Berkeley Geddes, successful entrepreneur, CEO of Grow America Ventures and innovator of DooBizz.com gave a powerful presentation entitled, “Seven Foundational Pillars Directly Linked to Entrepreneur Success.”
He compared business entities to mathematical formulas.
“Everything in life can be modeled in mathematics. When you boil complex equations down to their lowest common denominator, you simplify the equation so that you can solve it.” Business models are also complex mathematical equations. They have multiple parts, one or more problems to solve, and they need to be reduced to the least common denominator in order to predict where it is going. In analyzing an entrepreneurial business model, Berkeley Geddes and Alan Hall were able to determine the 7 pillars that every entrepreneur needs to understand and follow. These key elements make up a successful business. Berkeley shared the 7 pillars to create viable, successful businesses.
Pillar #1 – The Importance of Good People and Good Ideas
There needs to be a firm foundation in both the country and in the people in order for entrepreneurs to succeed. The foundation of entrepreneurism is hope and faith, persistence, and hard work.
The Country Foundation has to rest on the following premises:
- Fundamental respect for human life The nation that cares about the quality of life clears the regulatory barriers that hinder entrepreneurial innovation and growth.
- People are encouraged to self-determine, build their own vision for being The nation that values and encourages entrepreneurs is on the path to economic growth.
- People are protected in pursuing their dream The nation that protects entrepreneurs’ ideas and promotes innovative thinking solves societal problems.
- People enjoy the majority of the fruits of their labor The nation that allows entrepreneurs to enjoy the fruits of their labor promotes the continual improvement and advancement of their people’s standard of living.
The People Foundation rests on the following premises:
- Fundamental respect for human life The people must value all human life and promote policies that increase the quality of life.
- Faith based The people must recognize that all progress is dependent on faith; that by following correct, true principles, success in life and business can be achieved.
- Family centered The people who have peace of mind are those who achieve success in their family and also in their business.
- Hard working The people who have an idea, act on it in faith and hope, and persistently strive to realize it, will add value to their family and nation.
Currently, the country is not in a healthy or wealthy corner. We were shown a quadrant with an x and y axis. The confluence of the axis was the low point for both. The further out one went the greater the result. The x axis = health and the y axis = wealth. So when our country’s population is plotted, the largest group is in the quadrant that is labeled high wealth and low health. There’s a tiny group in the quadrant labeled high health and high wealth, another slightly larger but still small group in low wealth and low health, and a fairly large group in high health and low wealth. The results suggest that we have become a society where the majority is relying too much on others to solve problems and not using their own intellect and skills to contribute solutions to our problems.Our nation values certain important professional disciplines, and these disciplines are rewarded accordingly. We currently provide certification through education to lawyers, physicians, mechanics, barbers, cosmetologists, nurses, other medical professionals, contractors, and building trades, but there is no education and certification for entrepreneurs. It is beginning to happen, but sparsely. It would seem, as a nation, we don’t value or promote entrepreneurs, yet entrepreneurs are the very ones who build the economy of our nation and provide innovative solutions that help the welfare of our people. What is wrong with this picture?It was noted that the wealthy do not have enough money to buy the rest of the people into the healthy and wealth corner. However, by teaching the first pillar, the people will rally and move themselves into the healthy and wealthy corner of the quadrant, thus moving their country there as well.A person needs to determine for himself what are his values and goals and then build his own vision. While doing so he needs to have a fundamental respect for others, make sure he builds on his faith, keeps himself family centered, and is willing to work hard to achieve his vision.
Pillar #2 – Mentor
One of the most important things an entrepreneur needs to do is to link up with an experienced and talented mentor as soon as possible in his or her venture. It is more important to have a mentor who can give you important advice than to have a financier who can hand you a check. Mentors make it possible for you to be successful. Listen to them, act on their advice, and gratefully thank them. And then compliment your mentor by sharing what you have learned with others.Berkeley shared what happened when he met his mentor. He had been given Jim’s name as a source to get additional money that he needed to keep his new business keep going. When he sat down with him and answered what seemed like hundreds of questions, he was just focused on doing what he needed so that he would be able to get an investment of $5000 for his business. Finally, the question came, “What do you want from me?” Berkeley asked for the money. Jim asked him, “If I write you a check for the money, will you follow my advice?” Berkeley thought for “a moment,” suspecting a trick question. Then he answered, “Of course I’ll follow your advice. Can I have the money?” Jim replied, “If I give you the $5000, you’ll be back in 6 months for another $5000. What I’m going to give you will put your business on the road to success if you follow it.” Then he proceeded to tell Berkeley three things to do to turn his business around. He drove the hour home and for the first 45 minutes he stewed about his failure to bring money home to a family that desperately needed it. Then he thought about the ideas he’d been given, and as he pondered them, new hope grew in him. By the time he entered the door, he was bursting with new found faith. He implemented the plans and within three months, they were able to pay off all their debts. He went back and met with his mentor every month and by the end of the year, his mentor asked to be allowed to invest $100,000 in his now successful business. They went on to be successful partners in a number of businesses.
Get a mentor and meet with him or her often. And most importantly, implement their advice and counsel so that you, too, can be successful.
Pillar #3 – The Optimal Path
You need to align your efforts with the optimal path, and the optimal path for your business is the one that leads to sustainability. It may not be a straight line, but you need to follow it, or you are wasting your precious time and others precious money. What you do, physically, puts you on the right or wrong path. Everyone fails at one time or another. Learn to “fail forward” quickly and move on. Once you do move on, you increase your chance for future success. As you implement the mentoring, training, and education you have and are receiving to allocate your resources, you learn when to put in time and energy and when to put in money to keep you on or close to the optimal sustainability path to success.
This optimal sustainability path is defined by the time and energy (x axis) you put in and the money (y axis) you are able to apply to your business. Initially, you may need to put in a lot more time and energy, because there isn’t as much money to keep you following the optimal sustainability line going up toward your success goal. As more money comes in, your current path will bend up toward the optimal sustainability path, and you can then put in the needed amounts of time and energy, and money to keep your path moving steadily up in close proximity, sometimes above, sometimes below your optimal sustainability path.
Pillar #4 – Each Optimal Sustainability Path is Unique
There are common elements to every optimal sustainability path, but there are always unique elements.
- Your sphere of influence, the people around you—friends, family, colleagues, mentors, educators, fellow business owners
- Your education, obtained from programs, training, experience, and observation
- Your experience, gleaned from jobs, training, successful and failed businesses
- Your level of preliminary funding, from bootstrapping, friends and family investment, microcredit loans, supplier loans, bank loans, angel investment
- Your industry or ideas, the NAICS classification of businesses and ideas
- Your product(s), Is it just a product? How competitive or unique is your product in the marketplace?
- Your service, Is it just a service? Whom do you serve? What is you unique service point?
- Your product and service, Is it both product and service? What is the relationship—a product that serves your customers, or a service with a line of products?Your country and state, Where do you live and how does that affect your business marketing?
All the above determine both the common and unique sections of the best path to your business success.
Pillar #5 – Education and Experience Matrix
We were shown a four quadrant matrix of entrepreneur demographics. The graph showed the level of experience and education of entrepreneurs. With experience being the “y” axis and education the “x” axis, the lower-left quadrant, at low and low, contained 85% of the entrepreneur companies in the world. These entrepreneurs are low in experience and low in education, and they receive the least help, which results in the greatest failure rate.
Most of the help provided to entrepreneurs is geared to entrepreneurs who are high in education and high in experience, the upper-right quadrant where the other 15% are located. The chances of success are much higher for entrepreneurs who are high in education and high in experience, especially with all the help that they get. Not only do they get help, but many resources are geared to those who have a college education, so they are able to understand and implement what they read on their own. Berkeley pointed out that Stanford has an entrepreneur business resource site. However, the information is too often written in academic terms and language that the average person is unable to decode.
Two fundamental changes must occur for the 85% to be brought up to the success level of the 15%. The information available must be rewritten at the sixth and seventh grade level so that all entrepreneurs can understand what they read and learn on their own. Lower education and lower experience can be addressed by bringing in the right mentors, as well. They can help you quickly achieve the education you lack. There are core business principles that can be a huge barrier to success if you don’t understand them. You usually find out what you don’t know when you attempt to do those things you think you know. Entrepreneurs must know their strengths and their weaknesses and be ready to hire to replace their weaknesses.
This lack of experience can be addressed by bringing a subset of the right people forward at the precise time that they are needed. That’s when having the right mentor at the right time can make all the difference between success and failure in your business. Doobizz.com focuses on providing these experienced mentors to the entrepreneurs who start 85% of the companies. This includes addressing all education and experience needs of these entrepreneurs that keep them from succeeding in their businesses.
Pillar #6 – The Entrepreneur Life Cycle
If you are prepared, your business life cycle will have a long tail. Successful businesses continue to reinvent themselves to lengthen the tail. Learn the language of your idea and garner support. At this point, Berkley showed us several charts with overlays that illustrated the entrepreneur life cycle. They showed the path of growth of any business idea from start to a mature business. There is a drop below a revenue potential line at the beginning. This descending line had two sections: the first was characterized as the area where the entrepreneur, family and friends bootstrap the business until it reaches a Point of Merit, where it is proven viable. At this point, the entrepreneur hasn’t broken even on the investment, but is selling sufficient services or product to show viability. On average, it takes 3 months to a year to get to this point, where your revenue is growing faster than your expenses.
This Merit Point begins the second section of the descending line. This is where cash flow becomes a problem and you’re in a race to prove that your business will make enough money to meet your expenses. To get through the cash shortage that threatens to stop you, a loan or investment is needed. An angel investor or a bank will loan money at this point. This will usually carry the business on down to the Proven Point.
Once you get to the Proven Point, another decision must be made. Do you want to let your business naturally grow and follow an ascending growth line or do you want to scale it and follow a continuing descending line as you take on additional investors? Letting it naturally grow means settling for lesser revenue. Scaling puts your business on the hyper growth path that descends a bit further before turning up in a fast and often steep growth rate. This is the point when you talk to venture capitalists about investing $1-10 million. But you do this only if your hyper growth rate will be at least 10 times what the natural growth rate would be without the investment money.
As you travel along the life cycle curve, you continually need to forecast your revenue potential so you can make the right decision at the points (above).
Pillar #7 – Power Levers
To move any object with a fulcrum and a lever, you have to place the fulcrum in the best position under the lever to get the maximum leverage power to lift or move it. You need to know where to place the fulcrum and understand the proper length of the lever to accomplish the job you are attempting.
There are three things you need to do to make proper use of levers and fulcrums in your business.
- Know the right lever for the right job. (Levers are the techniques that help you document and determine if you have a good idea-50,000 foot view.)
- Use the right fulcrum (The processes you follow, including the business plan, market research, operations plan, and product and service development).
- Place the lever and the fulcrum in the right place to make your business work (Sacrifice time and money—bootstrap, execute marketing and sales plan, handle operations—accounting, legal, and administrative functions, and monitor the health of your business.).
Are you willing to do all the above on your own? There is a way to make this easier for you to successfully accomplish. Use mentors who know what you lack and can help you choose the right levers and the correct fulcrum. They will make it possible for you to pull those power levers to execute the common core elements of your business.
DooBizz.com has 83 Power Levers in the doobizz.com Tree. These are the common core elements for successful entrepreneurs. Using them will give you the mentor help you need for your business to be successful. You are taught everything you need to know and need to do to be successful. You will learn how to use the Power Levers to your advantage!
And the most important point for struggling business persons, DooBizz.com is free to entrepreneurs. Berkeley also described the many resources available to entrepreneurs on the website. He invited everyone to visit the site and sign up for their free account.
Several people wondered how they would make money if they were giving away their services free to entrepreneurs. Berkeley said they had identified 54 channels of revenue. A number of revenue sources come from banks. He noted that bankers refuse to fund any good ideas at the start of your business. They send you out the door with the comment to find your own funding, and you never return to them. DooBiz gives them a way to manage the relationship as the DooBiz tree utilizes the 83 power levers to help you get your business to a place where you are qualified to get the loan services the bank can provide you. In exchange for this service to the bank, the bank pays DooBiz a lead generation fee, along with an added fee for every transaction the new business does with the bank.
Providing this kind of support to the 85% of entrepreneurs, who are most likely to fail, will help bring America back to greatness. Entrepreneurs are the job engine for American. They have always been the source of our innovation, and our greatest companies have come from entrepreneurs. When entrepreneurism is again strongly supported in America, we, as a people, will arrest our decline, and our quality of living will again rise.