Michael F. Bruyn

The philosopher’s toolbox for entrepreneurs

A guide for entrepreneurs who do not read management books but would like some inspiration all the same.

for Tita

A businessman who reads Business Week is lost to fame. One who reads Proust is marked for greatness.

John Kenneth Galbraith

________

Most entrepreneurs fail.

Daniel Kahneman

________

There is no such thing as a failed entrepreneur.

Nassim Nicholas Taleb

________

Liberty means responsibility. That is why most men dread it.

George Bernard Shaw

Preface

By means of this book, I want to offer you a concise and practical handbook for entrepreneurial thinking and acting, backed by timeless wisdom. Perhaps you already run your own business. Or possibly you are currently toying with the idea of starting one . Or maybe you are a manager who would like both company and himself to take additional risk in order to reach a specific goal. But whatever your over-all aim, you will be in a position to benefit from food for thought as provided by thinkers whose ideas have stood the test of time.

Forewarned is forearmed. You will find no new theories or concepts in this book. Rather, it offers you a selection of maxims, aphorisms and chunks of whatever condensed wisdom have been around for quite some time, though not necessarily in the world of business. Usually, business and philosophy are regarded as being mutually exclusive; I beg to differ. It goes without saying that management hypes and philosophy are worlds apart. But the core of entrepreneurship is as timeless as the ideas of the great thinkers.

So no new theory. But in its place, the facilitation of new thinking.

A word of caution. I think entrepreneurship is overrated in general. The mass standardization and monotony of many 21st century office jobs stimulate many of us to dream of starting our own businesses. Often, the risk/return equation of such ventures is viewed too optimistically. Success stories are magnified, and romanticized. The loneliness and existential insecurity that typically go with being on your own are underestimated. If you are well-educated, even-tempered, patient and generally well-liked by people, you may have a better chance of doing interesting work and making good money if you join a larger corporation. Although of course today’s payroll jobs aren’t what they used to be in terms of salary, benefits or job security.

So one other thing you are not going to find in this book are motivational can-do messages. If you need those, you’re probably not an entrepreneur in the first place. You have or will become an entrepreneur because of a certain inevitability. If that seems to be the case, this little book may well help you to find out if it really is the right calling for you, and if so, may also help you make a much better job of it.

The book is organized into 34 chapters. Each chapter is focused on a theme which has been on entrepreneurs’ minds through the ages: getting ideas, turning ideas into action, dealing with uncertainty and risk, getting and keeping customers, buying and selling, cost control, managing people, dealing with competition and so on. For each theme you will find a selection of wise sayings which are illustrative of the issues you may encounter in each area. Each saying is further illustrated by some brief observations from real business life. If you sometimes detect incongruity between different sayings, that is in order: whilst the opposite of a small truth is usually a falsehood, the opposite of a great truth is usually another great truth. That’s the way it is. Good luck with your enterprise.

1 On your own

Not everybody is cut out to be an entrepreneur. If it’s job security you’re after, or a fairly good chance of making fairly good money, a corporate career is probably better. Or joining a reputed law firm. Or a bank. There is certainly no shame in recognizing that.

Some people say that it takes three things to become a successful entrepreneur: greed, ignorance and luck: not exactly the first things a nice, balanced, thoughtful and responsible person would identify with. Let’s rephrase, then. You must have a passion for profitable results. You should not let your own intellect or the opinions of others get in the way of acting decisively. And you must be ready to deal with extreme outcomes, positive or negative. Here is what some great thinkers have to say about it.

________

To be a man is, precisely, to be responsible.

Antoine de Saint-Exupéry

French aristocrat, writer, poet and aviator, 1900-1944

No better way to assume responsibility than starting and running your own business. If things go well, and also if they don’t, you have no higher power to answer to but yourself, apart from maybe your family members, who have to share the burden of a wildly varying household income and of your erratic working hours. A thought as scary as it is comforting.

________

Something is always born of excess: great art was born of great terror, great loneliness, great inhibitions and instabilities. And it always balances them.

Anaïs Nin

Cuban-American writer, 1903-1977

Great entrepreneurs are like successful creative artists, with whom they share the qualities of ignorance and luck. As to greed, the jury isn’t out. Just like an unhappy childhood may prove to be a writer’s goldmine, a troubled background may well be a common characteristic of any man or woman who goes at it alone. You don’t become an entrepreneur when you fit in too well.

________

Few great men could pass personnel.

Paul Goodman

American writer, 1911-1972

Indeed, fate may have steered you to running your own show by simply putting Human Resources in your way at the time you were still a hired hand. The HR department is typically staffed by people who tend to have a low risk appetite. Their device is ‘don’t do the wrong thing’ rather than ‘do the right thing’. You are a-typical and therefore a liability. Hiring or promoting mavericks like you does not serve their own interests, as you may have found out already when applying for a corporate job or promotion. You will have been turned down by HR or by its passive influence, probably with a vague explanation including some lame talk about ‘lack of team player ability’.

________

Why do you have to be a nonconformist like everybody else?

James Thurber

American humorist and cartoonist, 1894-1961

Millions of people are dressed in the latest fashion and yet every one of them thinks that this habit underlines his or her unique personality. People the world over practice the same fashionable language, and they all like to think this makes them innovative wizards. Managers use all kind of business speak to prove their enlightenment to themselves and to others. Entrepreneurs are different. They may look unremarkable in their appearance and may not use buzzwords. But their view of the world is unique. Like the artist, they notice opportunities that others overlook and have a sense to act upon them. Acting the part rather than looking or talking it is what makes them tick.

2 The Goal

If you are smart and reflective, you will not start your own enterprise unless it is based on a distinctive idea. Perhaps you see a better way for small business owners to do their bookkeeping online. Maybe you have designed a pair of jeans that will go well with a smart sports jacket. Or, after wasting a lot of baking dough, you now have a couple of recipes for pizzas that taste like haute cuisine but can be sold at eight dollars each. And now you want to sell it to the world.

________

The center of every man’s existence is a dream.

G.K. Chesterton

English writer, 1874-1936

We are all driven by something: ideas, wishes, ambitions, desires. In short, by something which has not yet materialized. To live is to long for something. Entrepreneurs are no exception. They usually have strong imaginative powers and can think beyond the here and now. Fueled by dreams of how things could and should be, they are ready to take on new ventures.

________

If you are both poet and killer, you get rich.

David Ogilvy

English advertising executive, 1911-1999

Thinking of new opportunities is only half of the job, of course. You must also act on your ideas, or else they will die. Better to kill than be killed, so know when you’ve finished thinking. And recognize that the best way to get new ideas is by experimenting: trial-and-error, learning-by-doing. If you’re not equally strong in thinking and acting, then find people who complement you.

________

Regard it as just as desirable to build a chicken house as to build a cathedral.

Frank Lloyd Wright

American architect, 1867-1959

The fun of creation is a better motivator than the ambition of becoming immortal by completing immense, larger-than-life tasks. Immortality, and its more mundane cousin celebrity, should not bother you. It’s decided upon by others, therefore beyond your control. And it’s pursuit weakens the spirit. If you want to strive for immortality all the same, you should remember that building cathedrals is complex and time-consuming. No individual involved can be more than a cog in the machine. Would you rather be a small master or a huge valet? You will find out whether your chicken house has cathedral potential in due time. Don’t plan for it.

________

Another flaw in the human character is that everybody wants to build and nobody wants to do maintenance.

Kurt Vonnegut

American writer, 1922-2007

Having said that, many successful new businesses are not based on quantum leap inventions or jaw-dropping new designs, but on refinement or varieties of existing products and services. Innovation can be in unspectacular details which nobody has recognized so far. And staying close to the mainstream can be good business. Think of the restaurant or fashion trade, where seemingly trivial details can have a huge impact on customer satisfaction and small twists can create unique, profitable formulas. To take this even further, it requires a special business sense to leave well alone. The fashionable mantra of continuous improvement can become counterproductive. Know when to resist change. Know when it’s just fine to stick to a tried and true formula. Keeping that format alive and pristine can be no small feat in itself.

________

Fame and power are the objects of all men. Even their partial fruition is gained by very few; and that, too, at the expense of social pleasure, health, conscience, life.

Benjamin Disraeli

English politician, 1804-1881

Being an entrepreneur means that you choose to pursue your own dream rather than that of someone else. So fame, power and fortune should not, I repeat not be part of your dream. Not only because these values are indeed in short and variable supply, but also because they are controlled by the outside world and not by you.

3 Leadership

As soon as you have to show the way to employees or other people in different roles, such as customers, trade relations, politicians or other stakeholders, you will have to lead. Leading means setting a direction, creating belief and motivating people to do what they would not automatically do themselves. They may fear to enter unknown territory, fail to see personal short-term benefits or do not identify with a common goal.

________

It is observed that when a man is firm inside and gentle without, he is a healer. When he is hard outside and soft inside, he is useless.

American Indian legend

The world and especially the business arena can be a tough place. So grace under pressure is invaluable. People can put up with almost anything if it is brought to them in an understanding and gentle manner. All business leaders should possess healing ability in the sense that they are able to create comfort and confidence for the people whom they manage. Note the precise wording. Firm is better than hard and gentle is better than soft.

________

People in positions of power and privilege have a duty to perform at a higher level. If not them, then who?

Kathleen Parker

American newspaper columnist, 1951

Whether you call the shots at a small, local PR shop or at a software company employing hundreds or thousands, people will look to you for guidance. They may well hold you up to high standards, even though they may not stick to them themselves. What’s worse, they will swiftly copy your weaknesses. Whether you often arrive late at work, drive a monster truck for a car, have a drink too many every other day or bully on subordinates, these habits will be quickly adopted. Since everybody looks to you, the whole company will be permeated by bad behavior in no time. So mind the paradox: if you want to run your own show, you must be sure to set the right example at all times. In so doing, you may be required to give up a lot of personal freedom or at least some cherished habits. But this sacrifice will be well worth wile.

________

A return to first principles in a republic is sometimes caused by the simple virtues of one man. His good example has such an influence that the good men strive to imitate him, and the wicked are ashamed to lead a life so contrary to his example.

Niccolò Machiavelli

Italian political scientist, philosopher and diplomat, 1469-1527

Leading by example can be enormously rewarding. Seeing people whom you respect giving their very best, getting more out of them than they thought they had in them and maybe even converting some notorious sceptics and renegades to your cause can be highly satisfying. Loosening handbrakes and unleashing potential this way tends to be good for the business, too.

________

Whatever you do, you need courage. Whatever course you decide upon, there is always someone to tell you that you are wrong. There are always difficulties arising that tempt you to believe your critics are right.

Ralph Waldo Emerson

American philosopher, essayist and poet, 1803-1882

As an entrepreneur, you should positively ignore critics, especially those who have no stake in your business. Just as you should not accept easy advice from anyone who has no skin in the game, you should not accept easy criticism either, easy here meaning free from personal consequences for the critic. Most easy criticism is based on a cocktail of envy and ignorance, reflecting the mental state of the critic rather than the subject in question.

With your supporters, it’s a different matter. They do have skin in the game, because they already identify with you and therefore want you to be successful. It will rub off on them. Whether they are employees, customers or suppliers, your supporters have invested in a relationship with you. They look for ways to reap returns from that investment and to continue the development of mutual benefit. They enjoy staying employed by you, buying your company’s products or trading with you. Whatever they think is worth improving is worth noting. You don’t have any supporters? Then go out and develop some.

________

Nothing is less sincere than our mode of asking and giving advice. He who asks seems to have a deference for the opinion of his friend, while he only aims to get approval of his own and make his friend responsible for his action. And he who gives advice repays the confidence supposed to be placed in him by a seemingly disinterested zeal, while he seldom means anything by his advice but his own interest or reputation.

Francois De La Rochefoucauld

French writer, 1613-1680

There is one caveat, though. You ‘d better be sure whom you count as your supporters or friends, of course. And you need to be honest with yourself as well. Are you ready to accept well-intended, well-founded criticism from them? If your answer is yes, you are a rare breed. Most entrepreneurs can’t or won’t listen to advice. They are notoriously stubborn and self-centered. To a certain extent, they have to be.

________

Familiarity breeds contempt.

Aesop

ancient Greek fabulist c. 620-564 BCE

To lead is to be alone. Nowadays many entrepreneurs act as ordinary guys, wear casual clothes and behave informally with everybody around them. The fact of the matter is that they (you?) are usually decidedly egocentric and need their own space. That’s why they went into business for themselves in the first place. They cannot be too close to others, lest they lose their independence of mind and action. In an atmosphere of comradery they may occasionally suggest equal footing with the people they employ, but deep down everybody knows that this is just a charade. The entrepreneur wants to keep others at bay. Fortunately, the employees want this as well. That way they can project all kinds of desires and ambitions into the business leader from a safe distance,. They can bask in his charisma and his creativity without sharing the risks he is exposed to. This includes not just financial risks, but also the psychic pressure and reputational risks that go with being in charge. Think of being disgraced in the public eye, for instance, as soon as failure materializes.

________

There is a great man who makes every man feel small. But the real great man is the man who makes every man feel great.

G.K. Chesterton

Nevertheless, if you are an entrepreneur, you have the unique possibility to add new meaning to life. You may create products or services that people like because they meet previously unmet needs or needs that people were not aware of even having in the first place. You may create valuable jobs. You will be able to give your employees the idea that they are an important part of an operation which is really on to something. If you manage them well, they may develop themselves in ways they had not imagined previously possible. And finally, you may create return on investment for your shareholders. The highest reward for an entrepreneur is that he can take the world, or at least a tiny part of it, to a higher level.

4 Dealing with uncertainty and risk

Anything really worth doing is fraught with risk and uncertainty – if it weren’t so, everybody would be on the case. To be an entrepreneur is not only to accept risk and uncertainty, but to actively look for it and to embrace it. It is not avoidance but clever management of them that gets results. And what is risk, anyway?

________

The one permanent emotion of the inferior man is fear – fear of the unknown, the complex, the inexplicable. What he wants above everything else is safety.

H. L. Mencken

American journalist, satirist and critic, 1880-1956

We all have an inclination to play it safe and now and again to long for some smooth sailing. Nothing wrong with that. But we should avoid allowing this tendency to get out of control and degrade into fear. Fear is useless. If you must fear nevertheless, fear the results of inaction.

________

Doubt is not a pleasant condition, but certainty is an absurd one.

Voltaire

French writer and philosopher, 1694-1778

Only small minds are never subjected to doubt. So whenever you are not sure about something, you should more than anything else take this as a sign of intellectual prowess. Don’t be intimidated by your own skepticism. Rather use it sensibly, and allow your mind on occasion to be rendered uncomfortable. This avoids the bigger discomfort created by wishful thinking and by the continuous drive to be sure of everyone and everything. ‘Much mistaken, yet never unsure’ is the classic verdict about many unsuccessful middle managers who are doomed to remain stuck in the middle for the rest of their working lives.

________

If I had not gone into Monty Python, I probably would have stuck to my original plan to graduate and become a chartered accountant, perhaps a barrister lawyer, and gotten a nice house in the suburbs, with a nice wife and kids, and gotten a country club membership. And then I would have killed myself.

John Cleese

English actor, comedian, writer and film producer, 1939

What entrepreneurs indeed understand, like their artistic fellowmen, is that the biggest risk in life is not to take any.

________

Everybody talks about how they knew the Bond films were going to be a big success, but it simply isn’t true.

Sean Connery

Scottish actor, 1930

Don’t be intimidated by the successes of others, by the supposedly effortless, sure-fire way this success has apparently come to them, or by those who ‘knew it all along’. They most probably didn’t. Hindsight makes everything look easy.

________

Only those who risk going too far can possibly find out how far one can go.

T.S. Eliot

American poet, dramatist, literary critic, and editor, 1888-1965

Collecting bruises is inevitable. As long as they don’t leave painfully detracting scars, there is not much to it. So take a good hammering every now and then, and take it in your stride. It’s the only way to find out that you have deployed your full potential.

________

If a nation values anything more than freedom, it will lose its freedom, and the irony of it is that if it is comfort or money that it values more, it will lose that too.

W. Somerset Maugham

English writer, 1874-1965

Compare this to companies who are paralyzed by contemporary shareholder dictates such as maximizing profitability or Economic Value Added. In their hunt for maximum profit, they risk neglecting their core competencies (read: what they are really good at) and stand to lose their competitive edge. They take on immense risks through aggressive financing, loading themselves up with debt. Likely next stage of the drama is their profitability evaporates or disappears overnight. The reasons: lower customer ratings and lower sales, higher debt service costs or a killing cocktail of both.

________

If you take risks and face your fate with dignity, there is nothing you can do that makes you small; if you don't take risks, there is nothing you can do that makes you grand, nothing.

Nassim Nicholas Taleb

Lebanese-American writer, trader and risk engineering scientist, 1960

There is uncertain profit, but certain honor in taking risks. Not taking any risks means that you only want to exploit what’s already there. You want to benefit from risks which have been taken or are still being taken. This is the quality of a profiteer. No entrepreneur with a grain of self-respect could accept that.

________

Courage is willingness to take the risk once you know the odds. Optimistic overconfidence means you are taking the risk because you don’t know the odds. It’s a big difference.

Daniel Kahneman

Israeli-American psychologist, 1934

But let’s not take senseless risks. Try to assess the odds at all times. Do your homework. Don’t decide about anything on a whim. Be courageous, not overconfident. There is no checklist on courage. Ask your friends, your partner or your associates how they honestly rate you. Or find a good, impartial sparring partner with no vested interest.

5 Being creative