Transcript of "The Gut Feel-How intuition leads to success in business"
The Gut Feel:How intuition can lead you to success in business Murray Hunter
Contents:Chapter One: IntroductionChapter Two: Intuition and finding opportunitiesChapter Three: Intuition and the big pictureChapter Four: Intuition and the start upChapter Five: Intuition and MarketingChapter Six: Intuition and SalesChapter Seven: Intuition and GrowthChapter Eight: Intuition and Keeping (or getting) out of troubleChapter Nine: Intuition and Success
Chapter OneThis chapter shows the importance of intuition in our daily life and how it is used to make most of our lifechanging decisions. Various views about what intuition is; are shared with the reader. The myth thatintuition comes from some divine source is debunked. The concept of personal mastery is introducedwhere the right attitude, awareness, and sensitivity is needed to develop unbiased intuition. The chapterthen looks at how businesses and organizations are really run. We see that organisational life is far fromrational, our goals continually change, and decisions are made intuitively.IntroductionOver the last three decades management gurus have been telling us how to be successful inbusiness – have a bias for action, be close to the customer, get productivity through yourpeople, develop a learning community, stick close to the knitting, be hands on, be lean, orbecome a six sigma black belt, etc. We have gone from strategic planning, to people, tostrategy, to quality, to entrepreneurial action, and landed in the blue ocean. The way we thinkis common to all these methods but until recently has received little attention.It was back in the early 1970s that one management scientist Henry Mintzberg questioned theway we believed that managers thought, saying that most decisions made in the workplace areintuitive and based on little deliberation because of time constraints. The reality is that we runour businesses on intuition but ironically little is said about the subject, and there is yet littleassistance or guides to help us sharpen, focus and improve our intuition.Away from the university lecture theatres in a time before it was necessary to have a degree tobe an executive (yes there was such a time), there were many self taught people who learnedthrough experience in what many would call “the school of hard knocks.” People did their jobson intuition. Our rush to higher education tended to influence us to shun the idea of intuition infavour of “analysis” which we learnt, but actually had trouble implementing it at work. We stillrelied on intuition, but wouldn’t really admit it in fear we would realise that a great part of oureducation was irrelevant to the day to day demands of work.I was lucky to work with a man who came up through the “school of hard knocks” and whotaught me how to run a business and undertake marketing on “gut feel.” Years later I was alsomentored by a Chinese scholar of ancient Chinese traditional thinking (yes Sun Tzu) andcouldn’t believe how much common sense it all made. Sun Tzu acted on intuition based upon a
whole lot of mental rules, which we call heuristics, relying on self awareness as his intelligencetool. It was amazing how similar the two schools of thought were in their ways of thinking.So thinking about it, only your gut feel, or your intuition is what makes you decide and move onsomething. We don’t pluck daisies saying “she loves me, she loves me not”, we go by somethingdeep in our stomach (metaphorically of course), that gives us the confidence, the courage, themotivation, and the energy to do it.If you remember the 1967 film The Graduate, Benjamin Braddock (Dustin Hoffman) aftergraduating from college is seduced by an older woman Mrs. Robinson (Anne Bancroft), andthen falls in love with her daughter Elaine (played by Katherine Ross). After Benjamin tellsElaine about the torrid affair with her mother, Elaine runs away to Berkeley, refusing to speakto him. Benjamin decides that he must marry Elaine and follows her to Berkeley. The twoeventually become close again. However Mr. Robinson (Murray Hamilton) arrives at Berkeleyand tells Benjamin if he has anything to do with Elaine he will prosecute him to the full extentof the law. Mr. Robinson takes Elaine away to marry Carl, another student at Berkeley. WhenBenjamin finds out that Elaine is marrying Carl he rushes to the church in Pasadena and arrivesjust after they are married. Thinking he is too late Benjamin bangs on the glass window at theback of the church and shouts “Elaine.” Elaine turns around and sees Benjamin, hesitates for asecond looking at her parents and new husband Carl and then shouts “Ben” and runs towardshim. After a scuffle the pair run down the road and flag down a bus and travel onto their newlife. This is a perfect example of intuition over reason. All important life decisions are madethrough intuition.This book will share with you some of my thoughts on intuition and show you how to harnessintuition through some simple tools so that you can make the right decisions that steer youventure to success.So what is Intuition?First of all what does intuition do? Intuition gives us a gut feeling about something, a quickinsight into issues and problems, an instinctive sense, an inner knowing, a hunch, or wisdomabout something. In psychology, intuition is described as thoughts and feelings that come toour mind without much reflection. Intuition surfaces our beliefs about something which wecannot easily justify through reasoning. Some describe intuition as a function coming from aholistic right side of the brain, although recent research has shown that intuition may be muchmore than that. Jungian psychology aligned intuition as a part of our personality type. TheMyers-Briggs Type Indicator (MBTI) tabulates different personality types where intuitive peopletend to make decisions upon their perceptions. More recently intuition has become an
important aspect of the creativity and innovation movement as a method or ability to solveproblems and make decisions. Cognitively, intuition is based upon little rules of the thumb thatoriginate from our deep beliefs that guide our decision making, called heuristics.The reliability of our intuition depends upon our knowledge stored in our memory andperceptions from the environment. Therefore the wider and deeper our knowledge, given thatthere are no distorting forces present, the better might be our intuition. Those people who useintuition as a means of decision making according to Jung would make good entrepreneurs,where people must make decisions under uncertainty and little fact to reason on. Intuition is ameans of making decisions that can deal with little factual information and analysis.Intuition is a blend of knowledge, some logical fact, some belief, experience, emotion, sub-conscious memory, and stimuli perceived in the environment. Intuition is restrictive to what weare good at and not a general trait. For example a mechanic will be able to very quicklydiagnose what is wrong with a car by just listening to it, where he may not be able to pick upwhy a baby is crying in a daycare centre, which a daycare professional would be able to dointuitively.Is Intuition from any Divine Source?Some authors, speakers, and spiritualists claim that intuition is a divine power withtranscendent qualities that spiritually guide you. Although it can be argued that intuition ishigher order thinking, it is certainly not of any divine origin coming from some spiritual sourceoutside our existing knowledge. To believe that intuition is from some power of a higher orderis very risky as this logic may convince people to follow their intuition when it may actually becoming from a person’s ego, or false intuition. The power of intuition is not divine, but thepower of wisdom that emerges from personal mastery is something that can set people apartfrom others.What is Personal Mastery?Personal mastery is a term the author and management guru Peter Senge borrowed from theBuddhist Dharma meaning that you are practicing the kaizen or continuous improvement ofeverything you do in all areas of your life. Personal mastery is about a journey in life that bringsamong other things personal growth, learning, and wisdom. At this level you are able to seethings for what they are unchecked by your emotional baggage and biases. In such a stateintuition is completely unbiased and trustworthy and can assist you in your journey from your
current reality to your personal visions in life. As such personal mastery also generates theenergy you need to pursue your vision.According to Peter Senge, people with personal mastery have; • A special purpose or calling in life, • Can see their currently reality very clearly, • Can recognize their own biases, • See change as an opportunity, and • Are deeply inquisitive.These qualities show that three elements are important in gaining unbiased intuition, the rightattitude of openness to what might really be, an unbiased awareness, and greater sensitivity.Attitude is very important to learning and our personal growth. This influences how we developour mental models (i.e., built in assumptions about how the world around us works), whichcreates our meaning. This means not taking things for granted and wanting to see things indifferent perspectives, which will be discussed later. Sounds easy, but in reality we are usuallylocked in and become a slave to our attitudes. Think about it, we are naturally creatures ofhabit and like to maintain rigid routines that act as a protective screen against change. Wenaturally resist change as it brings uncertainty and uncertainty brings anxiety, which we try toavoid.Attitude affects our sense of awareness. Some people are orientated towards the future andothers to the past. When we become orientated to the future we can develop apprehensionsand worry about what will happen bringing a sense of anxiety, thus becoming fearful aboutchange. If we dwell on the past we can become remorseful and set in the patterns and ways ofdoing things, thus becoming rigid and fear change (an entrepreneur is someone who embraceschange, orientated in the past will prevent any action orientation of a person). Being orientatedin the future or past makes us rather insensitive to here and now, where we are at present. Thisis not to say that some future orientation is good to have visions about what could be, and atthe same time to have some orientation on the past so we can learn in the present and findopportunities that improve the future.Likewise our awareness is also affected by our locus of control (the belief about how much wehave control over events around us). If we believe that we have no control over events going onaround us, we won’t care and we will be oblivious to opportunities around us. If we believe thatwe can control everything, then we may become delusional about what we can achieve anddevelop an extreme sense of over confidence.
This quad-directional frame is surrounded by our emotions which can distort our awareness.Emotions such as envy, greed, lust, anger, depression, and persecution distract us from seeingthe environment clearly and affect our interpretation of what exists. In mild forms a little bit ofruthlessness might be necessary to survive out there in the world, but too much greed forexample may influence a person to undertake strategies that are too ambitious, and put acompany into cash-flow problems.Being balanced within the awareness plain is very important to having an unbiased intuition(shown in figure 1.1.). Future Orientation Emotional Disturbances Strong Locus of Control Weak Locus of Control Optimum Region of Awareness Past OrientationFigure 1.1. The Awareness Plain.We also need to have emotional sensitivity so we can pick up what is happening around us.Emotional sensitivity runs across a continuum from mindlessness to mindfulness.Mindlessness numbs individuals’ senses to the outside environment and patterns them intoseeing situations as absolutes. Whereas mindfulness is a state of psychological freedom withoutany attachment to any point of view and being attentive to what is occurring at present. Manypeoples’ emotional sensitivity is inhibited by their past categorizations, rules and routines that
cloud the ability to view any current situation with novel distinction. Therefore the moremindful a person is, the more open to the environment they will be. Ability to see the environment in different ways No Sensitivity High SensitivityFigure 1.2. Our emotional sensitivity.How Business is Really RunOne of the great myths of the 20th Century was that firms and organizations were run rationally.Anybody who has seen some of the British “Carry on” series, “Monty Python”, or “Yes Minister”and worked in any large organization will laugh at the idea that organizations are anythingresembling rational. Organizational life is probably something more akin to the episodes of“Absolutely Fabulous.” Although we believe we are rational beings, we actually go about thingsin the most inconsistent ways. We probably still have a lot to learn from the ant species that weshare the Earth with.This is especially the case in entrepreneurs and new venture formation (or new marriages forthat matter). We try things in an exploratory way to see how they work. If they work, we keepdoing it, and that becomes our behavior. Those parents reading will know that this is howchildren learn. So the journey of business and life is more akin to sailing a yacht along a bayagainst the wind tacking every few hundred metres to reach some upwind point, at someoptimum angle against the wind. Although we may set certain goals at the beginning of thejourney, most probably during that journey we modify them and end up at a new destination aswell. Firm rules don’t work, it’s more about seeing and feeling what happens and makingdecisions accordingly. The journey of life is therefore guided by intuition, and the better weunderstand it, the better it can work for us.
Wind in the case of a yacht or environmental turbulence in the Vision & case of a firm. Goals Actual Path & Performance Modified Vision & GoalsFigure 1.3. The journey of life is like sailing a yacht upwind.The rest of this book will show you how to use intuition when all the facts are not available tofind opportunities, start-up and grow a business.The next chapter will look at how intuition helps us find opportunities. You will see how not toomany people look into the future and outside their own set geographical areas. Most peoplesee opportunity through their own aspirations and often mistake their personal interests foropportunity. Different types of opportunities have different types of characteristics andintuition helps us to construct them into new business models. Finally we will see that curiosityand interest are two very important ingredients in the ability to see opportunities.Chapter three is about seeing the big picture of opportunities which can be intuitively testedthrough checklists which help us to examine each element of the selected opportunity. As youwill see most entrepreneurs never start with any formal business plan, and even if they did,they would undertake this intuitive due diligence.Chapter four is about intuition and the start-up phase of a venture. Entrepreneurs are usuallystrapped for resources and only have time to do what is immediately important to get the start-up going. They have little information to go on, so they must use intuition to make thenecessary and important decisions. You will also see in this chapter that one must be verycareful not to mistake ego for their intuition which is a deadly trap for young players.Chapter five concerns intuition and marketing. Entrepreneurial marketing is very different fromconventional marketing practices due to the lean resources an entrepreneur has. Start-upventures usually lack market information and must therefore rely on intuition to make
decisions. We will also see that what entrepreneurs envision for the market and whatconsumers will accept may be very different and entrepreneurs must reconcile thesedifferences. Intuition on the run in the marketplace helps to reconcile entrepreneurial visionswith consumer realities. The chapter concludes with an outline of how a new firm can find itsplace in the market by either attracting consumers away from existing products or creating newvalue to consumers.Chapter six is about intuition and the sales process. Sales are vital in the start-up phase of anenterprise and most of the entrepreneur’s time will be concerned with this issue. The chapteroutlines the basic principles of sales, how to build up sales skills, and how to put up your case tothe potential customer. Empathy, a form of intuition is very important in the initial salesprocess and for meeting later objections that potential customers may raise.Chapter seven concerns intuition and growth. During the life of a firm there will be times whenbig decisions may have to be made that alter the destiny of the enterprise. These potentialpaths can be looked upon as potential moves that can be made in the game of chess, where anymove will have specific consequences.Chapter eight is concerned with intuition and keeping (or getting) out of trouble. There areusually a number of crises during the life of a firm where getting out of trouble is aboutintuition as much it is about following management philosophy. There are multiple perspectivesabout any situation that need to be appreciated before decisions should be made. Differentperspectives can be discovered and appreciated by the use of lists. This helps to supportintuition. Another problem with any crisis is the stress it brings the entrepreneur, whichpotentially blocks unbiased intuition.Finally, chapter nine summarizes the issues involved with intuition and business. The blocks toand distortion of intuition are revisited as well as the relationship between intuition, creativity,and action.Summary • In reality business decision making is done intuitively. • Our life changing decisions are also made intuitively. • Intuition can be defined as thoughts and feelings that come to our mind without any reflection. • Intuition is an important part of creativity. • Intuition is the only way to make decisions where factual information doesn’t exist.
• Intuition is based upon our current knowledge, experience, beliefs, and from what we see in the environment and has no divine sources. • Personal mastery is a continual journey to self improvement, through learning, personal growth, and the source of our wisdom. • Attitude, awareness, and sensitivity are very important to get insightful and unbiased intuition. • It is important that we live in the present and not the past or the future. • We must be realistic about our sense of control over events within the environment. • We must be aware of emotions that can burden us with bias. • Business and organizations are far from rational entities. • Organizations rarely pursue their goals directly, as strategy and action is more about trial and error, and the resulting learning.Some More Introductory Tips: • Thought Audit: Most people are not aware of what is contained within their thoughts and what emotions influence them. We can discover the influences on our thoughts by recording them down in a dairy. For example you have a thought about “being the person to kick the winning goal in Saturday’s football match,” After your write down the thought try and think what emotion and motivation is behind it. Back in this example the thought of kicking the winning goal might be associated with “the need to achieve” or “the need to seek attention and be noticed” – this could come from feeling inferior to others, or just a need to be competitive. After a day or so of recording down your thoughts and emotions, one may begin to see consistent patterns about the types of emotions you feel and if any particular set of emotions dominate your thinking. You may find that your emotions have multiple motivations. In the above example your thoughts may show you that there is both a need to achieve and a need to be competitive. There may even be some feeling of a need to make a difference. On the contrary, your thoughts may show that you have a strong desire to be noticed. Being forced to think about the types of emotions you feel may give you some insights into yourself that surprise you and help you to build up unbiased intuition.
Chapter TwoThis chapter looks at the characteristics of opportunity and the role intuition plays in finding anddeveloping them. Our personal aspirations influence the types of opportunities we see. Thereare basically four types of opportunities; those that are imitative of other businesses, those thatrely on consumer markets and established supply chains, those that are entrepreneurially novel,and those that come from some form of breakthrough technology. The concept of mindfulness isintroduced which helps us see opportunities at various depths or levels. Finally the chaptershows how to construct an opportunity using the method called concept extraction.Intuition and Finding OpportunitiesThe central aspect of opportunity is being able to see it in the first place and act upon it beforeothers. This relies upon how we see the world and process information. The resulting vision,insight, discovery, or creation is an idea that upon evaluation may become an opportunity. Thisability is not evenly distributed among people as people have different orientations towards theworld around us, as figure 2.1. shows. Space Global National City Neighbourhood Sectional Interest Today Next Next Next Life Children’s Time W Week Year Few Years Time LifetimeFigure 2.1. Peoples’ different orientations towards the world.Most ideas have their basis in some old idea, something seen or experienced within the past, sofrom this point of view most opportunities are not truly novel. For example, an old type of
business can be given a new business model and professionalism like McDonalds did forburgers and Holiday Inn did for motels. New technologies can be applied to old products andprocesses like desktop publishing and email and domestic business models can be expandedinternationally like Coca Cola and Pizza Hut.Many people mistake their personal aspirations for opportunity. For example people put theirmoney and efforts into a boutique, restaurant or spa for the wrong reasons because they likefashion and shopping, food and cooking, or aromatherapy and massage, only to close down afew months later because there was no real opportunity. In SME’s the values of the founderand the firm are the same in many cases. The way we look for business opportunity is to a greatdegree influenced by a hierarchy of personal and family aspirations and concerns that cannoteasily be separated from business goals. This can be dangerous if one is unaware of theirinfluence upon thinking. This hierarchy of personal, family, and business aspirations aredepicted in figure 2.2.
The Individual & Family Family history, Current family livelihood, Current Family Status. Family Values Self Assessment Strategic Business (Self-efficacy) Analysis Resources, networks, Decision Making Skills capabilities, competitive The Vision Aspiration Knowledge environment, etc. Personal Goals Family Goals Business Goals Business Aspirations Family Asset Future Competencies Considerations Fulfillment (Retirement) Self view Knowledge Generational Value Time horizon Income needs evolution Production & Type Investment Operations Time Horizon Grooming options successors Needs Marketing View of Risk retirement Family aspirations Wants management Personnel Opportunity Lifestyle Liquidity needs Tax planning Financial cost of doing other activities Attachment Alternatives Opportunity Risk Management cost of doing Passion other activities Horizontal and vertical expansion Exit barriers Motivational OriginsFigure 2.2. This hierarchy of personal, family, and business aspirationsDifferent types of opportunities in various market environments display different types ofcharacteristics. Imitative businesses like milk bars, flower shops, newsagents, and automobilemechanics require a very low level of analysis and intuition to see these opportunities. Formalstrategy and tactical moves are also much less important for these types of businesses becausethey tend to rely on passing trade and offer similar products to their competitors. The onlyquestion requiring an intuitive answer that an entrepreneur will ask here is; if he or she opens abusiness in a particular location, will there be enough business coming in to make it viable?
Opportunities in established markets served by medium to large companies like in the groceryor hardware trade may require more analysis to identify opportunities with little use ofintuition. For example, one will analyse the market for unfulfilled gaps and seek to fill themwith new products, or move to new markets with existing products. Formal strategy plays amuch more important role in this arena, although tactical moves tend to be low. The importantintuitive question here is; whether there is enough demand for the new product?Opportunities that are based on the discovery of new markets due to changing industrystructures or demographics for example, require high intuition to find them, using a low level ofanalysis. For example although a growing aged population can be observed very easy, newopportunities will tend to be intuitive rather than analytically based, i.e., this segment likes 50sclassic music, so will new businesses based on this idea be successful? The answers can only befound out through trial and error. Entrepreneurs tend to carve out their product and marketniches using tactical moves rather than utilizing formal strategy.Finally in markets where real technology breakthroughs occur, require high analysis and alsohigh levels of intuition are to identify opportunities. New products come from intuitive ideasfrom what the technology can do. For example when Texas Instruments developed LED, theresearchers developed as many products they could that could utilize the technology likecalculators and watches, etc. New products come as ideas rather than from any marketanalysis. Formal strategy is very important but a fair degree of trial and error is also required.You saw that how tactical moves were important when plasma TVs and 3G mobile phones werelaunched, and we are also seeing this with the advent of iPads and internet TV.
Low Intuitive High High Large Companies & Breakthrough Consumer Type Technology Markets High analytical and high High analytical & Low intuitive opportunities, high intuitive opportunities, strategy & high tactical Analytical high strategy & low tactical exploitation Growing exploitation importance Imitative Business Entrepreneurial of formal Low analytical & low intuitive Low analytical & high intuitive, strategy opportunities, low strategy & low strategy & high tactical low tactical exploitation exploitation Low Growing importance of tactical movesFigure 2.3. The various characteristics of different types of opportunities.Opportunity construction primarily relies on a person’s intuitive thinking to tap into a person’screativity and imagination. How any idea will be developed will depend upon what informationa person knows, their life experiences, and how they connect all the pieces of informationtogether.Curiosity and interest are two very important ingredients that help drive a person’s opportunityawareness. Without these two ingredients important bits of information from the environmentmay be missed or glossed over. Usually specific opportunities are spotted by people who workwithin a particular industry or have related hobbies or interests. For example, Nike was formedby track coach Bill Bowerman and middle distance runner Phil Knight who both had a passionfor their sport. They were able to see opportunities that others outside the running fraternitymay have not been able to see.However occasionally people within an industry may become complacent and so accustomed tothe ways things are done that it becomes difficult for them to see any other ways of doing
things. Time and time again industry outsiders are able to spot these points of complacency andbecome industry leaders within a very short time. The most famous story of recent times arethe young upstarts Steve Jobs and Steve Wozniak who started Apple Computer and changedthe whole structure of the computer industry under IBM’s nose, which was focused on thelarge commercial users. Likewise Kemmons Wilson saw that motels in America lacked qualityand consistency and formed Holiday Inn to provide the quality and consistency he felt theywanted.Many successful ideas are based on intuition and end up changing the way industries operate.Microsoft, Dell, Disneyland, and Jims Mowing here in Australia are all good examples of that.Mindfulness allows a person see the environment more clearly and become more sensitive aswe develop our personal mastery. Recent New York University research has shown that whenour mind relaxes part of our brain called the default neural network activates and processes ourthoughts unburdened and unencumbered by emotions and other cognitive biases. The closestthing to explaining how this works is when we daydream, or when we are relaxing over dinneror having a shower and suddenly get that ‘aha” thought that solves a problem that we haven’tbeen able to fix all day. The more mindfulness, the better the perception of opportunities,however other facets such as our experience are still vitally important, which without anyindividual will not be able to perceive opportunity for new ventures, products, and services.Mindfulness may enhance the ability to perceive and shape new opportunities through fivecomponents that have been empirically tested by cognitive scientists; • Openness to novelty – the ability to reason with relatively novel forms of stimuli, • Alertness to distinction – the ability to distinguish minute differences in the details of an object, action, or environment, • Sensitivity to different contexts- tasks and abilities will differ according to the situational context, • Awareness of multiple perspectives – the ability to think dialectically – see different perspectives of the same thing (we will discuss later), and • Orientation in the present- paying attention to here and now.One would assume that the degree of mindfulness an individual possesses will also influencethe depth of opportunity that can be observed within the environment. The table below showsthe different depth of ideas that can be observed and associated forms of thinking involved inseeing and creating them.Table 2.1. The different depth of Ideas First Level Imitation See and belief, little intuitive thought
except for viability- logical thinking Second Level Creative Imitation See and enhance, maybe with some connection, logic, intuition and holistic creativity Third Level Creating a new Connectivity of different pieces of business Model information, intuition, some imaginatively, or through creation. Fourth Level Creating something Complete holistic, intuition, imaginative new to the world construction, building from deep and sparse pieces of experience.Concepts can be extracted and synergized from unrelated locations, objects and other businessmodels. For example, a person may secure a particular rental location and wish to create someform of business model that would serve potential customers within that location. Potentialyoung customers around the precinct of a university like to gather at near campus restaurantsor coffee lounges for snacks and social gatherings. The general characteristics of a generic fast-food business is that it is cheap, has a good standard of hygiene, good service, fast and efficient,specializing in a particular food, people know what to expect and a meeting place for people.After study of the situation some of the characteristics of a generic fast-food business can beextracted according to what the potential entrepreneur feels are most important to thepotential clientele of the potential location and a new concept constructed. A hypotheticalresult might be a charcoal BBQ Burger Grill which is conveniently located, cheap andaffordable, has good service, a unique and tasty charcoal grill, and is a convenient meetingplace with Wi-Fi, etc. This is called concept extraction where the potentially successful elementsof a concept are synergized together to create a new idea. This is shown pictorially in Figure2.4.
C Constructed Concept Concept Extraction Charcoal Burger Grill A (location) + B (characteristics) 1. Location near young people = C (constructed Concept) (university): convenient 2. Cheap and affordable University 3. Good service 4. Authentic charcoal BBQ burger grill (western style) 5. Convenient meeting place A with WiFi etc. Location Fastfood B Concept Extraction (General Characteristics) 1. Cheap 2. Good standard of hygiene 3. Good service 4. Fast and efficient 5. Specialize in a particular food 6. Know what to expect 7. A meeting place for people Potential success parametersFigure 2.4. A constructed concept of a charcoal BBQ Burger Grill.Remember opportunities aren’t static and continually move. This is a major reason whycompanies like Blockbuster Video faced financial problems in the US with the move to newmultimedia formats, Angus & Robertson faced financial problems here in Australia with theincrease of purchases of e-books and through websites like Amazon, and photo kiosks aredesperately trying to survive with the digital camera revolution.Summary • Finding opportunities is about being able to see them. • The ability to see opportunity is not evenly distributed through the community because people have different time and space orientations. • Most new ideas have basis in old ideas. • Many people mistake their own aspirations for opportunities. • The way we see opportunities is strongly influenced by our personal and family aspirations. • Different types of opportunity have different types of characteristics.
• Constructing new opportunities requires creativity and imagination. • Curiosity and interest are important in developing our opportunity awareness. • Opportunities are usually spotted by people within that industry. • Sometimes people from outside an industry see an opportunity that changes the way things are done in an existing industry. • Mindfulness allows you to see the environment more clearly and the more sensitive we are, the deeper the type of opportunity we will see. • New opportunities can be created through selecting and synergizing different attributes of other ideas through the method we call concept extraction. • Opportunities are always evolving and changing and we must align ourselves with this evolution to survive.Some More Intuition and Opportunity Tips: • Attribution Scanning: Sometimes intuition has to be developed or triggered by what we call attribution scanning. Attribution scanning involves looking at one small area of a market; say a product segment of interest. Select a product, e.g. laundry detergent, and start looking at all the different variations that can be made, i.e., form - liquid, solid, gas (aerosol), variations – odour, formulation type, etc, attribute incorporation – with fabric softener, with stain remover, with bleach, organic, etc., size, channel of distribution, use of products, etc, etc, etc. Some ideas may be discounted because they are just plain silly, while others may have already been taken up by other competitors, but eventually you may find some combination that may look interesting as an opportunity. By focusing during the day on something intensively, when you relax at night further ideas may come to you without conscious thinking. Who knows, one of these thoughts may be an insight that brings you success to the market.
Chapter ThreeAlthough the business plan is a major part of business and entrepreneurial education, very fewventures actually start with formal business plans. This chapter looks at how important it is tohave a big picture of what you want to do. Any big picture that has been elaborated upon canbe checked for its viability by going through mental checklists. The chapter breaks downopportunity into its individual elements which can separately be validated through thesechecklists. Checklists will also highlight to an entrepreneur how well prepared they are to exploitany said opportunity.Intuition and the Big PicturePicture Robert de Castella winning the Commonwealth games 1982 marathon in Brisbane, andagain four years later in Edinburgh, Cathy Freeman winning gold in the Sydney 2000 OlympicGames 400 metres, and Ian Thorpe winning the gold medal in the 400 metres freestyle in thepool at the same Olympics, and again in Athens in 2004, all proud moments for them, andproud moments for us as Australians. Each of them before stepping out onto the road, track, orinto the pool had a big picture in their mind about what they were going to do.The visualization of your future business as a big picture in your mind is no different. It’s like anartist painting a masterpiece on a sheet of canvass, which in your case is your mind. A sketchvisualization may occur very quickly like some form of great insight into something, but thedetails may take some time to slowly build up until you have a full mental business model inyour head. This imagery, mental picture, imagined model, represents a desired future that wewould like to see. We in fact see ourselves inside of this model as its founder, creator,entrepreneur, and steward. This model is built out of pure imagination, based on our intuitivesense of the world around us. A picture of how we can convert the world we live in to a muchmore desirable one (see Figure 3.1.).
Young & invigorating image Internet Bookings An exciting low Young good looking cost airline to fly air & ground crews Modern and trendy on aircraft interiors Advertising image Limited use of Baggage travel agents Standardized aircraft to No baggage transfers cut down on No connection with maintenance costs other airline baggage Fast Aircraft services turn-around times Baggage surcharge General savings on overheads Extra means of Auto-check with no revenue baggage Not burdened by Paid snacks & meals Seating traditional air and ground Low landing charges Blankets crew procedures and terminal fees Computerized ticketing No connection with other Headquarters located methods airlines at airport terminal Related businesses - hotelsFigure 3.1. The big picture of Air Asia.Starting any venture or enterprise without a mental picture is just as dangerous as a pilot flyingacross the Simpson Desert in a small plane without a map or any navigation instruments. Thepilot will get lost in the Simpson Desert and the entrepreneur will get lost in his or herenterprise.After an opportunity has been found, it must be evaluated to determine whether it is viable asa venture and worth putting in your time and resources. Viability is relative to the resources,skills, and networks you possess, so what may be viable to you may not necessarily be viable tosomeone else.The Business Plan you have when you don’t have a Business Plan.The author’s own research has shown that most entrepreneurs don’t actually develop anyformal written business plan before starting out on a new business, but instead rely on a wellthought out mental model of the enterprise they want to develop, the products they want tomake, the potential customers they want to service, in a manner consistent with the resourcesthey either have or can acquire from somewhere. It’s all in the big picture.
The big picture resembles a business model, laying down the strengths and taking account ofthe weaknesses that the entrepreneur must compensate for, highlighting what already existsand what needs to be procured to make the opportunity something of a success.When a person is not affected by overconfidence and can look at a situation clearly, theentrepreneur will have mental checklists of questions underlying the big picture that requireintuitive answers. It is the sum of these answers, that enables the entrepreneur to make a “go”or “no go” decision about the venture. These decisions can only be made intuitively as nomeans of analysis will assist in arriving at this “go” decision, as there are too many factorswhich cannot be analysed rationally involved. This is the time when entrepreneurs must trusttheir intuition.Underlying any opportunity is a structure which can be examined through a checklist ofquestions. These checklists of questions are basically the same for a delicatessen, a burgerrestaurant, a boutique, a cosmetic manufacturing enterprise, toy distributor, or produceimporter. Positive answers to the checklists enable an entrepreneur to exploit it with someconfidence. Negative answers show where weaknesses lie. Again, it is not necessary to write allthis down as for many people these are mental processes, but sitting down and going throughall these questions makes a lot of sense before one makes a final decision. Networks Competitive Skills, Field Capabilities Strategy Resources Time & Making Space Connection Vision PlatformFigure 3.2. The elements of opportunity that must be examined.The questions that can confirm the big picture is viable would include;
Time & Space:Is this the right time to be launching a product or engaging in this type of business?Are people ready for this?Is this the right location for the business?Do people in the location I am thinking of use this type of product, service, or event?Vision Platform:Are there any issues that are clouding my thinking?Am I seeing this opportunity because I want to see it?Where am I biased here?What do my emotions tell me?What is my ego telling me?What does my reasoning tell me?Making Connections:Is what I am seeing truly viable?Do the idea connect in a way that other people will see the value and become enthusiasticabout? i.e., a product idea.Does this new way of doing things (new business model), or new product, service, or eventprovide new value to customers?When I work back from my intuition, does the reason support the intuition? Why? Why not?Resources:Do I have the resources to pull this venture off?If not, do I have access to resources that will enable me to pull off this venture?Are the resources I need generally available?Do I have, understand, or can acquire any forms of technology required to exploit theopportunity?Will I be able to get resources I might need in the future?Are there any resources I need that are scarce?Are there any particular resources I can use that give me some form of advantage over otherfirms?Skills & Capabilities:Do I have the skills and capabilities necessary to undertake this venture?Can I learn the required skills and develop the required capabilities during the early stages ofthe venture?
Are there any skills or competencies I don’t have?Is there a difficult learning curve for me to master these skills and competencies?Are there any particular skills or competencies that may create a barrier to entry to thebusiness in mind?Can I acquire the necessary skills and capabilities needed for the venture?Will I be able to manage the venture?Networks:Who are the key stakeholders?What are my relationships to them?Do I have the necessary networks of friends and associates to enable me to run this venture?i.e., in securing goods, materials, services necessary to exploit the opportunity, in themarketplace, in the financial markets.Can I acquire the necessary network to enable me to run this venture?Competitive Field:Are their customers for my product, service, or event?Who are my competitors?How do they operate?What are their strengths and weaknesses?Can I match or better them?What do I have that they don’t have that would make a difference in the market?Is there room for another competitor in the market?Or do I have no competition? Why?What are the existing competitors in the market do when I enter the market?Can I handle this?What are the barriers to entering the market? Can I overcome them?Can I create barriers for others following me?Is the market large enough to sustain my business?Strategy:What strategy is needed to succeed?Do I have the resources, skills, capabilities, and networks to pursue this strategy?Will I emulate others, or will others be able to emulate me very easily?Are there alternative strategies that I can switch to if the initial one fails?Checklists are nothing new. An airline pilot flies a passenger airliner from Melbourne toBrisbane on checklists, just as the crew of the lunar module of Apollo 11 did in July 1969, when
humankind made the first landing on another celestial body other than our own, the Moon.New Coles and Woolworths stores are developed and opened using checklists, just like theMcDonalds store in your neighbourhood is operated through procedural checklists.What hasn’t been said much before is that making the decision to “go” with a start-up isusually an intuitive decision making process, where the entrepreneur should touch base withthe types of questions listed above. Nobody is less astute or less of an entrepreneur for doingso; in fact this is how good decisions are made. The former Harvard University (Now TuftsUniversity) Professor Amar Bhide said that entrepreneurs who make quick intuitive decisionsare usually more successful than entrepreneurs who take time to analyze the issues involvedbefore making their decision. Surprised, just ask any Ford executive involved in the launch ofthe Edsel. By the time they had made a thorough analysis of the market, the market changedand the Edsel was launched into a completely different market situation than the one that wasanalysed at the time.Everybody Does itIt isn’t necessary to formally write down all the information and create a beautiful business plan(unless you need it for other purposes like raising equity finance). What is important is that aperson considers all the issues honestly to themselves. If writing it down on paper helps toorganize your thoughts then by all means, write things down to organize your thoughts.Your checklists link the opportunity to action. After going through the checklists, you knowwhat you need and what to do. You now have enough knowledge to guide you through thestart-up and initial strategy direction you will take the new firm. Mental checklists enable aperson to make a number of decisions based on subjective information very quickly. This iswhat an entrepreneur would call decision making on the run, and the strategy gurus callflexibility and agility. Analysing mentally issues through checklists is part of developingentrepreneurial competency and personal mastery, depending upon what you want to call it. Icall this guided intuition.Using mental models of the big picture and breaking them down into the critical elements is anexercise in intuition that can enhance your chances of success. Through the big picture model,resources, timing, place, skills, the adequacy of networks, the competitive field, and strategycan be examined more closely to determine whether the entrepreneur is ready to take on theopportunity in question. Failure to develop a big picture of a proposed venture with the variousmental checklists involved will usually lead to shocks and surprises that may jeopardize ventureviability and even lead to venture failure. It never ceases to amaze the author of how manypeople are willing to spend their savings on leasing expensive premises and equipping it to
produce food, cosmetics, or plant fertilizers, etc., only to believe that customers will appear outof nowhere to buy their products.A big picture model will alert entrepreneurs to potential problems. Solving these problemsbefore they happen will save a lot of money and heartache needed to get out of an expensivelease if the venture fails due to problems that could have been easily foreseen. On the contrary,those who have visualized the big picture and intuitively gone through all the issues, asking theright questions have a much greater chance of success. The thought of being successful is halfthe journey.Summary • Successful people need to see the big picture of what they want to do. Ventures are no different. • The big picture is used more by entrepreneurs than business plans. • The big picture is a way of responding to an opportunity. The opportunity can be broken down into specific elements. Through examining each element through a checklist and questions, an entrepreneur can determine both the viability of the opportunity and their preparedness to exploit it.Some More Intuition and the Big Picture Tips: • Evaluating your competitors: Using the big picture diagram (figure 3.1.) you can evaluate your competitors’ products and services attributes, benefits to consumers, strategies, strengths and weaknesses, and capabilities, but constructing their business models.
Chapter FourThis chapter examines the chaos of start-ups and the importance of intuition in helping to setpriorities. Reasoning is sometimes too logical for start-ups and intuition is better. The concept offalse intuition where your ego gangs up with your reasoning is discussed, where rising abovethis trap by using your interpretation of the big picture is a sign of personal mastery.Intuition and the Start-upIf any of you have been involved in a start-up you will know how chaotic and stressful it can be.There are so many important things to do, so many issues to attend to, along with the need toabsorb all things going on around you, and come up with the priorities of things to do. Whatmakes it even more difficult is that you are learning as you go along about what is importantand what is not so important. Money is going out, with none coming in and the clock is ticking.And in most cases this must be done “on the run” without time for planning.Successful start-ups require you to find the path that is most important, most effective, andmost efficient in influencing the outcome of what you want, called the “critical path” in projectmanagement. This must be done with minimal use of resources so they are conserved and canbe utilized across the board for all things necessary during the start-up phase. The start-upperiod is difficult to plan because there are so many unknown issues and surprises ahead, thatcan’t adequately be planned for in advance. As the saying goes “you must fly by the seat ofyour pants” intuitively, feeling your way and hopefully moving ahead in a manner that allowsyour start-up to be successful.In a start-up situation there is a “critical thread of activities” that will position you where youwant to be in relation to the big picture you envisage. There are many matters that require yourattention, including matters like designing your business cards, picking the colour of your chair(if you buy them), to much more important matters like who will be your customers, Whatequipment will you require in the warehouse, what materials should be used in productpackaging, or how should your services be divided up and charged to the customer. This allrequires serious time and resources management. You don’t want to wear your resources downtoo thinly by applying them to the wrong things. No point having flashy business cards andbeautiful office chairs if you don’t have packaging for your product and customers don’t cometo your office. It’s a matter of priorities. Don’t laugh, in a situation of the chaos of a start-up it’sso easy to spend in the wrong areas, leaving you short later for the things you really need. It’s areally common story.
This is where intuition becomes so important in what you do, as we all know it’s better to havea tight gut, rather than a loose gut, for health reasons, if not anything else. In this case it’sabout the health of your start-up enterprise. One has to know what resources to acquire, i.e.,should I spend the whole day travelling across town to pick up some unwanted office furnitureor warehouse racking and organize transport back to my new premises, or not? Where financecan be obtained (if necessary); and yes you may have to use the credit card and pay the extrainterest to make ends meet. Good intuition helps you prioritise all these things, whichminimizes your outlays. Intuition, don’t leave home without it. You need it to maintain selfbuoyancy throughout the chaotic start-up phase.In a start-up you have to allocate the time between setting up your administration, productdesign and development, production, marketing, and sales. There is no correct formula abouthow to allocate this time, however the author has always found that about 60% of the time wasspent in initial sales, 30% in product development, and the remainder in setting upadministration. However where the product and production processes are more complex andproducts might be made for order, the majority of focus and time may be put into thedevelopment of production facilities, maybe even 80-90%. Every business will have its ownspecific optimum time allocation.What compounds problems in a start-up situation is that there is no historical budgeting to fallback on, so start-up budgets are really about your gut feelings on the matter. No doubt, this willchange regularly. I have never met an entrepreneur that has been able to keep their start-upcosts according to the laid down budget set before the start-up. Matters requiring spending areoften missed, unaccounted for, under-estimated, or the implications misunderstood. This iswhere the sense of intuition is so important to help prioritise where the time and money shouldgo.The author has found that during the chaos of start-ups, there are three distinct influencesupon what we do. The first is our reasoning, where for example we can reason logically “thatwe need business cards because our customers expect them and we must show our corporateimage.” Another example may be that “we should buy the office furniture we need to becomfortable because we spend between one-third and one-half of our life at work.” Reasoning isgood, but reasoning alone can make us broke, because it’s all too logical.This is where intuition comes in. Intuition is not logical and takes a wider perspective thanreasoning. Intuition decides a sense of importance and priority against all the other outstandingissues. However don’t mistake your ego for intuition. You may want to have a beautifulbusiness card because it makes you feel good. You may want that executive chair because itmakes you feel in control. But this is not intuition.
Intuition as we have seen is related to the big picture and is more concerned about your needs,rather than your wants. In a start-up situation you buy what you need, not what you want. Yourego will support your reasoning and disguise itself as your intuition – your false intuition. Itworks very hard to convince you, sometimes burying your intuition into the background. Beaware that it is your intuition working for you and not your ego.Rising above your reasoning/ego combination with your big picture based intuition is a sign ofpersonal mastery, promoting the wise old steward within you. Don’t have it any other way, gofor the old wise steward over a rampant ego advising you any day. Be alert to the signs of falseintuition. False intuition excites you and placates your wants. Your true intuition is concernedabout your needs.Intuition helps you determine which advice is in your best interests. That’s why it’s important tostep back in pressured situations and identify who inside you is really talking. Is it your trueintuition or is it your reasoning and ego ganging up on you?Finally, intuition is a way of organizing your knowledge and applying it to situation to situation.Without intuition your knowledge carries little weight in decision making until your intuitiontells you which knowledge is best to use. Sound intuition is wisdom, which is what you need inthe start-up phase of your enterprise.Summary • Starting a new venture is a chaotic time where it is very difficult to prioritise what needs to be done. • During the start-up phase intuition provides you with “personal buoyancy” which helps to see order in the chaos and do things according to priority. • Reasoning is sometimes too logical for start-ups. • There is no set formula about how to allocate your time and resources in a start-up. • It is very easy to mistake our ego for our intuition. • In start-ups reasoning may not necessarily be the best way to make decisions. • Rising above your reasoning/ego combination and following your big picture is a sign of personal mastery. • Intuition is a means of applying knowledge from situation to situation. Intuition gives weight to knowledge. Sound intuition is wisdom.Some More Intuition and the Start-up Tips:
• Learning to trust your intuition: Try and find situations in your life where it has been better to follow intuition rather than your reasoning. For example, you don’t do the washing or mow the lawn today because it “feels” like it is going to rain. Was your intuition sound in the cases you found?
Chapter FiveEntrepreneurial marketing is very different from conventional marketing in that resources andinformation are lacking to make informed decisions. Intuition is thus very important, wheremost breakthrough ideas are the result of intuition rather than market research. The key toentrepreneurial marketing is flexibility and experimentation until one has found the bestcombination of the best products, services, events, and strategies. To achieve this flexibilitystubbornness and ego must be transcended with intuition. Finally to develop one’s place in themarket, an entrepreneur must examine the opportunity they have seen carefully, and configuretheir strategies with relevant resources to support it.Intuition and MarketingMarketing for an established firm and an entrepreneurial start-up is as different as chalk andcheese. Established firms usually have recognised brands, stable channels of distribution,dedicated marketing personnel, and fixed budgets to carry out their activities, whileentrepreneurial start-ups usually have none of these at their disposal and are starting fromscratch. An entrepreneurial start-up venture with very limited resources must create whatestablished companies already have under very vulnerable conditions. If your competitorsnotice that you exist and you look like being a potential threat, they are likely to come down onyou like a ‘ton of bricks’.Entrepreneurial marketing has become the flavor of the month where the general message isthat ‘you have to get more with less’. Most of you would have heard of terms like viraladvertising, viral marketing, and guerilla marketing. All these methods are aimed at gettingpublicity and into the market in ways that require small amounts of resources. You have to goback to the basics of doing your own brochures and distributing, giving out samples wherecustomers are, using social and other free forms of media, getting publicity in some way oranother, generally undertaking activities that require time as the major resource. These arevery effective where your market is localized or specifically segmented and less effective as themarket spreads out to the general community.An effective entrepreneur marketer is someone who thinks in creative ways about how tomaximize publicity and get promotional mileage for the new venture’s products with verylimited resources. Again this requires imagination, and intuitive innovative approaches tomarketing and promotion.
As we saw in the introduction of the book, one has to really understand the market, products,customers, competitors, the supply chain, methods of promotion, etc., to really develop anyreliable intuition. This means rolling up your sleeves and getting down to the market until itmetaphorically ‘runs in your blood’. Then you begin to develop the wisdom about the marketthat will give you advantage over those snotty nosed MBA types employed by the largecompanies who are more interested in the next rage over the weekend than why customersbuy their company’s products. This is called the intuitive advantage that gives deep insight intothe market that larger companies have lost and don’t have (in many cases, not all).With the intuitive advantage you sense your moves rather than think about them. New ways ofpromotion, new products and product extensions become something you sense rather thansomething your rationally think out. I watched my father think up the concept of a continuousair freshener with a silk flower on top, which he named Flower Gel which today would lookcorny. Many doubted him, but the launch went ahead and it for a while became the bestselling air freshener on the Australian market. There was no way that any rationally basedmarket research could have told him whether the concept would be successful or not. Winnerslike this can only be the product of intuition.Excuse the pun, you smell success and you go for it – there is no way of rationalizing it out.Please rationalize for me why one restaurant can be incredibly successful, while another nextdoor can be a terrible failure. We have landed on the moon, but we are still not sure why oneconcept can be successful while others are dismal failures. Thomas Edison, John Rockefeller,Henry Ford, Ray Kroc, Bill Gates, Steve Jobs and Steve Wozniak, Michael Dell, Jerry Yang andDavid Filo, Jeff Bezos, and more recently Mark Zuckerberg all have one thing in common. Noneof them did any formal market research before they started their ventures. All were acts ofintuition.The process of being an entrepreneur is about moving from being a market outsider wherethings look all mysterious to take the inside running of the market where you make yourdecisions from the gut; just like all the above did. This is where the big changes can occur. Whowould have ever thought that milk we drank at school (yes it got quickly sour in the sun) wouldone day be “sexy Big M” (go and have a look at the original ads on You Tube) or one of theother adult brands now in the market. This could not have been a rational act, only an intuitiveone. Who would have thought that one day we would use our mobile phones to take the familysnaps. Who would have thought that we would have 24 hour news, movie, sports, drama, andeducational programs coming down by satellite into our homes. These ideas didn’t come fromdetailed market analysis, they came from the gut. This is the power of intuition in the market.Intuition Matches Dreams with Reality in the Marketplace
The aim of marketing is to either attract consumers away from existing products, or create newsources of value. Therefore the key to success is finding new sources of value consumers willaccept. This is heavily dependent on intuitive thinking but not a straight forward process.Before any start-up an entrepreneur usually visualizes something they have in mind for themarket. When an entrepreneur launches a new product, rarely if at all, do consumers “beat apath to your door.” Extensive modifications to products are usually required during the initialmarketing process, both before and after introduction to the market.This difference between what the entrepreneur visualizes and what the consumer will acceptcan only be bridged through intuition. Intuition drives an entrepreneur’s flexibility to changetheir ideas about the products, events, or services they offer to the market. Without thisintuitive flexibility, there would be many more failed ventures because of stubbornness tochange when original ideas are not accepted. To do this successfully means transcending theego.This is how entrepreneurs learn what consumers really want through the trial and errorprocess. One case in point is a boutique handmade chocolate manufacturer in Collingwoodcalled Mámor Chocolates. The company was recently established by the proprietor HannaFrederick producing the most superb Hungarian style handmade chocolates. However salesthrough retail outlets and markets were very poor around Melbourne. Hanna started organizingtasting events which really became an instant success and today Mámor is a very popular “wordof mouth” promoted organizer of events which sell lots of chocolate.Intuition is what guides the entrepreneur about what the consumer wants, as very littlemeaningful market research can be done to assist in making these types of decisions, especiallywith the types of concepts outlined above.Developing Your Place in the MarketAs mentioned in the last section, marketing is about attracting consumers away from existingproducts, or finding a new niche or position where “new” value can be created for thecustomer. Once this opportunity has been identified, one can go about creating the strategychain that will best serve your purpose based on what resources, skills and capabilities, andnetworks you have available. The steps in this process are shown in figure 5.1. below.
Newly identified Opportunity opportunity What strategies are required to successfully exploit the new Needed opportunity and meet the Strategies organizations new goals? What type of organization and Needed business model is Organization needed to support the selected strategy? What skills, competencies and technologies are Needed needed to support the new business model Skills & capabilities and strategy? What resources are needed to support skills, competencies, Needed technologies, new business model and Resources strategy? What networks are needed to exploit the opportunity, acquires Needed skills, technologies and resources, support the Networks new business model and strategy? What goals are needed to exploit Goals the newly identified opportunity?Figure 5.1. The steps involved in creating your place in the market.If one is able to match the opportunity with the right strategy correctly, there is little directcompetition, and there are a sufficient number of consumers who see the product or service asproviding some new form of value for them, then the new venture may have a rapid rise tosuccess. Just look at the success of the iPad.Marketing is about flexibility which allows evolution, but the big breakthroughs are madethrough intuition. Undertaking market research to determine that more people like red rather
than blue packaging will never create any future breakthroughs that intuition will. After all theautomobile, airplane, motorbike, home computer, notebook, Pizza Hut, and KFC, were allproducts built upon intuition rather than analysis. The second issue is that stubbiness blocksintuition and evolution of the market which is where new opportunities come from.Summary • The modus operandi of entrepreneurial and conventional marketing is very different. • Entrepreneurial marketing requires imaginative and intuitive innovative approaches to marketing and promotion. • Entrepreneurial marketing can be a very effective tool in a local area, but becomes more difficult as the market area grows. • You really have to develop an in-depth understanding of the market to operate with intuitive advantage within it. • Most of the great market successes were based on intuition. • The aim of marketing is to either attract consumers away from existing products, or create new sources of value. • Entrepreneurs have to work hard initially to get consumers to accept new products and usually have to modify their concepts through trial and error and intuition. • To be flexible in the marketplace, you must transcend your ego and stubbornness. This is where entrepreneurs really learn what consumers want. Market research is of little help in this matter. • Entrepreneurs must find new niches to establish themselves within and then align their strategies with the opportunity, with coordinated resource, capability, and network support.Some More Intuition and the market Tips: • Learning the Market: The more intricate your knowledge about the market is the better intuition you will develop about it. Learn in detail; who are the competitors? How big and powerful are they? What products do they have? What range of extensions and varieties do they have? What are the price ranges? What positions are there in the market? Where can you buy the products? Etc., etc, etc. Learn the market until you start to feel it and sense what changes are happening. After some time you will be able to anticipate what will happen – this is when your intuition kicks in.
Chapter SixIntuition and SalesSales build a business and the art of sales requires specific skills, experience, and practice to beeffective. Intuition is paramount through the sales process as an aid to guide the salesperson inmaking successful sales. Intuition can be developed through knowing the basic sales steps andpracticing them to build up experience.The importance of sales to the start-up companyMost companies begin on simple ideas. It is the success in bringing these ideas to reality andtheir consumer acceptance that determines how successful the company will be. Therefore if acompany’s ideas in the form of a product or service are not successfully sold to the consumer,the company will not exist for long.Where would have Thomas Edison been if he had not been able to sell the concept of electricityto the general public in the 1880s?Where would McDonald’s be today if Ray Kroc in 1955 did not sell the concept of standardizedburger quality and family orientated surroundings for dinning?Where would have Jay Van Andel and Richard DeVos been if they did not sell the concept ofNutrilite to the public, later forming AMWAY?In each case it is not the invention or idea that is important, selling the product or idea to thepublic is what makes or breaks the entrepreneur. There are plenty of failed entrepreneurs withbrilliant ideas or inventions in the trash-bin of history who were not able to sell their concept toothers.In the majority of cases, start-ups are about sales and nothing else. In a start-up company, theentrepreneur has to work harder and smarter than established companies just to survive thefirst six months to one year. It’s a steep learning curve for one with little experience, but aperson can become very competent very quickly if they know the basic sales steps.Sales are the frontline of all the plans you have for your idea and venture. It’s make or breakand no other company functions can be sustained long without sales. Sales are the driving forceof the company. The wellbeing of the company and everybody within it is dependent upon thesales function.
When I first joined the family business as a junior salesperson, one of the veterans pulled measide one day and told me in no joking a tone that “a company is like a cricket match…..thesalesmen are the batsmen, the production people are bowlers, and the accountants are thescorers.” Being a salesperson is a noble profession just like being a sportsperson, a samurai, ora commando – all having a number of important things in common; skill, practice andexperience, with intuition as the guiding light.The Noble ProfessionIndeed sales is a noble profession, often forgotten about in the entrepreneurship andmanagement books, even with the importance it has to the wellbeing of the firm. It is throughsales that people know your company. Sales are almost a totally unsupervised environmentwhere tact and social intelligence are important assets. Most of your and employees pressuresand stresses will come from the sales area, and instant decisions have to be made on an almostdaily basis. Sales requires problem solving skills, respect and like for the products you sell, ahigh level of self confidence, a willingness to sell and learn, an ability to get on with all types ofmanners and personalities, and the ability to take the hard knocks on the chin. One also needshigh energy, patience, perseverance, a slight competitive tendency, and an ability to empathisewith others. Least to say, sales is not only about working hard, but working smart, as one has tothink all the time. Sales are about the abovementioned skills and above all, intuition whichluckily can be built up and developed, as we will see.Here are the Basic PrinciplesBefore moving onto the basic sales process it is important to understand some of the basicprinciples of sales. First, it is important to understand that very few sales are actually achievedthrough rational decisions. Customers will generally not be very enthusiastic at first about theproducts or services you offer. One must always remember that sales are not an argument andwinning any argument will generally not win any sale. Likewise, a sales interview where thebuyer does not engage the seller with any objections, will also rarely result in a sale. Sales arecreated through systematic work, flexibility in approaches, tact, pleasantness, but with adynamic and forceful approach.Most sales approaches fail because we fail to communicate directly to the customer,understand how the customer really thinks, and don’t bother to follow up. Rarely on the firstinterview will you get any sale. Sometimes we blame our failure on anything else but ourselves,and remain too rigid in our approach, believing what we are doing is best. Intuition can help
prevent these types of failure if it is cultivated enough to help us understand what is going onwith the customer.The product or service is actually of secondary importance. We don’t sell the product butactually stimulate the customers need for it, or in the case of a trade or B to B customer,stimulate the need for sales/profit.Fortunately our ability to sell can be improved through knowledge, experience and a constantwill to improve. The more we learn, experience, and practice, the more our intuition will growand guide us through the whole process.Building up Sales SkillsGenerally customers have little interest in new innovations. Habit is a major part of our lives,where in the buying domain, risk and change are generally avoided. The customer is afraid oftaking risks and wants to avoid extra effort. He or she may not want to improve presentconditions and dislikes being criticized by those around them for making any “wrong” decisions.This is a major barrier to the entry of new products, services, and suppliers to the market. Thisattitude has prevented many new products succeeding in the market. We must portray ourproducts and services as simplifications or developments that will fit easily into existing habits,rather than being something radical. We as salespeople must make allowances for thesereactions and must recognize and influence customers if we are to be successful. The less habitis changed – the better the chance of gaining a sale. Again intuition is the tool that tells us ourprogress and guides the whole case we put across.Presenting Our CaseThe key in presenting any sales case requires the salesperson to; 1. Convince any customer that they are not the only one. Customers will welcome proof that the product is practical and many others use the product. 2. Convince any customer that new product acceptance requires no special effort, by offering help, instructions and advice on the introduction of the product. 3. Listen to criticism about the product, where one must be sensitive to any justified resistance based on the need to change habits. Don’t force people to change their habits. It is very difficult to convince someone of something he or she doesn’t want to be convinced of. He or she must go through a change. We must allow time for this process and develop the new idea, step by step (it can take weeks or months sometimes). Don’t take it head on and don’t find fault with the customer’s attitude.
4. Continued service through regular meetings will help initiate the required change in habits.Patience, enthusiasm, time, and especially intuition are required to effectively put a case acrossto potential customers.Gaining New CustomersAs mentioned, potential customers usually provide resistance to buying new products. Some ofthese reasons can be summarized as follows; 1. There is a general tendency for customers to test a salesperson’s will and strength. With experience, intuition will tell you when this is just a game or a much deeper hesitancy on the part of the customer. 2. Customers like to observe salespeople before buying from them. Intuition makes you aware of this observation period and to develop empathy with the potential customer. 3. Customers are also busy people and intuition will tell you, when to persist and when to back down. 4. In B to B buying many businesses have a number of formal steps they must go through before dealing with the new supplier and buying a new product. Opening a new account takes a lot of work and one must also identify who is really the decision maker. Also remember a customer may have a limited budget or be thinking about the next stock- take.Steps in the First Time SaleNow let’s have a look at the basic steps required to make a sale to a new customer. The biggestsuccess factor is your willingness to call on new customers. The best time to call on newcustomers is when you are having a good day and on a psychological high.The first step is to determine the potential of the new customer. Can they use the product? Canthey afford the new product? Do they use enough of the product to make it economical to callon them? The answer to all these questions usually has to come from a mental summing upthrough intuition.With a B to B customer, one must determine the type of purchasing system the customer uses.In many cases where an outlet may be a branch, purchasing is conducted from a central office,etc. These issues may require some inquiries, so be friendly to all, as this will help you find thecorrect person. People generally like to help someone with a pleasant demeanor.
Plan your visit – anything not planned is likely to fizzle. Remember your sales arguments beforeyou meet the potential customer. If possible, have samples, or in the case of a service all thenecessary printed material to help you explain. Try to get the best impression across to thecustomer, especially when the customer is busy or distracted – body language counts. Try anduse a little humor (not dirty) to build up some rapport and empathy. Anticipate the objectionsthe buyer will put across and how you will deal with them. Plan how to start you sales meeting.You are like a samurai who must improvise according to the circumstances of the meeting.Intuition is your only friend during this process.Empathy is a very important ingredient in the sales process. Empathy is a capacity we have toconnect to others and feel what they are feeling. Empathy helps a person know emotionallywhat others are experiencing. Empathy is a type of imagination where we imagine what andhow another person feels. Through our sensitivity we pick up other people’s body movements,facial expressions, tone of voice and narrative, as a means to sense their feelings, emotions andbeliefs. Through empathy we reduce interpersonal ambiguity.However we must be very careful to the differences within the various signs we read and pickup from others. For example a parent may have an aspiration about further education for theirchildren, but what are the sub-conscious reasons behind their aspirations? This is notnecessarily easy (even for trained psychologists) to determine without time to comparenarratives and other signs given at other time by the parents. The potential motivations for aparent’s aspiration for their child’s higher education are shown in Figure 6.1. The reality couldbe any one or combination of these reasons. Attempt to Deny an unhappy impress listener Keeping Face family life Keeping up with the Narrative device of “Jones” optimism “We would be very happy if our children undertook higher education” Cultural Could be the truth expectations Showing off
Figure 6.1. Possible reasons why a parent has aspirations for theirchild to undertake further education.Often the potential customer may put up a last reason why they don’t want to buy the product,sort of like straw resistance (discussed under objections). Once answering this objection, don’tbe scared to ask for an order as sometimes it is difficult for the customer to conclude thediscussion and it will just continue. Intuition will tell you when to ask, and when it is time toconclude, successfully or unsuccessfully.If you are turned down (and this maybe 50% of the time) – evaluate. Sit down and go throughhis or her objections and how you handled them. Think about what to do next, listen to yourintuition immediately after the meeting and record it in your dairy. Plan the next call and followup.Objections and How to Overcome ThemThe sales meeting is primarily about objections a potential buyer will put up and how youhandle them. Objections are a normal part of the selling process, and without them, sales arerarely made. The salesperson must identify the objections if he or she is going to persuade acustomer to buy and make a sale. Objections actually help the salesperson as they indicate ashow of interest from the buyer. Once again you tool of trade is your intuition.The only type of objection that is dangerous is one that the salesperson doesn’t pick up, and/ordoesn’t have any answer for.The basic types of objections are: 1. Unspoken objections where the customer is not too sure how to express themselves (or is unable to because the salesperson does not give them a chance). You need your empathy here to pick these types of objections up. 2. Prejudice and preconceived opinions that are usually illogical and emotional objections. Reason and logic cannot counter them and your intuition is required to see where the customer is really coming from. Highly refined intuition is needed here. 3. Malicious objections where the customer puts the salesperson under discomfort, which may arise from the temperament of the customer. Intuition and patience is required here. 4. Simple requests for information that require further information to make a decision. You need intuition to read this need from the customer.
5. Prestige objections without any factual foundation which are usually raised just to show off to try to impress the salesperson and other listeners. Intuition will tell you when to placate the ego of the customer. 6. Objective objections about the proposal itself are requests to negotiate, where intuition is very important to read what is required to gain the sale. 7. General sales resistance that has a general prevailing negativity towards the salesperson. This usually occurs at the beginning and experience and intuition will guide you through handling this type of resistance, and finally 8. The “last stand” where a final objection may be raised shortly before the customer decides to buy. Intuition will tell you that the tone of voice will indicate that the customer is ready to buy once this objection is settled.Dealing with ObjectionsWith experience, intuition will tell you the right time to answer any objections. This is just asimportant as the answer itself. You can answer any objection; 1. Before they are expressed: especially if you sense the customer is about to make a particular objection. It may be a good tactic to forestall the customer by raising the question yourself. This saves you contradicting the customer and reducing the risk of an argument. Otherwise you may purposely wait for the customer to raise the objection and choose to answer it immediately after it has been raised. 2. Answering the objection immediately: is the most natural time to answer the query and may enable the salesperson to run on with the presentation arguments in a smooth manner. This may go like …”I’m glad you brought this matter up as most customers had that worry until….”, using the objection to reassure the customer that he or she is not the only one. Again intuition is the tool of choice here. 3. Answering all objections later: delay your answers if you can’t come up with a satisfactory answer immediately. Delay your answer if you don’t want to contradict the customer directly. Delay your answer if the objection is not important, and delay your answer if you feel the objection is irrelevant. Get the idea of the importance of intuition here? 4. Not answering objections: Leave objections alone if you feel they will disappear during the progression of the presentation, and certainly leave them alone if they are made from anger. Don’t take the bait. Don’t answer the objection if you think there is no harm in letting the customer think he or she is right. This is where advanced intuition comes in.