Reading John Osher’s list, I guess success is not only doing the right things but also not doing the wrong things.
- Failing to spend enough time researching the business idea to see if it’s viable.
- Miscalculating market size, timing, ease of entry and potential market share.
- Underestimating financial requirements and timing.
- Overprojectings sales volume and timing.
- Making cost projections that are too low.
- Hiring too many people and spending too much on offices and facilities.
- Lacking a contingency plan for shortfall in expectations.
- Bringing in unnecessary partners.
- Hiring for convenience rather than skill requirements.
- Neglecting to manage the entire company as a whole.
- Accepting that it’s “not possible” too easily rather than finding a way.
- Focusing too much on sales volume and company size rather than profit.
- Seeking confirmations of your actions rather than seeking the truth.
- Lacking simplicity in your vision.
- Lacking clarity of your long-term aim and business purpose.
- Lacking focus and identity.
- Lacking an exit strategy.
It is easy to say “OK, since I have the list I will just go through it everyday and make sure I don’t commit these mistakes.” But it’s only in the future we’ll know if we have committed the mistake or not. Unfortunately, all decisions must be made at the present.
For example, it is logical to research the viability of a business idea. But when do you stop exploring and start doing it? How would you know if you have done enough research? What if data is against your idea but something deep inside tells you otherwise?
How about these guys at Fog Creek who started not with a viable business idea but a desire to create a software company where they would want to work.
I once created a business plan as an intellectual exercise. At first, I was excited because the market is big (at least in the Philippines); that is because I divided the market only into two. Although I’m looking at the smaller one, its size is still big. After several reviews, I realized that I am not being realistic. I further divided my market using locations and perceptions. My market is getting smaller but it is getting clearer the customers I need to target.
In one article (forgot what) the author wrote that market leader owns 90% of the market while no. 2 owns 90% percent of what is left. So I thought 20% is realistic but according to John, “most products sell way less than 1 percent.”
About John Osher:
John Osher graduated from Boston University with a degree in Psychology in 1971 after struggling through seven years of undergraduate work at three different universities. In fact, he never went to class on a sunny day. He has never been hired to work for any company and has never been elected or appointed to any office. He has simply short circuited the system by starting all of his own businesses and appointing himself as President since beginning his first company at the age of five. Now that he is older, he appoints himself Chairman.