Blog: Mindset — The Need for Proper Perception Part 2

Mindset: the proper mix of perception, perspective and priority

In start-ups perception based on Internet data, rare successful Internet and app companies and just plain hearsay can lead a company astray.  In reviewing business models and business plans, I can come up with several of the most often misunderstood perceptions that need to be overcome in the founder/entrepreneur thinking. 

Number 1 – “My start up revenue will be based on Advertising”
There is no doubt that many successful Internet service companies are successful because of the advertising but paid advertising doesn’t happen until the start-up has a good base of people to attract the advertisers. 

Number 2 – “If I have a great web page everyone will come”
Long ago, in the high tech world, engineers believed if they built a better product people would come for it.  This might have work with early adopters but for a company to grow it took marketing skill. Well even with a great web page how will people know about it without skill to drive people to it? 

Number 3 – “Banks will loan me money when I need it”
One of the biggest reasons for a start-up to fail is because of poor cash management and the lack of outside cash to fund growth.  Banks are not risk takers and most often want to see some stability in a company before making a loan. 

Number 4 – “My software friend can design my app in a few weeks
It is turning out, coding for apps, can be very difficult and some software design engineers out of school for over ten years might have a problem with the new languages.  Crash classes for teaching coding for today's products are springing up all over the country. 

Number 5 – "Much of marketing is based on perception"
If true, as I believe all the numbers in the world, and you can get them from today’s Internet, will not totally help as I have never been able to get perception from numbers alone. That is why validation of the new product requires getting in front of potential customers.

The worst example of poor perception of the employees created by management I've seen in my career was a case where it was alleged that bricks (literally!) were shipped in boxes instead of disk drives. Only a badly directed management signal to the troops, “Revenue must be met at all costs,” could have possibly caused such an irrational action!  The pressure came from the Chairman of the Board who never said ship bricks if necessary, but the employees” perception put too much emphasis on the need to show something was shipped.  He wasn’t even around when the shipments were made, but he did end up in jail because he was accountable for the results.

Planning, priorities, perspective, and perception add up to focus, a key to a successful start-up. Making a company work depends directly on the definition and implementation of priorities, and meaningful priorities depend on sound planning, accurate perceptions, and ensuring that all personnel involved have the proper perspective. Often, to deal effectively with employees (or customers, for that matter); you must realize that you have to deal with their perception no matter what the facts are.

I was president of the company that had seven divisions and seven general managers to work for me directly. We also had several foreign companies and numerous offices around the world. I came to realize to the general managers would feed issues, strategies and updates to their people in seven different ways. As result this created many different perceptions for the people with what the company was all about. To overcome this I decided to start a company newsletter that had a president’s letter to be sure everyone in the world heard what was important. I went a step further making a monthly video to distribute around the world.

I always like the expression, “Know Thy Audience” to be sure a wrong perception will be harmful.