StreetSmart Entrepreneuring

Introduction - Getting Ready
Discontinuous Innovation
Not Incremental Improvement to:
Light Bulbs
Horses and Carriages
Letters and Postal Service
Typewriters, Calculators
and Filing Cabinets
Telephone, Mail, Catalogs
and Libraries
To just survive, businesses must
demand the same quality and value
from their managers and employees
as their customers demand of them.
  • If you don’t have the passion, energy and commitment to entrepreneurship,
    go get a job.  If you’re unsure, get a job working for an effective entrepreneur.
  • The purpose of your company is to create and serve customers.  Creating
    wealth is your reward for doing this well.
  • You lead, not manage entrepreneurial businesses.  Your vision and culture
    enable you to lead because your colleagues want to follow.
  • Your only bosses are your customers.  If you serve their current and future
    needs well and don’t stupidly squander your financial resources, good things
    happen and everyone will support you.
  • Don’t assume that smart people, enthusiastic investors, an intellectual
    property portfolio and elegant products will ensure success.  In business, you
    win or lose in the market place.
  • Whenever in doubt, return to fundamentals.
  • There are no time-outs or ends-of-game in business.  You must re-earn your
    success every day, week, month and year.  Keep re-inventing yourself.
Get your attention and stimulate you to think deeply
and to challenge conventional logic and practices.
Suggest clear and straightforward actions with their
underlying logic.  Act faster and analyze real
customer-driven results.
Energize you to get going.  You have plenty of time to
become a skilled, successful entrepreneur, but no time
to waste.
1.  Vision - what you hope to achieve through this venture.
2.  Culture - a set of underlying, shared values.
3.  Innovative Product/Market Strategy - what you sell and how you will sell it.
4.  Sound Business Model - how you will earn a profit.
5.  Passionate Execution
To get and retain your attention, I need to be provocative.  I want you to react to and challenge my
perspectives.  If you cut me some slack and follow my logic, I think you will discover I’m raising valid
issues while, perhaps, over generalizing.  Yes, I may create simplistic symbols to emphasize my

I will pick on big companies.  First, let me be clear, I am incompetent to lead and manage a large
company.  Big companies are not bad they’re simply products of their environment and needs.  Most
big companies are publicly owned and must report sales, profit and other financial information every
quarter.  Big company managements are rewarded for meeting short-term financial goals and
punished for unpredictable results.  This motivates management to protect past successes, try to
minimize risk and uncertainty and seek incremental improvement.  Of course this may actually lead
to even larger risks and more serious consequences – but maybe someone else (the next CEO) will
deal with these in the future.  Many large companies today try to grow and increase earnings
through developing incrementally improved products, acquiring innovative companies with high
growth prospects and buying back stock to improve earnings per share.  Big companies need
entrepreneurs – they can’t internally generate enough innovation nor tolerate the risk of failure.  I
recently attended an investment conference where the CFO of one very successful large company
explained their company-wide business model of a 20% minimum return on invested capital and that
any new initiative had to quickly achieve this threshold.  This doesn’t seem like a fertile environment
for breakthrough innovation requiring extensive market development (Primary Demand).

I’ve also introduced ESSs,
Entrepreneurial Snap Shots, as my technique for describing a few key
lessons from entrepreneurial companies that I’ve been close to.  I’ve included seven ESS highlights
in Appendix A and will refer to them throughout this book.  Even though the ESSs are in the
Appendix, they are important and I recommend you actually read them after
“Are You Ready?”  I
served as CEO of two of these companies, as a co-founder and Chairman of one and as an involved
director of three.  The final ESS is Rico Lingerie.  Rico Lingerie is the story of my father’s business in
the 1920s and 1930s.  In this brief introduction, you will see why this stimulated me to
entrepreneurship and how it inspired me over my career.

Appendix B is an anecdotal narrative covering a few key events during Zymark’s first two years.  My
purpose is to help you feel the urgency and passion required to begin building your new business.

Entrepreneurs, among other characteristics, are not bureaucrats.  Bureaucrats love documentation –
more is better.  Entrepreneurs, however, value their own time and appreciate concise, easy to read
and rich content communication.  I respect your needs, and hope you extract a few valuable ideas
from my thoughts.  Keep this book nearby and consult it when you face challenging issues.  I have
left white space for you to annotate this book as you read through it.  Note your agreement and/or
disagreement for future reference.

The world is changing and success for all businesses is far more demanding than in years past.  Let
me illustrate this with one personal example.  In the 1950s and 1960s my father drove Buicks.  Every
three or four years, he would visit the local Buick dealer and select a new car.  He never considered
another brand or another dealer.  He then looked the salesman in the eye and asked for his “best
price” and then my father would buy the car.  As consumers in those days, we were loyal to and
trusting of big, established corporations.  Since then, we all have transitioned to highly informed and
demanding customers for virtually every purchase – and the Internet is accelerating this process.  No
one today would buy a car by visiting one dealer and considering only one brand.  Informed
customers demand quality and value from their vendors and competitive alternatives keeps raising
the standards.  Many of our old corporate icons have failed and no longer exist.  
Starting a company is easy;
it’s building a successful business that’s hard.

challenged me - forcing me to test my logic and beliefs.  I dedicate this book to these friends, and to
the next generation of entrepreneurs.  You are the enablers of our great economy.  We’re counting on

This book is not based on deep research; it’s simply a collection of insights and beliefs based on 35
years practicing entrepreneurship as a CEO and as an entrepreneurial coach.  My limited time in the
library (web) is to verify facts that I use to support my beliefs.

I don’t expect anyone to agree with all my beliefs.  I urge you, however, to think about them and keep
them in mind as you face new experiences.  Discuss this material with your entrepreneurial colleagues
to stimulate controversy and vigorous debate – only good will come from this.

I believe my advice fits well with emerging businesses from 1 to 1,000 FTEs (Full Time Equivalent
employees).  I would like to think that larger businesses are well advised to form semi-autonomous
business units and apply these ideas to them as well.

My experience is primarily built on a business-to-business perspective commercializing “Primary
Demand” products.  Primary demand products are those creating entirely new markets rather than
simply offering incremental, perhaps large, improvements to existing products.  Generally, primary
demand products are relatively sophisticated products linked with significant service components that
aim to obsolete current practices.  Consumer markets may differ in detail, but the principles should
generally apply.

This guide focuses on the entrepreneurial CEO.  But even if you’re not the CEO it will help you
understand your bosses’ behavior.  And, who knows, you may become a future entrepreneurial CEO.

Entrepreneurship is less science and art and more actual practice.  A Google or similar web search for
“entrepreneurship” will lead you to numerous educational sites.  More than any other field, however,
entrepreneurial success is results based.  It’s not surprising that many of our most respected
entrepreneurs are college dropouts – Bill Gates, Michael Dell and Steve Jobs, for example.  

Forgive me for occasionally using sports analogies, but entrepreneurship and sports share many
attributes; in most cases they are competitive, time constrained, focused on scores and demand team
play.  Entrepreneurship and sports live in the present.  Athletes and entrepreneurs must constantly re-
earn their jobs or be replaced by more effective people.  Bill Belichick, the head coach of the New
England Patriots football team recently commented; “If you live in the past, you die in the present”.  

In this spirit, I’ve organized this guide into three major segments:
Are you Ready?, Get Set and
Go.  Each major segment begins by highlighting its “Guiding Principles”.  The chapter then develops
the underlying logic behind these principles.  I’ll try not to bore you with lots of words, sentences and
paragraphs, and wherever possible, I will use bullets, tables and graphics.

As we progress through these three segm
ents, I’ll organize my points around my entrepreneurial
success framework:
Recently (July 2006) while listening to the “Imus in the Morning” radio program, Don Imus the host
was interviewing Pat Buchanan the conservative political analyst.  During their discussion of illegal
immigration, Buchanan commented that continued virtual open borders will “unglue” our country.  He
vision for patriotism, Buchanan is applying our framework to our national needs.

My goal is to motivate potential entrepreneurs to pursue their dream, but also to discourage those
without real entrepreneurial potential from spending valuable time distracted from a more suitable

Throughout this book, I’ll use the politically incorrect “he” to be race and gender independent.  I’ll also
use the term “product” to include all components of the value package be they physical products,
software or services.

Successful entrepreneurs create market discontinuities – dramatic changes rather than incremental
improvements to current practices.  They may or may not require technological inventions.  Let’s cite
some examples:
Think about it - to a great extent, these innovations came from entrepreneurs with limited resources
rather than large companies’ R&D efforts.

As you read through this book, please:

It is ultimately behavior – beliefs in action.  
If you’re ready, go for it.
I wish you the best.
Do not always take me literally,
but please take me seriously.
Entrepreneurial Success Framework:
China and India educating their people in technology and instilling a strong work ethic – good for
them.  We’re now clearly challenged to create new jobs that need to be performed near our US-
based customers – the largest global market.  In this book, I will try to develop an underlying
principle that the greatest strength of entrepreneurship is intimate relationships and understanding
of unmet customer needs.  If this is true, entrepreneurial companies will need highly capable people
constantly interacting with their customers in order to lead their companies forward.  You cannot do
this by phone, e-mail or videoconference.  We’re actually in sourcing entrepreneurs from around
the world.  This is still the land of opportunity.

If I’ve been successful, as you finish this book, you will observe that Frank only made a few points -
supporting them with simple logic and examples.  If you remember these underlying principles, I’ve
done my job.  Start and end here: