Think Agile: How Smart Entrepreneurs Adapt in Order to Succeed

Think Agile: How Smart Entrepreneurs Adapt in Order to Succeed

by Taffy Williams

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Overview

Think Agile: How Smart Entrepreneurs Adapt in Order to Succeed by Taffy Williams

Funding falls apart. A similar product is unveiled by a more established company. A key employee jumps ship to work for a competitor. These are the unexpected obstacles that derail even the most promising new ventures. Entrepreneurs determined to keep up with today's constantly changing business environment need to stay nimble enough to shift their strategies, products, and services on a dime. Yet many fail to master this essential new mindset: agility. Featuring real-life case studies and invaluable tools, Think Agile helps entrepreneurs assess their level of flexibility and learn to be open-minded and option-oriented in key areas including: Funding sources; Launch timetables; Planning; Repurposing everything from products to people to names. When entrepreneurs lock themselves into one strategy, one product, one distribution method and one way of thinking about their business they limit their potential, and lower their chances of capitalizing on economic, industry, or market changes. Think Agile is an indispensable guide to an undeniably essential new skill.

Product Details

ISBN-13: 9780814434307
Publisher: AMACOM
Publication date: 11/19/2014
Pages: 224
Product dimensions: 6.00(w) x 9.10(h) x 1.00(d)
Age Range: 18 Years

About the Author

TAFFY WILLIAMS has been a successful entrepreneur and advisor to entrepreneurs for over 30 years. The founder and president of Colonial Technology Development Company, which assists start-ups in technology commercialization, he writes the popular "Startup Blog," as well as articles for Examiner.com.

Read an Excerpt

CHAPTER 1

Agility in Turbulent

Times

In the past, most successful entrepreneurs possessed a single-minded focus that served them well. Sometimes obstinate and other times obsessive, they drove toward their goals with unwavering commitment. This approach to business—effective in a time of relatively slow change, moderate complexity, and more local than global competition—helped them overcome obstacles and seize opportunities.

While entrepreneurs still benefit from being driven and single-minded, such a mindset can also be a major handicap in our current environment of great volatility and unpredictability.

Technological breakthroughs, economic shifts, and other changes occur seemingly every week. There’s the adage Man plans, God laughs. Substitute entrepreneur for man and you understand why it’s no longer possible for entrepreneurs to lock unwaveringly onto a product, a marketing approach, a business plan, a funding mindset.

Agility is essential for entrepreneurial success. I’ll share two stories that demonstrate why this is so.

Though Steven Jobs was an extraordinary and unique business pioneer, he was also a classic entrepreneur in many senses.

Early on, he was obsessed with creating the best possible personal computer, and his drive resulted in some remarkable products.

But when he returned to Apple after years of exile, he recognized that things had changed. Plenty of people were still buying personal computers, but the market had topped out. He noticed the emerging mobile computing consumer segment, though, and was able to shift his thinking—and the direction of the company—to serve this market (among others). Jobs’s flexibility enabled Apple to dominate the space for several years.

Arsen Avakian founded Argo Tea, a retail tea seller, in 2003

and now is the head of a 27-store chain with $20 million in revenue.

Initially, Avakian’s vision was to make Argo stores the tea equivalent of Starbucks. This hugely ambitious vision, however a did not fit with changing market and economic realities. It also didn’t jibe with Starbuck’s acquisition of tea retailer Teavana and the coffee company’s plan to open tea bars. So instead of trying to become a giant in the industry or do battle with one, Avakian shifted gears. In a September 9, 2013, article in the Chicago

Tribune, he was quoted as saying that Argo wanted to be the

“Apple of tea . . . where you will fall in love with the brand.” To

that end, Argo has started a bottled-tea business in addition to their retail establishments.

Making these shifts sounds easier on paper than it is in reality.

Entrepreneurs often fall in love with their business ideas, their visions for a business, and their theory of how to make their companies successful. To let go of something they love and believe in is difficult; to change it in any way seems disloyal, fickle, and even weak.

Yet letting go requires strength; it’s an acknowledgment of a new reality for an entrepreneur. Agility facilitates movement from the tried-and-true past to the changing present.

NOTHING STAYS THE SAME FOR LONG

It’s not just that the pace of change has been accelerating, but the types of changes are expanding as well. From the economy to technology to the global marketplace, everything is evolving at a fast clip. More than that, many of these changes aren’t predictable.

Mobile technology, big data analytics, and social media may seem as if we should have seen them coming, but in fact only hindsight makes it appear that way. Ten years ago, when people used cell phones for traditional phone-to-phone communication a few would have predicted the widespread use of smart phones in ways that make phone conversations a secondary or tertiary function.

And until the economic downturn of 2008, the majority of small businesses that required financing sought loans. Who could have predicted that these loans would become almost impossible for many startups to obtain?

In the face of these rapid and widespread changes, entrepreneurs have no choice but to be flexible. If entrepreneurs are unable to shift direction and find new sources of funding, or if they can’t reformulate their products when a Chinese company brings out a similar one at half the price, they’re out of luck. But before we look at what agility means and how it translates into specific business behaviors, let’s review some of the types of changes that make agility imperative:

- Funding. It’s not just that banks have tightened their purse strings, but that venture capital firms have diminished in number;

and those that remain are more selective about who they fund.

We’ve seen the rise of angel investors—wealthy individuals or groups who fund ventures in exchange for a share of ownership.

We’ve also witnessed the rise of what I refer to as “startups for sale”—cash-strapped entrepreneurs who launch companies on a shoestring with the hope of becoming acquired by a large company.

In this way, they gain the finances and other resources necessary to grow their idea into a profitable enterprise; “startups for sale” has become the dream goal of many entrepreneurial Internet companies. And then there’s the crowdfunding movement—people who use the Internet to launch their ideas for new businesses and attract financial backing from individuals who see potential in that idea; Kickstarter is the most well-known example. We’ll focus on funding options that have arisen in recent years in Chapter 5 a but as this brief description indicates, the environment is completely different from how it was as little as ten years ago.

- Technological. New technologies impact entrepreneurs in every field in countless ways, and they require all types of adaptations. On the most basic level, technological innovations have caused entrepreneurs to change the way they conduct daily business. For instance, Texas Instruments introduced handheld calculators around 1967 and IBM introduced its first personal computer around 1981. In 1973, a scientist working for Motorola successfully made the first portable handset, and by 1987, over 1

million cell phones were in use in the United States. These devices are now part of our daily existence while the older technologies are phasing out. In the 1990s, the fax was the dominant mode of communication in business. Today, it is quickly going the way of the electric typewriter, as email and other Internet forms of communication have become dominant.

The social media demand that entrepreneurs rethink customer relationships; and information technology necessitates that competitors and potential competitors know about your product breakthrough almost immediately after you achieve it. Virtual meetings across continents routinely take place on Skype and other sites. New technologies are being introduced every day, and today’s smart phone will be tomorrow’s fax machine.

Entrepreneurs who aren’t able to adjust their businesses to capitalize on these technological changes will be left behind.

- Regulatory. The EPA, FDA, USDA, and SEC are just some U.S. agencies that have been active in altering their regulations in recent years—and aggressively pursuing those who fail to comply. Any small business that has grappled with the SEC

regarding 2002’s Sarbanes-Oxley legislation is well aware of how regulatory changes require all sorts of new policies and procedures.

Many times, agility is required just in terms of time and resources allocated to respond to those changes. In other instances, entrepreneurs may need to make major shifts in their business operations. New environmental regulations, especially a can create all sorts of issues for small companies: the material you’ve been planning to use to manufacture your product has just been ruled an environmental hazard, the FDA decides to create new nutrition regulations, or the Department of Energy places greater restrictions on nuclear energy creation and use.

- Market-by-Market. Entire industries are being transformed through global, virtual, and other means. In the medical field, increased scrutiny by insurers is cutting into medical business revenues. The ability to reduce hospital re-admission rates and the shift toward personalized medicine are causing healthcare professionals to alter the way they do business. Small medical practices have aligned with other groups to create larger medical practices in order to have greater clout with insurers. In other fields ranging from agribusiness to software to beverages to retailing, transformations are also taking place. While big corporations in these fields are affected, the entrepreneurs often are the ones who must be the most agile. Big companies have the size and resources to change more slowly and still survive; smaller entrepreneurs must adapt or perish.

- Competition. Until relatively recently, some entrepreneurs could occupy a market niche and expect minimal or at most moderate competition. Today, competition has heated up to the point that this is no longer possible. In a world where everyone is in global competition and technology makes it much easier for companies to knock off products, services, and unique selling propositions, entrepreneurs must be nimble enough to fend off competitors. This may mean coming up with a new pricing strategy a redesigning your packaging, changing product formulations a or myriad other responses.

Consider a small, entrepreneurial pharmaceutical company that is developing a new cancer drug. They’re planning on investing

$50 million in its development and are testing the drug with patients who have not been helped by other therapies. They’re tremendously excited by initial results—the drug seems to produce a 24 percent improvement in survival rates—and the company begins working toward FDA approval. Then, news arrives that an Australian pharmaceutical company has gained approval for a similar product. It may be that this competitor’s new product makes it impossible to continue development. More likely a however, is that this competitor’s success simply means that adjustments must be made. It could be that the Australian company’s product will open up a new market, and there’s a strategy to piggyback on their initial efforts. It may be that there’s the possibility of a merger. It may be that the entrepreneur’s product will deliver superior results during testing. The entrepreneur needs to be open to and assess all possibilities and then adjust the development strategy accordingly.

Table of Contents

Contents

Acknowledgments xiii

Introduction 1

PART I: UNDERSTANDING WHAT YOU NEED TO

KNOW BEFORE ADOPTING AN AGILE WORKSTYLE 11

Chapter 1: Agility in Turbulent Times 13

Nothing Stays the Same for Long 15

Surprises and Complexity 19

The More Things Change, the More Entrepreneurs Thrive 23

Ignore the Past at Your Peril 25

Putting Concepts into Action 28

Chapter 2: Reaping the Benefits of Agility 32

Pivoting to Make Effective and Efficient Decisions 33

Cultivating a Flexible Mindset to Overcome Indecision 36

Opening Up a Universe of Possibilities 37

Rebounding from Mistakes and Failures 40

Adapting to Changing Times 42

Considering Diverse Approaches to Funding 45

Increasing Speed of Action through Agility 48

Putting Concepts into Action 50

Chapter 3: Assessing Your Agility 54

Unconscious Reliance on the Tried and True 55

Assessing Your Fear of Failure 57

Developing an Awareness of Rigid and Agile Tendencies 60

Putting Concepts into Action 67

PART II: INCREASING YOUR AGILITY

EXPONENTIALLY 71

Chapter 4: Planning for the Unexpected,

Preparing for the Unpredictable 73

Allowing for Flexibility and Vision in Your Business Plan 74

How Good Outcomes Can Result When Plans Are Flexible 77

Thinking Ahead with a Plan B . . . and C and D 78

Preparing for the Unpredictable 81

Putting Concepts into Action 89

Chapter 5: Exercising Funding and

Financial Options 90

Becoming Aware of Funding Options 91

Fighting Financial Biases and Reassessing Prior Funding Methods 97

Managing the Dilution-Valuation Paradox 100

Stretching Your Cash Reserves 103

Planning an Exit Strategy 105

Putting Concepts into Action 109

Chapter 6: Working with Various Deadlines and Milestones 112

Identifying Deadlines Entrepreneurs Face, and Determining

Their Feasibility 113

Learning to Work with Various Deadline Mentalities 116

Avoiding Date Inflation 118

Negotiating Imposed Deadlines 119

Keeping Your Ego in Check 122

Putting Concepts into Action 125

Chapter 7: Repurposing Products, Services a and People 127

Introducing Three Categories of What May Be Repurposed,

Plus One 128

Paying Attention to Unexpected Possibilities 134

Using Change as a Catalyst for Repurposing 137

The Three Rs of Repurposing: Repositioning, Redirecting a and Rejuvenating 139

Licensing Tactics 141

Putting Concepts into Action 143

Chapter 8: Overcoming Entrepreneurial

Inflexibility 146

Conquering Factors That Can Lead to Inflexibility 147

Vanquishing a Disheartening Business Failure 148

Getting Beyond the “Foolproof Formula” 150

Surmounting Complacency After Sustained Success 151

Surviving Personal Financial Problems 153

Shaking Competitive Lethargy 156

Defeating Crippling Indecisiveness 157

Refusing to Get Stuck in the Past 160

Putting Concepts into Action 161

PART III: MONITORING AND TROUBLESHOOTING 165

Chapter 9: Learning How to Lead and Manage with an Open Mind 167

Practicing Managerial Creativity 168

Knowing What You Don’t Know and What You Do Know 171

Best Practices of Agile Leaders 174

Developing a Team Mentality 178

Deciding When It’s Time for Leadership Change 180

Putting Concepts into Action 183

Chapter 10: Stretching Toward the Future 186

Tracking Four Key Trends 187

Adapting to Mind-Boggling Innovations 190

Moving from Rugged Individualism to Collaborative Mindset 194

Becoming an Information Magnet 197

Putting Concepts into Action 201

Index 205

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