             Covid 19 Deaths in U.S.:  149,000

The Cosmos of the New Venture

While performing ethnographic research at a Seattle B2B startup accelerator, I agreed with the managing partners to just research and not to mentor any of the nine companies. I wanted to have a baseline of how an accelerator works before introducing interventions to test different approaches to accelerating the development of a new venture.

One of the companies wouldn’t let me get away with being a passive ethnographic researcher. They went to my LinkedIn profile and found my blog and confronted me with “you were introduced to the nine companies as simply a UW professor doing research. We all dismissed you as a useless academic and then we found out that you are an accomplished serial entrepreneur. Can you help us get some funding and find the talent we need to accelerate our product development?”

As much as I wanted to stay neutral, I was fascinated that one company actually did some research on who they were encountering within the accelerator. Over several ferry rides to Bainbridge Island and many engaging evenings at The Pub, I agreed to help them. I liked their product and their approach. They were the only company that valued design with one of the co-founders being a very accomplished designer.

I introduced two of the co-founders to three of Seattle’s Super-Angels and a VC. Of the $750K the team raised during their six-month tenure at the accelerator, $700K came from three of the four introductions. The team did a super job of bringing their opportunity to these investors and gaining early interest. Yet, the team had no idea what the “selling” process and documentation (term sheets, investment documents) and strategy for closing the investors were.

Over several more beers at The Pub, I shared that with investors it is all about “warm armpit” face to face selling. Emails and phone calls don’t cut it. It took a lot of pestering on my part to keep them engaged with the investors.

Over time it became clear that the founders didn’t understand how networks work and what trust relationships mean. Their focus was on the core triangle of Conceiving, Designing, and Bringing.  After a lot of prompting they still didn’t see the behind the scenes context that was guiding the investors to part with their resources of money and time. They never figured out that three of the four investors knew each other from their formative years at Salomon Brothers. They didn’t understand that by connecting these four investors with the team, that the investors were trusting our previous relationships and that if I recommended this company (the only one out of the nine) that I thought the company was pretty good. In the small world of the entrepreneurial ecosystem a recommendation from a trusted advisor is of great value.

The founders also never saw the many interactions behind the scenes of the ways that the investors “checked out” the company and the founders. The founders still believe that the money they received was because they did such a good job pitching their product and company. Similarly, the founders didn’t see that the same kind of network effect was in play with selling to their enterprise customers. The co-founders couldn’t “see” the many reputations of respected professionals that went into their customers actually purchasing.

The Cosmos of a New Venture is a way to prompt the entrepreneur to look beyond the core triangle of work – Conceiving, Designing and Bringing. The core triangle is the daily work. However, it is the surrounding context that enables the “meal” to be served and the consumer satisfied with the experience.

Throughout the Emails, I build a meta-model of the new venture cosmos similar to Bennett’s description of the enneagram of the three fold way of a cook in a kitchen preparing a meal. The Cosmos of the New Venture is a model of both energy flow and the multiple layers of context in any human activity.

With all the emphasis on “lean” and formulaic approaches to a new venture and successful entrepreneurs trumpeting “do it the way I did it,” the entrepreneur loses sight of a new venture being about marshaling and managing energy in a threefold context.

 

All models are false; however, some are useful.

The short definitions of each of the points on the enneagram are;

    • Conceiving is COMMITTING.
    • Flipping Perspective is OBSERVING with a spirit of inquiry.
    • Finding talent is VALUING DIFFERENCES.
    • Modeling is the EXCHANGING of value.
    • Designing for humans is OBSERVING, PROTOTYPING and ITERATING.
    • Asking for help is about OVERCOMING fear.
    • Bringing opportunity is about PITCHING and CATCHING.
    • Measuring is KNOWING.
    • Branding is LOVING.
    • Exiting is CAPTURING your rightful valuation.

The challenge of sharing any system, framework or model is that the mode of explaining it, whether in writing or speaking or in Socratic conversation, is inherently linear. Yet, there is nothing linear about the effectual entrepreneuring process. The nine-term system of the Enneagram is a way to explore the many interactions of the nine elements of The Cosmos of the New Venture.

The more astute among you realize that there are ten elements to our system with Exiting. In the Bennett explanations of the Enneagram model, Exiting is the start of the next cycle up. Exiting is the bringing not of an opportunity (product or service) to a customer, but of the business itself to another set of investors or acquirers. The cycle repeats at a higher level of organization.

Let’s look at the new venture cosmos in a similar fashion to how Bennett looked at the cooking of food in a kitchen. The entrepreneur becomes our “cook” who takes the raw materials (food) to conceive the opportunity she wants to bring to her customers (guests) by designing the product offering. In today’s digital connected world, physical products and digital products are produced and distributed in much the same way as Chris Anderson describes in Makers: The New Industrial Revolution. The major resource for the transformation is the intellect of the talent inside the organization (kitchen). The kitchen is the “place” that is created by the resources of the investors. It may be a physical place or increasingly a virtual place in the cloud.

As the entrepreneur visionary conceives the core triangle of work, first in mind and then in practice, it is time for the entrepreneur to FIND the talent and work a process to flip the perspectives of the talent, customer and investors. An effectual entrepreneur starts this process by asking for help and graciously receiving the help that passes the muster of their inner guidance system. This next triangle surrounding the core work is the Finding, Asking and Flipping acquiring of resources to “cook” the meal (product).

As soon as the entrepreneur envisions these two triangles, the conceiving goes to the branding thinking. How will the entrepreneur help the customer experience the love and caring that goes into providing the consumer with both a promise and a fantastic brand experience. What will the entrepreneur “stand for” to their customers? What can the customers trust the entrepreneur to provide?

Pretty soon the mind of the entrepreneur flows to how to model the experience and the Geoff Moore Whole Product that surrounds the generic product that they are delivering. What can the entrepreneur do to enhance the presentation of the cooked meal with table cloths, flowers on the table, and the good silverware and china? Is there an appropriate wine in the right Riedel glass to compliment the food? As Moore and Ted Levitt pointed out, customers aren’t just buying a particular product like Microsoft Word, they are trying to produce a good looking resume or business plan. As the focus shifts to a model of the whole experience, the business mind cuts in to make sure there is a profit model that works for their “meal” so they can stay in business.

As the business mind chimes in, the entrepreneur begins to think about how to measure how their product is going to help the well-being of their customers (guests). The entrepreneur wants to know how they are doing so they can improve their product for the next encounter with the customer.

The cycle is complete as we move back to Finding the additional talent, customers and investors to help us continue to grow the business and most importantly grow our customers’ businesses. The threefold way of the Cosmos of the New Venture is continuously working. The challenge is how aware and how intentional the entrepreneur is about the cycle to anticipate and avoid breakdowns in the energy flow.

The threefold processes of the Cosmos of the New Venture are:

    • The raw materials (primarily the intellect and will of the talent)
    • The product (conceiving, designing, bringing)
    • The customer (receiving a loving and engaging experience)

 

You can find a PDF of the full Preface, Forward, and Chapters 1 – 10 here.

You can find the introduction to the Cosmos of the New Venture here.

This entry was posted in Content with Context, Emails to a Young Entrepreneur, Entrepreneuring, Flipped Perspective, Learning. Bookmark the permalink.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s