Entrepreneurial Lessons in 2009

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2009, you sucked! Good riddance to you! That was a horrible year that I just get sick thinking about. As it pertains business matters, it all started in late 2008, the second half of September to be precise, when the economy tanked. The entire country panicked, and the global economy didn’t respond any better. It really was the Global Economic Crisis, and as NPR is now reporting apparently it’s been “abated” but the effects are to linger for quite some time. One thing is certain, CitySquares was affected greatly and quite immediately. I won’t go into the details and the describe the punches we took, those we handed out, and the battle scars we have to show for it, but I will highlight some of the challenges and battles that really stand out in my mind:

  • As soon as the hard times hit I saw an immediate response by the staff at CitySquares. For the most part, the team held together and today we’re tighter and stronger for it. Like a tribe, we stuck together and hunkered down while battles and storms happened all around us. We were not well fortified but we survived and now we’re about to thrive! On the other side of the coin, a couple of our tribesmen demonstrated an inability to persevere and overcome these challenges, and some weaknesses were exposed and ultimately eliminated. Thankfully that ended rather quickly and the tribe was/is better for it.
  • Small businesses, specifically brick and mortars and mom-and-pops, got their asses kicked much like we did. Those who hadn’t yet learned to fly unfortunately fell from the nest and met their demise in ways that were hard to watch. Balances went unpaid, phones disconnected, and personal stories of financial tragedy were common. It was truly heartbreaking to see. Yet many also survived and are resurfacing with tougher skins and stronger businesses!
  • Beyond the staff at CitySquares I also experienced something completely new and foreign to me – board members and shareholders reacting in different ways. The vast majority of them demonstrated a wisdom and calmness that really impressed me and taught me a whole lot about pragmatism and experience. That, however, was not always the case. In a couple of isolated incidents I witnessed naked panic, fear, and fright and this came from the worst places possible in the corporate structure. I will not divulge the details not for lack of transparency but for reasons of respect and professionalism – that is a fine balance you know! As a result of these panicked and frightened reactions it was apparent to me that something had to change and change immediately or the company was destined to collapse for unacceptable reasons. It’s one thing to fail because a business model fails, or because of timing or market and/or economic reasons, but its another to fail because of human emotions, poor judgement, and failure to communicate and work as a team. At the end of the day, however, our shareholders demonstrated their commitments to the company but continuing to support us financially and through other supportive means. Again, we are now better for it!
  • As a leader I learned so many lessons in the past 12+ months, but two in particular that I will not ever forget. For the sake of brevity there were a few incidents in the first half of 2009 when I lost control of my emotions and let anger and fear win. These incidents are not something I care to revisit in detail and am embarrassed to detail. I have made amends in both instances. These two cases taught me some huge lessons, lessons that took me months to truly understand and apply to life and work.
  • In a tribal organization like ours, loyalty, communication, and teamwork are absolutely vital. What became incredibly apparent to me was how strong the tribe is when communication is at its best, when leadership is performing in the right ways, and when the tribesmen are truly committed to each other and to the tribe’s visions and beliefs. There is something almost dogmatic about a small company! I saw people step up to the plate in the most amazing ways. It’s still happening today. People are not willing to settle for less, nor willing to sit back and be OK with the way things are or may be heading, they expect more from themselves, from the others, and from the tribe as a whole. There is much of this happening right now, as it should always be! A sort of shuffling is happening internally, and its happening in a way that is uniting the tribe only more and making the company better and more focused and determined than ever before.

These points are the major ones that stand out for me, as an entrepreneur and as the chief of the tribe. There’s lots of business related stuff too, like how we got through the last 15 months, and what changes we made to our business/model/execution, etc. And those things are continuing to happen, but the reality is this: CitySquares is stronger, more successful, and closer to our goals than ever before! Its because of the above points, among lots of others, that we are here today.

A few of my entrepreneurial goals for 2010 are as follows, and I will soon be blogging about these things:

  1. Continue to grow and mature as an entrepreneur, as a CEO, and a tribal chief. How? Continue to identify and improve those leadership traits where I am weakest, and harness and cultivate those where I am strongest. I cannot do this alone either, I need my tribe to help me, I need to read and learn more, talk less, say more, listen more.
  2. Blog here more often, with transparency, and with purpose.
  3. Create and participate more in entrepreneurial circles, networks, and communities (e.g., The Founder’s Quandary)

I am still working on these ideas and a couple others. I will be blogging again here very shortly. Stay tuned for more!

2010 is going to be an extremely good year for CitySquares. No doubt we still have lots of lessons to learn and battles to fight, that’s par for the course. But if we can survive and unite the way we did in 2009, than 2010 is really going to be something else!

Happy new year to you all, may your 2010 be filled with new found freedom, with health, and prosperity.

Defining Success

Hot Air BalloonWhat is success? How do you define what success is when you’re an entrepreneur? I highly doubt that there is any written definition of entrepreneurial success but I bet it’s a subject of debate in business classes around the world. Mirriam-Webster (still better than Wikipedia for a standard definition) defines success as: 1. obsolete : outcome, result. 2 a: degree or measure of succeeding b: favorable or desired outcome; also : the attainment of wealth, favor, or eminence. 3: one that succeeds. … right, exactly.

My gut tells me that I’ll know success when it happens and that whatever I might think it is, I’m already wrong. It’s all about perspective, and that perspective is what shapes success. I suspect that others may say “he’s been successful” or “she achieved success” while the entrepreneur will quietly disagree. Again, it’s about motivation and perspective. Success is totally relative as the definition above more or less eludes to.

This topic is prompted by a recent blog post by Dharmesh Shah, a Boston area entrepreneur who recently closed a round of financing for his company, HubSpot. I really enjoy reading Dharmesh’s blog, and I recently added him to my blogroll (what an honor!). Dharmesh has a perspective that I enjoy and that I share. With his feet very much on the ground, he tells it like it is, and keeps it very real. I share his perspectives on entrepreneurship, on funding, on management, hiring, and business models. Ultimately, I think we’re both a little more old school perhaps than the more typical or stereotypical web entrepreneur.

Back to success….

By no stretch can I say that I, or CitySquares, has been successful yet. Not even close pal! We are achieving small measures of success, sure, but we have not yet been successful. You may say that raising our financing was a small measure of success, but actual success? Not yet. As Dharmesh points out, just because you close a round of financing doesn’t mean shit about your success. It says that you’ve been given a full tank of gas, in exchange for a seat in your car, with the expectations that you’ll get to an agreed destination on time and maybe with some more passengers, and maybe a bigger, shinier, more valuable car. All that raising money says about you and your business is that you’ve been able to assemble a model and sell the vision and the story to (hopefully) some intelligent, experienced folks who may be angel investors or venture capital investors. Either way, most of the time, raising money is simply the result of having a good idea, a good team, and a concept that is ready to be proven, or an actual business that needs more fuel in the tank to get to another milestone. And that is what we’re talking about here, milestones. It’s those milestones that get you to the finish line. Milestones are not themselves success, they are steps towards success.

I frequently hear about this company and that company raising some outstanding amount of money, and people typically respond to that with applause, congratulations, high-fives, and in some cases big parties and celebrations. For what? Because someone said they believe your story and bought shares in your company? Come on…

When running a business, especially a funded business in an exciting industry like the Internet, or pharmaceuticals, or biotechnology, or energy, etc., it’s easy to get swept up in the ego of it all. It’s easy to get distracted, take your eye of the ball, and it’s easy to lose perspective and find your feet are suddenly far above the ground. You can bet your bottom dollar though, that somebody or something will be there to yank you back down. And depending on how high you’ve floated on the fuel of your own ego, the harder you will fall, and the more pain it will cause you, and the more dust it will kick up.

Success comes in varied shades of varied colors. So if you think raising money is success, well, than I tip my hat to you, but I do, respectfully, disagree. If you think that selling your business for multiples of revenue, or traffic, and putting gains into the pocket of your employees, your investors, and yourself is success, well, I will almost totally agree with you. If success, to you, is raising a child, building a family, earning the respect and love of your family, friends, and community, than I wholeheartedly agree with you and you are a winner in my eyes and to everyone else around you. Hopefully you will agree with that.