Regrettably, too many aspiring entrepreneurs get caught up worrying about their lack of hard financial capital which never seems enough. However, everyone has a wealth of soft capital to draw upon and unlike hard capital, never is depleted, only grows and strengthens over time.

No Risk, No Reward

When it comes to planning a new business start-up, the rule of thumb is that you should double what you think you’ll need to get your company off the ground and halve your expected revenues in year one—that is, you should overestimate the amount of money needed to keep going and underestimate how much you’ll bring in during the first year and maybe the year after.

That prospect is daunting. The threat of running out of money is the number one threat for any new business start-up.

But threats are only that: the possibility that something might happen, not the certainty of it. In a weird twist of human nature, we overestimate the threats and underestimate our strengths in a typical SWOT analysis. In psychology, it’s called the negativity bias, and for the entrepreneur, it throws an emotional monkey wrench into what should be a rational business decision-making process.

We overemphasize the negative possibilities in decision-making and underplay the potential positive outcomes. As a result, people are more likely to act to prevent a possible loss than to pursue a path to achieve potential gain. Thus, they revert to their inbred status quo bias—to keep things as they are—by choosing not to make potentially risky decisions.

But aspiring entrepreneurs can’t be held hostage by their innate psychology. Anyone can develop ways to overcome it. As the saying goes, “No risk, no reward.” So instead of getting caught up in a risk-avoiding cycle of fear around the potential of losing money or running short, focus on the strengths you bring to the table and the opportunities that lie ahead.

Maximizing Soft Capital 

It all comes down to how you use and allocate all your strengths, i.e. your soft capital: ’

• Human capital combines your life experiences, skills, creativity, and physical, mental, and emotional well-being.
• Intellectual capital is the cumulative education, training, and hands-on experience that equips you with critical thinking, problem-solving aptitude, and the ability to innovate.
• Cultural capital is your connections across communities with common interests, backgrounds, and behaviors.
• Experiential capital is your firsthand experience working on projects, investigating new ideas, learning new skills, and achieving goals.
• Social capital is the strength of personal connections made throughout your network of associates, colleagues, family, and friends. Your network connections influence you, and you can make them work for your business.

Taken together, the strengths of the corporateneur’s soft capital outweigh any financial or economic capital shortfall. And unlike financial assets, you ’don’t have to go to a bank or venture capitalist to get more. ’There’s no limit to your soft capital potential.

Leveraging Your Working Capital

When starting a business, even before, you worry about all kinds of things that are beyond your control. ’That’s a total waste of the two most valuable things you have going for you: your time and your personal resource. That’s the capital you must conserve and use wisely.

And since these are also the only two things you can control in business, whether as a one-person operation or a big corporation, you must allocate that personal capital for the maximum return on investment.

As an entrepreneur, how and where you spend your time matters most, and every minute of your time amounts to money lost or gained. ’Don’t waste your time doing things that ’won’t get you closer to your goal, and make sure your time is spent only on the high-potential activities and most-influential customers that will have the biggest payoff.

You must plan each day to maximize the activities you engage in for the greatest return on your irreplaceable time investment. Once your time is gone, it’s gone, unlike money, which will come and go. Yes, it is essential to practice good financial management—but even more so to develop good habits in time management. And by managing your most valuable asset, your time, well, you will also be leveraging your soft capital to help grow the hard kind.

Focus your time on making sales and generating cash flow to keep moving forward. And most of all, you can’t afford to spend time on the unproductive distraction of worry. That depletes your soft capital rather than builds it. Make your plan, and work your plan inch by inch, step by step, and mile by mile.

This and more can be found in my new book co-authored with Ken Rohl, The Corporateneur Plan. It’s become an Amazon Bestseller in the Knowledge Capital, Business Mentoring and Coaching, and Self-Employment categories and it gets honorable mention in Free Enterprise and Capitalism too.

The Blake Project Can Help Your Startup Win The Future In The Brand Strategy Workshop For Startups

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In reality, brand building is as crucial to early success as product development and fundraising. Even if you have a groundbreaking, innovative product, without a strong foundation to effectively communicate its value to the market, your business is unlikely to thrive. Developing a robust brand is essential for the initial success of startups.

The Ugly Baby Syndrome.

Startups often struggle to convey the value of their product or service innovations in a way that resonates with investors and potential customers. Initially, founders tend to believe that everyone will instantly understand the significance of their groundbreaking idea. Consequently, their messaging often falls short.

Similar to a newborn learning to walk, stumbling and getting back up repeatedly is part of the process. However, the fast-paced nature of venture capital deals is unforgiving to startup founders who cannot effectively tell a compelling story about why their innovation matters to anyone beyond their immediate circle.

The essence of brand building lies in a relevant and differentiated value proposition. Founders must articulate why their “baby” matters to a specific group of people. It’s important to remember that in the beginning, nobody cares!

What Sets Your Startup Apart?

The marketplace is filled with countless businesses, products, and services, all blending into a sea of sameness. For startups to have a chance at progressing beyond the early stages, their value proposition must be well-defined.

Startup CEOs undeniably invest long hours, days, weeks, and years into their business. However, they often fail to dedicate time to work “on” their business. Brand strategy is the process of working on the business. The first step in building a sustainable brand is gaining clarity and confidence in defining its value in compelling ways.

Founders need to engage in deep introspection to discover and articulate what makes their innovation good and different. In a world where commoditization is on the rise, relevant differentiation becomes the source code for brand building success.

Being good and different means offering value that is highly sought after by a well-defined target customer and is not easily found elsewhere. When you can define this for your business, you will enjoy a competitive advantage in your industry category and be able to command premium pricing.

Brand Strategy Is Not Marketing.

One of the common misconceptions among startup CEOs is that brand building is merely a marketing activity. In reality, brand strategy and marketing are two separate but interconnected endeavors. Brand strategy involves understanding and defining the core essence of the value offered to the market, while marketing focuses on articulating the value and delivering the message through various communication channels.

It makes little sense to create extravagant marketing campaigns without anchoring those plans in a higher guiding strategy that defines what your brand represents in the minds of target customers.

Further, brand strategy requires genuine market insights and creative thinking, whereas marketing requires financial resources. Marketing should always follow a well-defined brand strategy, not the other way around.

Branding Starts With A Memorable Name.

As a startup grows over time, it will acquire loyal customers, build trusted relationships, and develop a reputation that translates into greater financial value. All of this can be achieved more effectively and efficiently by starting with a strong, memorable name that serves as the foundation for your brand’s reputation. A name is the first story ever told about your offering, do not discount the importance of strategically thinking it through.

There Are Three Key Components Of A Strong And Enduring Startup Brand.

A brand is the sum of all experiences a customer has with you. Strong and enduring startup brands understand this, and excel in their approach to bringing these three components to life:

1. Brand Identity: This encompasses the core essence of your brand and how it resonates with customers. It is represented by symbols, language, and the organization’s culture and/or heritage. Example: Apple’s brand identity is synonymous with innovation, simplicity, and elegance.
2. Brand Promise: This refers to the benefit your brand brings to customers. It represents “what” the brand provides that is highly valued and not easily found elsewhere. These associations are based on the functional, experiential, and emotional benefits customers derive from your brand.Example: Airbnb promises unique and authentic travel experiences that go beyond traditional accommodations.
3. Brand Experience: This represents the tangible interaction and transaction customers have with your brand. It reflects “how” your brand delivers on its promise. These associations are formed through real-life engagements with your products, people, and places.Example: Tesla provides a seamless and exhilarating electric vehicle driving experience along with a network of charging stations.

These three components form the foundation of an enduring brand right from the start. They must be intentionally designed and aligned within the minds of your target customers. At The Blake Project, we ensure our startup client’s brands build this foundation and ‘own’ their value in the marketplace with credibility and effectiveness. Further, we prepare them for the journey ahead, by showing them how to be good stewards of their brands.

You Only Have One Chance To Make A Good First Impression.

This statement holds true for everyone, but it carries even more significance for startup brands. Whatever startups are doing, chances are it’s their first time doing it. The first presentation to an investor, customer, or key employee must be simple, clear, and compelling because second chances are rare in the startup world.

Example: When Airbnb pitched their concept to investors for the first time, they focused on the idea of “belonging anywhere” and showcased the potential for regular people to monetize their spare space.

At The Blake Project we are helping clients from around the world, in all stages of development, define or redefine and articulate what makes them competitive at critical moments of change. Please email us to learn how we can help you compete differently.

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Truth is, nobody cares.

Not really. Sure, your mentor may care. Your spouse may care. Your startup investors may even care — a little (but remember they have other startup investments to protect them in case you run aground). But even your mother is secretly hoping that you will find a good job with a health plan.

This is commonly referred to as, Against all odds.

In fact, most people are expecting you to fail.

Perhaps even hoping you will fail, so you get pulled back into the dronefield.

As king-of-melancholy rock singer Morrissey croons:

We hate it when our friends become successful…If we can destroy them, bet your life we will destroy them.

This is not pessimistic or negative. It is realistic. 90% of new products fail, not because they aren’t better, more innovative or even disruptive, but because they have not clearly articulated their reason for being or attached themselves to people in ways that make them care. In other words they do not pivot from being meaningless to becoming meaningful.

This pivot from being meaningless to becoming meaningful is 400% of your new job.

Entrepreneurs have to attract positive energies and create momentum that incites the public at large to level you up — to care just a little more about you and your enterprise than everyone else trying to capture their attentions. To prefer you above their other choices. How do you do that?

You may be enthusiastic, have great attitude and a great business plan, but what you really need to move from cult to culture is great narrative.

What’s your story?

Every great narrative starts with “Once upon a time…”, “One hundred years ago…”, or “We went out for drinks after work and then…”. What inspired you? What sparked you? Where did your disruptively breakthrough 10X idea come from? Who are you? It’s never too early to start your creation myth.

(Yes. Performance marketers poo-poo this idea. Skip the origin myth, they say, get right to the action. Convert. So they iterate and hustle each transaction — moving on to each new customer until they reach the dead zone. By doing so, they turn each opportunity for experience, advocacy and word of mouth into a one-time transaction. And leave the churn of potential fans and positive growth-spurting WOM in their wake.)

In the beginning, your story may be all you have. “What is it?” “Where’d you get that?” “Who are they?” All simple questions that need smart answers so that you can lead people to the next question.

Why are you here?

Explain yourself. We have don’t have time to listen, so make it quick. Think. Think different. Invent. Those are the reasons for being for IBM, Apple, and HP, respectively.

Some people talk about the “Why?” This is the why: Why should I care?

What basic human need (not want or desire, but need) are you fulfilling? There are thousands of books about strategy: Strategy: A History by Lawrence Freedman is one of the best.

Why you exist is only the next step in your narrative.

You must also identify yourself. People need to be able to find you — in a crowd, on the shelf, online. Sure, that can be your logo: think the iconic Nike swoosh, the America flag, the Google G. Lots of people start out with a logo and a home page. It means you’re in business, right?

Sight, sound, smell, touch and taste are all iconic sensations wired directly to our brains to create positive or negative imprints (the taste of Blue Bottle, the playing fields of Call Of Duty, the sensory-surround of web4 and virtual reality.) The sensory fragrance of Caldrea cleaning products actually makes people want to clean.

Icons are memes hard-wired to our brains. They spontaneously signal whether we should come closer, or run for our lives.

Next: Know what things you want to celebrate.

Polaroid was the legendary start-up in the 1960s: technologically innovative, disruptive, design-smart and founded by a Harvard drop-out (is any of this ringing bells?).

And, by the way, in order to create the patent-wielding Polaroid film substrate, chemicals had to flow down an eight-story glide. (Imagine telling investors that we have a great, innovative idea — but first we have to build an eight-story building!)

In the Polaroid cafeteria, a pyramid chart was posted with the names of the people who had earned patents. Polaroid celebrated patents.

Other companies celebrate new hires. New clients. Awards. Front page articles. Office space. Stock price. What do you celebrate?

Knowing what things you celebrate is the root code for culture.

Process is ritual.

This is the way we do things (and it’s different from the way “they” do things).

Act different. Be different. Do different.

Make others wish, dream and hunger to do things the way you do.

In order for people to consider you differently, you have to help them think about you differently. So surround your new idea with the unique vocabulary that identifies you. The best, easiest example: “Iced grande skinny decaf no foam latte”. We all had to learn new words just to order a cup of coffee.

We also had to learn new words to play Halo, use ChatGPT4, and how to cook using tofu.

Language creates culture.

Language sparks differentiation. Language creates mystery and desire: What does that mean?

“Language creates culture.” Say it again. Baseball fans, coders, accountants, gangs, gamers, historians of the Napoleonic wars — all have words, phrases and language that they use to express events, ideas and moments of community.

These are excited, vibrant social communities fanning their fandom. When people start using your language, it means they want to become a part of your tribe.

And still, nobody cares.

Especially those people standing over there — the naysayers that keep telling other people how much you suck. The competitors and trolls who shrug and shake their heads and tell whoever will listen that you’re not getting it done, you have a long way to go, you’re never going to pull this off. The ones who say it wasn’t a good idea anyway — you couldn’t scale, wrong metrics, wrong technology, wrong consumer, wrong wrong wrong, all wrong.

You have to understand that they really don’t care and never will. The cruel fact is that some people will never become a part of your Venn diagram. Not everyone is going to buy you or buy into you.

As Peter Thiel once declared, “Almost everyone is going to tell you your idea sucks…The haters are never going to go away.”

Then know this, too.

Nothing will reaffirm your commitment and the energy of your partners and team than having someone else tell them, “you are wrong.” Think of a Dunkin’ Donuts drinker trying to convince a Starbucks drinker. Red and blue states. Vegans versus carnivores.

Stand on your side of the line. Tell people, “Come, stand over here. Be one of us. We’re not like them.”

“Startup founders tend to be functionally obsessed, not story obsessed,” adds Mike Parsons, chief executive at Apollo Advisors. “Tell us why that killer function or app makes our world better. That’s the story!”

Create your own pieces of narrative and stand tall in the place you have created for yourself. You will trigger the emotional parts that make your ecosystem feel better than any other. Eventually, more and more people will care. Really care.

And if their caring not only feels good, but is rewarded with a constant drip of stories spread across social, digital and traditional media that remind them of the best parts of why you exist, others will crowd around you.

Better make room.

The Blake Project Can Help Craft Your Story In The Strategic Brand Storytelling Workshop

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I have advised startups for more than twenty years, and simultaneously have designed and run behavioral experiments for my academic research for over thirty-five. It took a while for the light bulb to go off, but eventually I began to think of start-ups as experiments. There are valuable lessons to learn from this analogy. These may sound abstract, even theoretical, but I have found that they are helpful for founders and start-up teams, including VCs. In exchange for the level of abstraction, I’ll keep it simple: let’s look at three lessons.

By definition, a start-up environment and its expected outcomes are uncertain. The idea/product may or may not work, and there may or may not be a market for it. It is uncertain how big the market is, or could be, and there is uncertainty about whether this particular venture is the means of realizing the value that is posited. In Silicon Valley, startup ideas are sometimes described as “hypotheses” that need to be tested. From there, it is not a large leap to think of startups as experiments designed to test those hypotheses. This way of conceptualizing startups carries implications.

First, to be viable, to get funded, and to attract a competent team, a start-up idea must be an interesting hypothesis – one worth putting together a start-up to test it. In practice, this often means an idea to serve a large, growing, and hopefully unserved market. But it also means that the hypothesis must fit into a current narrative about the state of technology in its domain, and the narrative of markets, such as the evolution of consumer behavior or ecosystem within which it plays. For example, social media may have been just as technically feasible as search in the early days of the internet, but as a hypothesis it made sense to test search first and social media later because the market, including consumer behavior and the advertising ecosystem, provided a better test later. In general terms, there is a natural trajectory or progression for the evolution of ideas, and the hypotheses are best tested in a certain order.

The implications for start-ups are clear: know the narrative, know where your idea/hypothesis fits, know when is the right time to test it.

Which brings us to a second implication of treating startups as tests of hypotheses: the test must be strong. In practice, what this means is that you must take the best shot possible: the startup idea should not fail because of weak management, weak funding, weak products, or a weak economy. If it fails, it should fail because the hypothesis was not true: it should fail because there was no market there. Of course, in practice there are many more moving parts in a startup than are measured, let alone managed, so a pristine attribution for success or failure is not possible. But there’s no denying that everything about a startup should be designed to test whether there is a market there. A tight design is one that rules out extraneous explanations or possible attributions for the success or failure of a startup: if there is a market, it will be found and addressed, and if there isn’t a market, that disappointing truth will be revealed for all to see. The team’s efforts are designed to deliver a conclusive answer: yes or no. What this means is that every startup must have success metrics that provide a test of the central hypothesis.

Which brings us to the third implication of treating startups as hypotheses:

Everything the startup team does is about reducing the uncertainty that you begin with. Specifically, you are out to reduce two types of uncertainty: (1) Is there a market there? And (2) How quickly can you provide a definitive answer to this question?

Conceptualizing a startup as an experiment means that that definitively demonstrating that there isn’t a market there can be almost as much a success as proving that there is a market. It is not surprising that in experienced start-up environments such as in Silicon Valley, the failure of any single startup carries little stigma for the founders or team: it is understood that the team accomplished its mission of definitively testing the hypothesis by demonstrating that there was no market there.

For the funders of the startups, the value of looking at them as experiments is evident. Not every experiment will succeed, but each experiment needs to be tight enough to validate or rule out the central hypotheses that was funded. Knowing that the startup provided a disconfirmation of the hypothesis also helps make another critical decision: knowing when to stop funding it.

A startup designed as a strong experiment, with clear hypotheses, measurable success hurdles, and a well-defined timeline (milestones) is far more likely to succeed than one that is set up to try and sell a product.

Contributed to Branding Strategy Insider by: Niraj Dawar, Professor Emeritus of Marketing and Author of TILT: Shifting Your Strategy From Products To Customers

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1. The ability to thrive in ambiguity. Running a startup means never having near as much information as you’d like when it comes to making important decisions. Forget about taking 30 data points and running a regression analysis. You’ll be lucky to have three. You’ll effectively be guessing most of the time. Are you comfortable with never knowing anything for certain?

2. A knack for salesmanship. You’re going to be selling every moment of every day. Not just to customers. Also to investors: Why should they back you? To talent: Why should they abandon their secure jobs to come work for you? To vendors: Why should they give you favorable terms? And don’t forget your spouse or partner (if you have one): Why should they agree to let you imperil your family’s future with this crazy dream of yours?

3. Equal parts EQ and IQ. Most great founders aren’t the stereotypical socially awkward geeks. They’re actually great with people. They know how to inspire and motivate. They can put their egos aside and listen to their teams, advisors, and investors. So be sure your EQ (emotional intelligence) rivals your IQ.

4. Organization and discipline. When you’re the boss, no one is going to get on your case if you’re disorganized or slack off. You have to be your own backstop. Do you naturally create plans and knock things out on your own? Can you keep track of the big picture while also figuring out what needs to move forward in any given week or month?

5. Energy and drive. You’ve probably heard the expression, “It’s not a sprint; it’s a marathon.” That’s true, except that founding a company is a marathon made up of seven-minute miles. You need to keep moving, at all times.

6. Inspirational leadership. Can you set a vision—and a mission—and get people excited to follow you? This doesn’t necessarily mean pulling off a Henry V on St. Crispin’s Day (though kudos if you can). Inspiring people come in all kinds of packages. It’s not about how you do it. It’s just that you do it.

7. Self-confidence. When I started Okta, I always said I was “betting on myself”— that I had what it would take to grow Okta into a successful company. Sure, that confidence wobbled in our darkest times. But I always believed that if I just kept chipping away at our problems, I would find a way.

8. Resilience. Napster founder and early Facebook president Sean Parker famously said running a startup is like chewing broken glass—to succeed, you need to fall in love with the taste of your own blood. And it’s true. You’re going to get punched in the mouth every day. Are you the kind of person who’ll just keep getting up? Or will it eventually flatten you?

More Skills Entrepreneurs Need To Master

A lot of people think being an entrepreneur is just about coming up with a great idea. (In the tech industry, they often think it’s about having a great idea and being a great programmer.) But taking your idea from zero to IPO involves so many more tasks than simply building out the concept you’ve thought up. Take a look at this checklist, and ask yourself: Can I do that? Am I going to enjoy doing that? Because these things are what your job is actually going to consist of, especially the bigger you get.

• Can you recruit a team, especially people willing to leave safe jobs at established companies, when you can’t pay them as much and you can’t guarantee they’ll have a job a year from now?
• Can you attract investment capital, or at least convince a bank to give you a loan?
• If you’ll be selling to corporations, can you figure out the right executives to approach and convince them to give you time to pitch them?
• Once you have a prototype, can you persuade customers to test-drive it? Or better, to pay you to participate in a pilot program?
• Can you build a financial model, learn to forecast, and manage a budget, cash flow statement, balance sheet, and income statement?
• Are you comfortable with conflict? Can you resolve conflicts between people, such as differences of opinion among senior leaders in your organization who have competing goals?
• Can you tell a compelling story about your company, so that the media will want to cover you?

What do you think? If you were set loose today, could you do all these things? More importantly, would you enjoy doing all these things?

What Makes An Entrepreneur Tick?

Wisdom straight from the founders’ mouths.

Julia Hartz, Eventbrite

Serial entrepreneurs are missing a chip in their brain that says, “This might not work out.” That chip is just not there. They don’t tend to see the ways in which something might fail. They only see possibility. It creates a sort of infectious optimism.

Therese Tucker, Blackline

I like to make decisions. I like to be in control of my own time and life. I don’t answer well to others. I’m confident. I feel like I have the best idea, and everybody should buy into it. It’s completely unfounded, of course, but it carries you through when nothing else does.

Sebastian Thrun, Udacity and Kittyhawk

I live to empower people. When you come across something as powerful as hundreds of thousands of people all around the world all of sudden being able to participate in the gift of great education, there is no way you can’t do it.

Josh James, Omniture And Domo

I remember being in my freshman year in college, and we’d go sit up on top of the mountain and look down over the valley and be like, “Someone’s got to be on top. Why not me?”

Melanie Perkins, CANVA

I really like thinking about the future. I love spending a lot of time imagining what the world would look like.

Fred Luddy, Servicenow

An entrepreneur is somebody who so passionately cares about solving a problem that they will disregard a large percentage of what otherwise might be their life. I’ve had my electricity shut off, I’ve been evicted, I’ve had my car repossessed—not because I didn’t have money but because I didn’t take the time to pay my bills. The bills would come in, and if the envelope wasn’t pink, I didn’t even think to write the check.

Contributed to Branding Strategy Insider by: Frederic Kerrest, excerpted from his book, Zero to IPO: Over $1 Trillion of Actionable Advice from the World’s Most Successful Entrepreneurs

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