5
Build on What You Find
As we have seen professional creators—such as entrepreneurs and anyone else who brings something into being that has never existed before—like to know how things really are. That’s especially true when they encounter problems and surprises. They also believe, counterintuitively, that if something goes wrong, it is a good thing—potentially a very good thing. They believe problems and obstacles are actually assets. Let’s see why.
WE KNOW. Saying “there are no such things as problems, just opportunities,” sounds like a cliché. But the fact is:
- Creaction is based, in part, on that assertion. And
- Entrepreneurs invariably point to it as one of the reasons for their success.
In the Prediction world we grew up in, we were taught either to avoid the unexpected or to overcome it. It’s all about efficiency. Optimizing. Achieving the objective quickly with as few deviations as possible. That makes a lot of sense in the Prediction universe. Once you have spent all this time figuring out what you should want and planning how to get it (predicting), then it’s all about making that prediction a reality. So, not surprisingly, people get upset when something unexpected (and presumably unwanted) appears in their path. Any deviation needs to be eliminated or overcome as quickly as possible.
However, Creaction is all about exploiting the contingencies and leveraging the uncertainty by treating unexpected events as an opportunity. Those who are successful in starting companies, or creating anything new for that matter, learn not only to work with the surprise factor but also to take advantage of it.
Because people who use Creaction often begin with a relatively loose notion of their goals (“I want to find a job in the entertainment industry”), they can incorporate what they learn from the problems or obstacles they encounter along the way. (“Hmm. I thought there would be a chance to open my own nightclub that could feature cutting-edge bands. But that market is already sewn up in the place where I want to live. That’s just the reality I face. Maybe I can either figure out a way to work with those clubs—I could serve as a talent scout—or take advantage of the work they have already done. I could create a Web site devoted to the new music scene and get the clubs to advertise.”)
In executing most plans, surprises are bad. But people who employ Creaction do not tie themselves to any theorized or preconceived market, strategic universe, or set path for making their idea a reality. For them, problems are a potential resource as opposed to a disadvantage. (“Who knew I would end up starting a Web site supported by the very clubs that I thought would be my competitors?”)
Problems are good news (almost always). Really.
They very often do something with the things that surprise them, treating those surprises as a gift (see the section on “Bad News” later in the chapter). Let’s spend a couple of minutes trying to understand why that is true and learn why obstacles can be a good thing.
How the world works
As we have said from the beginning, in the face of the unknown, action trumps everything, including thinking. One of the key reasons it does is that you never know for sure your thinking or planning is correct until you take action to discover if you are right. You may believe you know how the market will react, or whether you can find a customer for your product, or people who will support your new nonprofit idea, but until you actually do something to find out, you’ll never know for sure.
But what this means is that every step you take in the journey could change where you decide to end up.
You are only one thought away from an insight that can make a problem go away, perhaps turning it into an opportunity in the process.
Here’s why. Every action you take causes a change in reality. (Thinking doesn’t.) You thought you would be able to sell one hundred widgets a day, but it turns out the market reacted by buying two hundred (or fifty). You then have to stop and reflect on the results of your action and see what you have learned from selling more (or less) than you expected. You are no longer speculating about what might happen. You know. Now you have to figure out what it means and what you are going to do next.
How do you get creative with a surprise? Well, if the surprise is a good one, you take full advantage of it. For example, you thought everyone in the world would love your new iPhone accessory. They did, but now you are overwhelmed by demand.
The logical thing to do is to ramp up production, add distributors (perhaps worldwide), maybe raise prices, and think about creating additional products not only for the iPhone but for all other smartphones, like BlackBerrys. You might pursue this path for the rest of your life, or until it no longer feels right (it is taking up too much time; you realize you never wanted to run a company, only start one.) At that point, you might sell what you have and do something else. Companies morph all the time, sometimes to great success. The Marriott hotel chain began life as a nine-stool A&W Root Beer stand. The extremely fashionable and upscale store Barney’s in New York began as a discounter that sold showroom samples, retail overstocks, and manufacturers’ closeouts bought at auctions and bankruptcy sales.
If the surprise was a negative one—that is, your actions did not go as you thought they would; you encountered a problem or even a setback—it is then time to figure out a way of using that negative to your benefit.
Problems and even setbacks are resources to employ to your advantage.
Let’s say that the way your product attached to the phone unexpectedly interfered with the transmission characteristics of the antenna. Users complained of more dropped calls. You figured out how to change the design to negate this and in the process ended up with a product that not only worked much better, but looked a lot cooler. Even better, a year later when a major manufacturer tried to imitate your product, it made the same mistake that you had originally made and got egg all over its face. Suddenly you are the only company to turn to for a cool-looking phone that can actually make and receive calls.
Problems = Advantage
Running headlong into a problem and then solving it can give you a barrier to competition, or at least a remarkable head start in the marketplace. Why? Because you acted, and the competition didn’t. As a result, you know something they don’t.
When Isadore Sharp, founder of the extremely upscale Four Seasons Hotels and Resorts, started out, he assumed that the only thing that would matter for him was to be in the best locations. The problem he ran into was that every other hotel chain had the same idea. That was a huge negative surprise. If you are doing what everyone else is, you don’t have an advantage.
In solving that problem, Sharp stumbled on what turned out to be the Four Seasons’ ultimate competitive advantage. He created a two-pronged barrier to entry, as he explains in his autobiography, Four Seasons: The Story of a Business Philosophy: “One was our inventory of hotels . . . the largest group of authentically first-class hotels in the world, a physical product no other company had to the same degree.” The advantage was that he could offer the frequent traveler luxury one-stop shopping when staying in any of the world’s major cities.
The other advantage was his people: “Three decades ago, we had decided that what our customers most desired was whatever would make time away from home most pleasurable and productive. So, we set about raising service levels to match our first-class decor, a historic judgment call that had made superior service the major determinant of hotel profitability and competitiveness, and while finally recognized now by every hotel company in the world, we had a long head start.”
According to Sharp, “Location was no longer foremost in getting and keeping customers, it was people, people, people. This was now the decisive factor in our two-fold barrier to entry.”
As we said, a negative surprise that you encounter can ultimately become a barrier to competition, if you treat it like a gift as Sharp did. He accepted the problem that what he thought was going to be an advantage—location—wasn’t. (Everyone else could build in the same place.) He then took that fact (he had terrific locations, but many other people did, too) and asked what he could do with that. His conclusion: we can provide excellent service at these superior locations. That has given him a terrific edge in the marketplace.
Obstacles welcome
Everything is a gift. Well, maybe not every single thing imaginable, but assuming that everything is a gift is a good way of looking at the problems or surprises you’ll encounter in getting a new venture off the ground.
Why should you react to a problem with gratitude, whether you are trying to start a business or create something else? There are a number of reasons. First, you were going to find out eventually what people did and did not like about your idea. Better to learn it and learn it now before you sink more resources into the venture.
And as we have discussed, that feedback could help you take your product or service in another direction, or serve as a barrier to your competitors.
The same holds true if you were surprised. Why were you surprised? By definition, you were probably predicting or expecting something else. Good for you! You acted and got evidence. True, it was not what you were expecting or even wanted, but, as we have pointed out, that still puts you ahead of the people who are employing Prediction. They are still predicting, and not acting. Thus, they don’t have evidence. All they have is what they think may be true. In contrast, you know something they don’t (yet), and that is an asset. How big a one is yet to be seen.
Bad news
Okay, so it’s not a surprise. It’s a disappointment—so bad that no reasonable person can define what you’ve encountered as anything but a problem. Most people will try to solve it and get rid of it. That’s fine if you can. The problem has gone away, and, again, you’ve learned something that others might not know.
Ron Sarni and Todd Saunders know all about surprises big and little. They were convinced they had spotted a huge opportunity: they would create a fleet of food trucks that would serve Boston. There was only one problem, as Sarni explained: “We quickly found out that food trucks were banned in Boston. I mean they were illegal. You couldn’t have them. And so our first order of business was to actually change the hearts and minds of city officials.”
Surprisingly, they did. And the key, not surprisingly, was understanding politics. Food trucks appeal to people aged eighteen to thirty-four. And who comprised the biggest voting bloc supporting Boston City Council President Michael Ross? People eighteen to thirty-four.
But government being government, there were conditions that came with the go-ahead. One was that every food truck had to offer at least one “healthy option” on its menu. People who subsequently joined with Sarni and Saunders to create a food truck association complained this seemed to be “Big Brotherism,” but Sarni got them to see the mandate differently: “What a gift. They were serving as our focus group. Bureaucracy runs by public opinion. So if they’re telling us that we need a healthy food item, well, they were a built-in focus group telling us what the public really wants.”
But what if you can’t solve the problems you face. Try this: accept the situation to the point of embracing it. Take as a given that it won’t ever change and turn it into an asset. What can you do with the “fact” that it won’t ever change? Maybe it presents a heretofore unseen opportunity. Maybe you build it into your product or service in a way that no competitor (having not acted) could imagine. Instead of resisting and lamenting it, treat it as a gift and turn it to your advantage, something that the competition won’t have, something that will serve as a protectable barrier to entry, if only for a while.
You see this all the time. People with a health problem (diabetes, for example) start services to help those who are afflicted. Yvon Chouinard, an avid rock climber, couldn’t find equipment he liked, so he created his own. You probably know him better as the founder of Patagonia. Bernie Goldhirsh struggled for years trying to start a sailing magazine in the early 1970s. His problem? There were no resources for budding entrepreneurs to draw on. And so he started Inc. magazine to help people just like him.
The thing to remember is this: in the unknown, effective people work with what they have at hand—whatever comes along. They try to use everything at their disposal. That is why they are grateful for surprises, obstacles, and even disappointments. It gives them more information and resources to draw upon.
Another thing to remember: the lower your mood, the less likely you are to see reality clearly. So the state of disappointment makes it more likely that you will miss an opportunity right in front of you. Yes, you are upset. Get over it! Embrace reality and start embracing your gifts.
Coming full circle
The message of this chapter is pretty simple. If you come across lemons—otherwise known as business problems or obstacles—do indeed make lemonade.
Try this approach next time you encounter something unexpected. Despite how unpleasant it seems, say, “This is really good news,” and then try to make it so. The heart of Creaction is the ability to turn the unexpected to your advantage. That means your default position should be that there is never a problem without a potential profitable or pleasant solution lurking somewhere.
Let’s return to the thread we launched at the beginning of chapter 3. Understanding exactly the situation you face, problems and all, reestablishes creative tension. This tension exists whenever there is a gap between what you’ve got and what you want. That gap fuels invention and action in favor of your desires.
The desire part is relatively easy. You can’t escape what you want. Clarity about reality is the challenge. You always want to know the truth about where you are, and no matter how bad it may seem, you want to know what is real. The most straightforward way of doing that is to accept reality. Make it your friend. If you’re disappointed, move on anyway. Nothing quite eradicates a bad mood as quickly or as well as making progress on something that you care about.
Just Start:
An Exercise for Turning Liabilities into Assets
Finding solutions to the problems that you encounter or to the things that have you stuck can be difficult. One reason it is so hard is because you are the person trying to solve the challenge at hand. You see things a certain way. And the flaw with that, as Einstein is said to have observed, is “problems cannot be solved by the same level of thinking that created them.”
To escape that difficulty, sit down with someone, describe your problem, and then say to the person you’re with, “Tell me five ways this could be an asset for me.”
If you do—and listen with an open mind to what the person has to say—three things might happen, all of them good:
- Simply explaining the problem aloud could give you an insight into solving it.
- Your friend might actually come up with a solution.
- Even if she doesn’t, her suggestions could spark new thinking on your part.
Takeaways
- If you are faced with a pleasant surprise, for example, more people liked your idea than you could have ever imagined, simply proceed down the path you were heading—although you might want to move a bit faster to make sure the opportunity window doesn’t close.
- If the surprise is unwanted, treat it as a gift and accept it wholeheartedly. It gives you new information, new evidence, that your competition does not have. Solve it, if you can. If you can’t, see if it points to an opportunity or make it an asset (and build it into your product).
- Attitude is key. If you assume that everything, even the unexpected, is a gift, it almost invariably will be.