At CCAW, to expand our distribution, we partnered with companies that had underutilized warehouse infrastructure and wanted to optimize it to get a better return on their investment. Using other companies’ warehouses, we could add a new distribution point in a matter of days, so we scaled our distribution network rapidly and could reach any consumer’s home in one or two days. With technology, we overcame lots of logistical challenges, which I I won’t get into. I still love this concept. I think it’s applicable in many other areas.

I learned about a company planning to build a national restaurant brand using this approach. No more building out locations or franchising. This brand hopes to leverage, through technology, existing restaurant infrastructure that’s not fully utilized. I’m not sure if it will work, but I like the thought process.

Some companies have become big winners by solving problems for customers using others’ underutilized assets. For example, Uber and Lyft got their start when their founders noticed how many cars on the highway had only one occupant (i.e., lots of empty seats). I think that technology will accelerate this trend. We will see more companies leveraging existing assets and building large businesses in the process.

If you’re a founder looking to solve a problem but don’t have the assets, consider using some else’s.

A close friend and entrepreneur keeps an idea list. It’s a running lists of things he’s interested in building that could become his next company. Whenever he has a new idea, he adds it to the list. We went over a few of his ideas recently. As he explained what he wanted to build, I found myself repeatedly asking what problem he was trying to solve. Then we’d talk about whether what he envisioned building would solve the problem.

I kept an idea list for many years, as do many other founders. I thought it would lead to the new business that I wanted to create at some point. It never did, and I discontinued the list. After the exchange with my friend, I realized I’d approached things all wrong. My ideas were essentially solutions. If I thought the world needed an XYZ and people would pay for it, I added it to my list. But I had no idea what the world needed and what people were willing to pay for.

In hindsight, I realize that I should have been capturing problems that I thought people would pay to have solved (and that I was qualified to solve). Doesn’t sound like a big difference, but it is. By capturing solutions, I was trying to convince others to see the world my way. I should have been capturing problems—trying to understand people’s problems so I could build a solution that created value others were willing to pay for.

Many people take a solution approach to entrepreneurship, and it can be a mental trap. You can be in the vicinity of a huge entrepreneurial opportunity (i.e., problem) but give up because the solution you envision doesn’t resonate with people. Focusing on the problem is better—it’s more likely to lead you to a solution people are willing to pay for (i.e., a big business). Neither approach is easy and neither guarantees success, but looking for problems to solve increases your chances.

An interesting dynamic is playing out in the labor market right now. For many reasons (which I won’t get into), some businesses, such as restaurants, are having trouble hiring enough staff to meet customer demand. Some of them aren’t succeeding. Some are even having to reduce operating hours (or close entirely some days) so they don’t overwork and burn out the staff they do have.

These business owners are looking for ways to meet customer demand. Their traditional method of throwing manpower at the problem isn’t viable, so they’re open to new solutions. I think this staffing challenge will lead to accelerated adoption of technology in these industries. Technology can’t do everything a person can, so it won’t make the problem disappear. But it can make processes more efficient and allow businesses to do more with less. Their increased bandwidth can help them meet customer demand.

The current labor market has created a great opportunity for founders to build big businesses. Big markets are experiencing extremely painful problems, and decision-makers are in search of solutions to them. This is a dream scenario for an entrepreneur with the right background to solve these problems!

I watched the highlights of the Brooklyn Nets vs. Milwaukee Bucks NBA playoff game last night. The series was tied, with both teams having won three games. This was the final game of the seven-game series. Whoever won would move to the next round. The stakes were high and both teams showed up for a thrilling game.

Kevin Durant is an NBA superstar, and it showed last night. He had 48 of the Nets’ 111 points. With his team down two late in the fourth quarter, he made a difficult contested shot with one second on the clock in an attempt to win this fight for his team. He was trying for a three-pointer, but his foot was on the line so the shot counted for two points. The score was tied and the game went to overtime. If his foot had been back a half inch, the shot would have sealed the win for the Nets. Instead, the Bucks went on to win the game and the series in OT. The Nets’ season and championship hopes ended.

Kevin did all he could and pushed himself to the limit to win last night. He played every minute of the game. He gave it his all until the clock read double zero for the second time and the game was over. Unfortunately, it just wasn’t enough.

Startups are hard, and sometimes founders come up short even when they give it everything they’ve got. It sucks, but that’s life. I think Kevin’s play last night was a great example for founders. Show up and give it your all till the end. Hopefully it’ll turn out great and you’ll win. If not, you’ll have the peace of knowing you did all you could.

I’ve spoken to a few entrepreneurs over the last six months who are beginning new chapters. Some have sold companies; others have put management teams in place to run day-to-day operations. They’re all shifting their focus from their companies to something new. I’ve enjoyed these conversations and have noticed a few consistent things:

• Transitions – When you end one chapter to begin a new one, you enter a period of transition. Some transitions are longer than others. Some are painful, while others are painless. But everyone will go through a transition period. Talking to people as you transition is helpful.
• Giving back – Most of these founders have had a level of success and want to give back. They want to help other entrepreneurs navigate the journey they’ve just finished. They realize they were successful because of others.
• Uncertainty – The direction to go in for the new thing isn’t crystal clear, which introduces uncertainty. After running a company for many years, this can be somewhat uncomfortable.
• Identity – Founder’s identities are often tied closely to their companies. In fact, often the company is their identity. When founders separate from their company, they’re often forced to think through and establish a new identity.
• Time – Building and running a company takes a lot of time. When founders separate from their company, they may find themselves with much more discretionary time than they’re used to. They’re able to be more present and do things they couldn’t before. Time becomes very top of mind.

The last year has caused lots of people to reevaluate lots of things. It’s interesting to hear entrepreneurs discuss their new chapters—and I don’t think they’re alone. This year— 2021—will be the year people think about new beginnings, and 2022 may be the year of change. I’m looking forward to seeing what happens and what new things people take on.

I listened to a founder discuss the dynamics of his company recently. He raised capital and the business is growing aggressively. He’s adding to the team and giving more responsibility to legacy team members. There’s more hierarchy (a good thing) but also more politics, which the founder hates. Decision-making has slowed, and receiving individual credit is prioritized over teamwork. They’re playing the Game of Thrones.

I haven’t worked in a large organization in many years, but I remember that when I did, the politics were apparent. I didn’t like navigating that environment. It felt like a popularity contest. I ended up leaving for a variety of reasons (not just that), but the experience stuck with me. When I started my company, I wanted to avoid politics. I think we accomplished that.

Culture is a key ingredient in success. I think this founder is right to be concerned about office politics eroding the culture of his company. I hope he can get his team thinking with a “we” mindset again.

Early founders often lead the sales efforts at their companies. It makes sense. They typically understand the problem and solution better than other team members. Resources are limited, so the founder picks up a lot of the slack. When the founders land early customers, it’s a cause for celebration, and rightly so.

Before the celebration, though, stop and think.  With so much going on, the team can let mission-critical tasks slip, which can deeply harm the company.

Today I spoke with a founder who onboarded his first customer recently. His company’s a service business, so he had to hire staff and train them to meet the customer’s expectations. A little over a month in, they’ve hit a serious hurdle. The customer hasn’t paid as promised. The startup has been paying the team but hasn’t received any revenue from the customer. Translation: the company is losing money because of this customer. Investigation has revealed that the customer never signed an agreement. The company can’t raise capital from investors or banks because it can’t prove it has a customer. The startup is in a difficult financial situation and has no leverage with this customer.  

Things fall through the cracks all the time at early-stage companies. It’s part of the chaos of startup life. Unfortunately, some of them can sink the company. If you’re an early-stage founder, make sure you have agreed-upon terms in writing (or better yet, payment) before celebrating or incurring expenses for new customers.

Growing up, my first summer job was with a homebuilder. This was in south Louisiana, so it was often in the mid 90s with 100 percent humidity. The days were long and the work was hard. I’d leave around 6 a.m. and get home around 7 p.m., exhausted. I was in middle school and got paid $125 a week. Doesn’t seem like much now, but I was ecstatic. (Opportunities were limited—I was too young to work legally.)

That experience was pivotal, and I learned a lot. Some cool woodworking skills. That I’m deathly afraid of heights (and that looking down when I’m on a scaffold will make me freeze up). The power of teamwork and the value of a dollar. To not cut corners and to do things the right way the first time. For the first time, I noticed that entrepreneurs are different. Spending most of my time alongside the owner of the company, I took note of how he saw the world differently and made decisions differently than everyone else.

Today I connected with that owner. He’s at the tail end of a successful career but still works (albeit at a slower pace) because he enjoys what he does. He’s passionate about his work, and it shows. That job shaped me, and I’m not sure where I’d be without it. Proximity to success matters; it can have a big impact. I’m thankful that he took a chance on me and gave me my first opportunity to observe entrepreneurship up close.

I had a good chat with a friend about work styles. She used to work a consistent pace, which, since she’s a high achiever, meant she was giving 110% every workday. The eventual result? Burnout. She experimented for a while and eventually landed on a new approach that she refers to as “bursts.” She works hard for a set period (a week, month, or quarter). Then she works at a slower pace for the same amount of time. The result is that she operates at a high level overall but avoids burnout by recharging.

I enjoyed learning about my friend’s approach to working. It’s interesting to hear what helps others be productive and able to stay the course. From personal experience, I know it’s important for people to understand what they need to avoid burnout.

A few months back, I shared my experience in the realm of pricing and target customers. I learned over the years that all customers aren’t good customers. Today, a conversation with a good friend who’s a solopreneur reminded me of this topic. After running his business for years, he now has more customers than he can handle.

He explained how he identified the type of work he excels at and enjoys. He noticed that customers who’ve been loyal customers for years share certain characteristics. When he meets potential new customers, he doesn’t try to sell to them. In fact, he looks for reasons to decline the work. He asks questions to determine if the work is in his sweet spot and these people are likely to do business with him for a long time.

It was very interesting to hear him describe his process. It reminded me of what I learned at CCAW. Understanding precisely who the target customer is can be an important milestone. It allows a company to focus its resources on the right customers and build a strong business around a loyal customer base.