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What Can You Learn About Running a Business By Watching a Hockey Game?

Discussing How To Start a Small Business at Trent University

A few weeks ago, I had the great privilege of attending a class in the entrepreneurship program at Trent University, taught by Professor Cammie Jaquays.

The students in the course were given an assignment in which they were to apply the principles for starting a new business as set out by Prof. John W. Mullins in his book entitled “The New Business Roadtest” to the process that I followed in creating one of the first spas for men in the world, as chronicled in my book entitled “Don’t Let Your Dream Business Turn Into a Nightmare”.

The students were divided into six groups, each of which made a PowerPoint presentation in which they considered such questions as “What did Mr. Stransman miss?”, “Why did this business not succeed?”, “Did this venture have a chance of success?” and so forth.

It was a fascinating evening, and I learned a lot from the students, and hope that they learned something from me.
Afterwards, I received the following comment from Prof, Jaquays, for which I am very grateful and of which I am extremely proud:

“The students enjoyed the experience of having you come to the classroom, the exercise, analyzing your book and creating the feasibility study. What was most enjoyable, and what I appreciate the most, was the time and effort you took to attend the night of presentations. The students so appreciated the fact that you were there for questions and input. These students are in their 3rd and 4th year, so the ability to bring the ‘real’ world to their studies was a great experience”.

I was also very pleased to receive a note from student Nathan Hogle, who said “Your book was great. I enjoyed reading it. It was a really easy read.”

When I sat down to write my cautionary tale for entrepreneurs, I never imagined myself in front of a class of students studying entrepreneurship at the university level, but you just never know what can happen when you write something from the heart.

I hope to have many more such experiences in the future.

“What Was the Biggest Mistake You Made in Your Business?” Part 2

I had the great honour, on Tuesday of this week, of attending a class in entrepreneurship taught by Prof. Cammie Jaquays at Trent University in Peterbrough, Ontario.

Prof. Jaquays divided the students in her class into six groups, and each was assigned the task of reading my book, “Don’t Let Your Dream Business Turn into a Nightmare”, in conjunction with a book by Prof. John W. Mullins, entitled “The New Business Road Test”, and examining my entrepreneurial venture through the lens, if you will, of the “seven domains” road test for new businesses which Prof.Mullins outlines in his book.

The seven domains in Prof. Mullins’ model include two “Market domains”; market attractiveness as a whole, which is a “macro-level” evaluation of the market, and the “target segment benefits and attractiveness” of the proposed new business, which is a “micro-level” examination.

Similarly, there is a macro-level “Industry domain” - which refers to the attractiveness of the industry as a whole, and a micro-level Industry domain consideration, which is the “sustainable advantage” offered by the proposed new business in that particular industry.

In the “Team domain”, there are three areas of examination: 1) Mission, aspirations and propensity for risk 2) Connectedness up, down and across the value chain and 3) Ability to execute on Critical Success Factors.

As Prof. Mullins points out in his book, there is much that can go wrong in starting a new business venture, and almost any mistake - certainly a critical mistake - can doom the entire enterprise. Hence, the “road-test” is not a check list, and there is no “score card”. Achieving a “score” of 90 out of 100 would not be any guarantee of success, if the missing 10 points were in the “ability to execute on critical success factors”, for example.

Prof. Mullins’ book is a very informative and valuable guide for aspiring entrepreneurs who may be unaware of all of the factors that determine the success or failure of a new business -or the degree to which the odds are stacked against any new business succeeding - and the diligence with which the students in Prof. Jaquays’ class approached the assignment, and the insights which they came up with with respect to my business venture, were delightful, if not occasionally painful at the same time.

There are many mistakes which an entrepreneur can make - especially a first-time entrepreneur - and I certainly made a number of them.

But what was the biggest mistake that I made?

As Prof. Mullins states in his book, investors come in two categories - one is the “Three F’s” - friends, family and fools -and the other is professional investors.

In the case of my business venture, I would say that my investors were in the latter category, which is to say that they invested in my new business concept more out of a desire to make money, than out of a desire to help me, although there was a personal relationship with one of my two investors.

As Prof. Mullins points out, experienced investors know that most new businesses will fail. The statistics tell them that. Hence, they approach every plan for a new business with a hefty dose of scepticism.

Now, consider this: if you approach a basically skeptical investor with a business plan for a new venture which he already knows has a greater chance of failing than succeeding, how are you going to change that skepticism into an overwhelming passion and exuberance?

You might transform that skepticism into a grudging level of cautious optimism, but that is about it.

You are just not going to get your investors to feel as passionate and committed to your idea as you are, in my opinion, and, certainly, in my experience.

And so what happens when investors put up money for a business venture for which they do not have the same level of passion and commitment as the “visionary entrepeneur” whose idea it was to create the business - in other words, you?

“It is all too common for venture capital investors who like an opportunity to tire of the team they back and bring in a new one at the first sign of trouble.”

So writes Prof. Mullins.

And that is exactly what happened to me with The Men’s PowerSpa.

My investors, who never really believed in the concept of the business in the first place, eventually got tired of me and replaced me with - themselves.

Have a look at the website at http://www.themenspowerspa.com/ to see how they are doing.

It is March 12, and they are still promoting Valentine’s Day.

So, what was the biggest mistake I made in my business?

If you read my book and Prof. Mullins’ book, you may come up with your own answer.

But, as you can see, I have come up with mine.

The Bias Against Stories of Unsuccess

I received an email recently from a very good friend who had read my book, and is currently reading the 2007 work by Nassim Nicholas Taleb entitled “The Black Swan”.

My friend cited the following passage in Taleb’s book which he felt pertained to my book:

Numerous studies of millionaires aimed at figuring out the skills required for hotshotness follow the following methodology. They take a population of hotshots, those with big titles and big jobs, and study their attributes. They look at what those big guns have in common: courage, risk taking, optimism, and so on, and infer that these traits, most notably risk taking, help you to become successful. You would also probably get the same impression if you read CEO’s ghostwritten autobiographies or attended their presentations to fawning MBA students.

Now take a look at the cemetery. It is quite difficult to do so because people who fail do not seem to write memoirs, and if they did, those business publishers I know would not even consider giving them the courtesy of a returned phone call (as to returned e-mail, fuhgedit). Readers would not pay $26.95 for a story of failure, even if you convinced them that it had more tricks than a story of success. The entire notion of biography is grounded in the arbitrary ascription of a causal relation between specified traits and subsequent events. Now consider the cemetery. The graveyard of failed persons will be full of people who shared the following traits: courage, risk taking, optimism, etc. Just like the population of millionaires.

Rather interesting, wouldn’t you say?

I can certainly attest to the bias against stories of “unsuccess”, as I was advised by a number of people that no one would either publish or purchase a book with the negative-sounding title “Don’t Let Your Dream Business Turn Into a Nightmare”, not to mention a website called http://www.mybusinessnightmare.com/. However, I must also add that my phone calls and emails to the three Canadian publishers to whom I submitted my book were returned, and, in fact, the Managing Editor of one of them said that my book was “one of the most original business books” he had ever read”. In fact, it was his comment that my book “belongs on the syllabus of every M.B.A. program in the country” that inspired me to self-publish and self-market the book.

I should also state that people have purchased the book, as well, although I have only just begun to figure out what it takes to publish and promote a book yourself. I haven’t done the latter - I am just beginning to figure out what I need to do.

What I find most interesting about the passage from Taleb’s book cited above is the inference that books about failure ( I prefer to use the term “unsuccess” to refer to my book as the business I founded has not failed) can be as instructive, if not more instructive, than books dealing with success. That is the very reason why I wrote my book, and subtitled it “A Cautionary Tale for Would-Be Entrepreneurs”, and also why I hope that everyone who is either considering starting a small business or studying entrepreneurship in school will read my book.

As for the contention in Taleb’s book that cemeteries are filled with unheralded “failures” who had just as much courage as famous “successes” - well, I’m not there yet, nor am I in any hurry to get there, but I appreciate the sentiment.

Bottom line: read my book and let me know if you agree with Nassim Nicholas Taleb’s comments. And read his book “The Black Swan” too. Sounds interesting.

Winning the Battle to Tell the Truth

In my last post, I described the battle in which I am engaged to see to it that the case study which was created by the Ivey School of Business - one of the top business schools in Canada - based upon my book “Don’t Let Your Dream Business Turn Into a Nightmare” remains available to students at Ivey and at other business schools around the world which may have interest in using it in their programs.

In the spring of 2009, I submitted a copy of my book to the Ivey School of Business at the University of Western Ontario, with a view to having it added to the curriculum of their courses in entrepreneurship. In May, I received an email from the Executive Entrepeneur in Residence at Ivey, expressing interest in adapting my book - or my story as I told it in my book - into a case study, as Ivey is one of a number of business schools that uses the “case study” methodology. The case study was written in the fall and posted on the Ivey Publishing website in November of 2009. In December, I received an email from Ivey informing me that my former friend and associate, who is now the president of The Men’s PowerSpa, had lodged a complaint, on the basis that the majority owners of the company did not give their consent to use the case study that bears the name of the company.

My book is a very personal account of one man’s entrepreneurial dream that turned into a nightmare. I wrote it as a cautionary tale to warn other would-be entrepreneurs of the dangers of starting a business - especially a “dream business” - with someone else’s money. Someone who may not share your passion or vision.

I did not expect the majority shareholders of the company that I founded to like my book because it is not a very flattering portrait of the way that people can behave when money is on the table. The lesson of my book is that when money is involved, a number of values which we cherish, such as fairness and even “niceness” can go out the window. You might think that all is fair in business, but I don’t, and that is why I wrote my book.

Prior to self-publishing my book, I consulted with several lawyers, and was advised that as long as my book was truthful, I could defend myself against any claims of libel. Since my book was truthful, I went ahead and published it. And the Ivey School of Business deemed that the story that I told in my book - the story of how my “dream business” turned into a nightmare - was of value to the students at Ivey and at other business schools around the world.

But in December, because the majority owners of the business had not approved of the use of the case study, they pulled it.

This, to me, is analagous to a newspaper pulling a story about the problems at Toyota becasue the owners of Toyota don’t like it. Talk about freedom of the press.

The upshot of all of this is that, as of this week, I was informed that the case study will go forward, in a disguised version, so that readers will not be able to recognize The Men’s PowerSpa.

So, somewhere in the future, students of entrepeneurship at Ivey and other business schools around the world may get to read the story of an entrepreneur who had a dream, and saw that dream turn into a nightmare.

It won’t be my story the way I told it in my book. But it will be as close as it can be, thanks to the majority owners of The Men’s PowerSpa.

A couple of guys who should be ashamed of themselves.