10 'Road Rules' for Entrepreneurs from Yahoo's CMO
Kathy Savitt knows a lot about entrepreneurship. Her first company, a marketing communications firm called MWW/Savitt, helped launch more than 100 startups, and in 2009, she went on to found fashion and beauty photo-sharing website, Lockerz.com. Today, she serves as the chief marketing officer of Yahoo, which she calls "the world's largest startup."
On Oct. 11, Savitt appeared at the second annual Cornell Entrepreneurship Summit here. The event, subtitled "The Beginning: From Nothing to Something," featured current representatives from Cornell's entrepreneurship program and Cornell alumni that have gone on to found well-known companies such as Behance, Shake Shack and Wayfair.
Savitt, class of 1985, gave the keynote speech, in which she discussed what she calls her 10 "road rules" of entrepreneurialism. These rules are a set of guidelines for anyone running a company, whether it's a one-person startup just getting off the ground, or a full-fledged operation with a team of employees. Here are Savitt's tips to help you on your entrepreneurial journey:1. Find your "why." What is your reason for starting this particular business? The answer, said Savitt, should not be "to make money," or to become the next big thing in your field. Your "why" — your raison d'être — should be an opportunity to solve a real problem that people have. Write it down and read it every day before you do anything else.
2. Focus on people first and foremost. A good entrepreneur knows that his or her success is dependent on other people. Whether it's your customers, your employees, your investors or all of the above, those individuals are the ones that will help you achieve your business goals. Savitt recommends encouraging these people with positive feedback, even when things aren't going according to plan.
"Optimism should be on every CEO's resume," she said. "If you don't have that, you shouldn't be in entrepreneurship."
3. Make deposits into the cool jar. Savitt defines the "cool jar" as a metaphorical receptacle for brilliant contributions to pop culture. Too often, startups try to be just like existing "cool" companies, and don't offer anything new or innovative. Savitt advised entrepreneurs to make all of their efforts be deposits into the cool jar instead of withdrawals from it.
4. Never refuse knowledge. Every business experience, good or bad, is a learning opportunity. As an entrepreneur, there is always more knowledge to be gained, and you should never turn down a chance to receive it. Listen to your competitors, customers and mentors and really pay attention to their valuable and perhaps unconsidered perspectives.
"Experience is the enemy of innovation," Savitt said. "If you refuse knowledge, you're limiting your resources."
5. Never outsource your core competencies. In the case of Yahoo, users expect the company to provide answers to their questions. Early on in her role as chief marketing officer, Savitt realized that Yahoo was hiring outside agencies to do what customers trusted the company to do. Today, 75 percent of its customer service operations are in-house instead of outsourced off-shore. For entrepreneurs, taking responsibility for your core competencies builds a sense of reliability and trust among customers.
6. Fight to stay small as you grow bigger. When your business is starting out and only has two or three employees, it's easy to include the whole company in the decision-making process. As your business grows in size and revenue, you might establish a hierarchy with titles that build what Savitt calls "artificial walls" between the executives and lower-level employees. She encourages business owners to maintain that startup mentality and keep the lines of communication open among all team members, regardless of their position.
7. Admit your blind spots and find your seeing-eye dogs. Savitt said entrepreneurs make one of two critical mistakes when they don't know how to do something: They mystify it and give unchecked power to others who do know how to do it, or they dismiss it with the mentality that, if they can't do it, it must not be important. Instead, entrepreneurs should find individuals who can guide them through the process and work with them to accomplish it.
8. Focus on right decisions, not perfect ones. Deliberating over business decisions to make sure everything is "perfect" can be a waste of valuable time. Entrepreneurship is not about being perfect, Savitt said; it's about making a series of good decisions quickly and sequentially. If you're unsure of what to do, she recommends seeking the advice of people you trust, making a decision based on that, and putting the issue behind you.
9. Follow the final exam principle. A misconception of entrepreneurship is that a great idea alone will bring success. Like a college final exam, 50 percent of entrepreneurial success is dependent on how well you execute your business operations. The rest is a combination of the strength of your idea and a little bit of luck.
10. Sleep. This last rule is perhaps one of the most important. Many entrepreneurs work around the clock, forgoing the rest they so desperately need to recharge and succeed. Savitt urges entrepreneurs to take the time to take care of themselves, noting that a lack of sleep can really affect your intelligence and decision- making capabilities.
"Entrepreneurialism is a long marathon made up of a series of short sprints," she said. "There are no breaks, and you need to sleep in order to go the distance."
Originally published on BusinessNewsDaily.