Buckle your seatbelt.  Last week I wrote about how the entrepreneurial leader constantly operates out of his/her comfort zone.  This week I want to address what I would call the “erratic pulse” of entrepreneurial life.   The erratic nature of life is a result of a variety of influences.

Here’s a short list of things that create chaos for new and growing businesses:

• Technology
• Industry trends
• Consumer tastes
• Regulatory environment
• Economic health of the marketplace
• Competition
• Funding trends
• Personal issues of management team, such as life events, health, economic status

Riding in a Lincoln Town Car vs. a Jeep. Do these things impact large companies as well?  Of course; Both small and large companies travel on similar roads.  But in a big company setting there is a way to absorb the shock, to reach into a deeper pocket, to shift resources and people around to adapt.  In entrepreneurial ventures, the ups and downs happen without any shock springs.

That means the entrepreneur, and his whole entrepreneurial team, has a bumpy ride.  One that in which failure is frequently encountered, according to Jay Walker, founder of Priceline.com.  According to him, “You’re not going to fail once. You’re going to fail a lot. In fact, you are going to do much more failing than succeeding!”

It’s hard to prepare and manage a team when change and failure are encountered so often.  Employees often have trouble dealing with the ups and downs, so the leader has give confidence to the team even when they might not be feeling so upbeat.

Look at it this way, if you knew you be travelling at high speed along a road full of potholes and speedbumps, which ride would you pick?

I have spent this week getting ready for a course I am planning to teach in Innsbruck, Austria, at the MCI MANAGEMENT CENTER INNSBRUCK. The topic is “Leadership in an Entrepreneurial Setting.”

I started by asking myself the question, why is leadership any different for entrepreneurs?  Many corporate leaders navigate uncertain times and take their teams into settings involving risk, so is the entrepreneur so different?

After working on projects with large companies, I have to say that leadership in a startup context is quite different.  What I have observed is that in the case of big companies we work with, when problems arise, the leaders apply time and/or money.  Have to deal with a technology issue?  No problem – we’ll call our IT department.  Negotiating a contract? That will go to “legal.”  Expanding the scope of the project?  We’ll just pull a few more people from other projects onto our team.

In startups, leaders have to solve problems in a very different way, because you typically:

1. Have very little cash.
2. Have a lot of time pressure.

When you have no money, everyone on the team has to wear a lot of hats.  And most of them don’t fit very well.  For example, the startup management team (typically 2-3 people, perhaps not all fulltime) has to:

1. Create a vision and mission.
2. Make strategic decisions, operational decisions, tactical decisions.
3. Create a brand and a marketing and PR campaign.
4. Attend trade shows.
5. Do social networking to get visibility Raise money from investors.
6. Work with attorneys on business, including contracts, funding documents, non-disclosures, employment agreements,
7. Write grants.
8. Deliver against the grant.
9. Develop the product/service, including manufacturing, quality control
10. Develop relationships in the supply chain.
11. Put up a website and manage any IT aspects of the business.
12. Manage part time staff.
13. Monitor financial aspects of the business.
14. Build and manage the Advisory Board.
15. Create a supportive network to battle the isolation factor.
16. Sell!!!

So part 1 of my answer to why it is hard to lead in an entrepreneurial context:  An entrepreneurial leader is almost always doing something that is out of his/her comfort zone. As Sandeep Kumar mentions, it is “intellectually stimulating and yet exhausting…… financially …..but  worth every moment!

One more item:  I asked another talented entrepreneur if she thought the above list was complete.  She said I should add: figure out how to maintain work life balance or add “divorce documents” on to the list of things to discuss with the attorney!

I’ll admit it, I’m new to the area of Knowledge Management (KM).  During my sabbatic leave, I’ve been reading, books, articles, blogs and tweets about the field of Knowledge Management.  Phew!  It’s a big honking topic! I started trying to understand the scope of KM by examining the KMWorld’s list of “100 Companies that Matter in KM.”  I found the list of products and services of these companies to be so diverse as to be further confusing:  KM is document storage and retrieval, no it’s business intelligence, no, it’s legal services that search enterprise emails, but no, it’s really social networking….well, you get the picture.

Next I looked at the Wikipedia definition of KM:  “range of strategies and practices used in an organization to identify, create, represent, distribute, and enable adoption of insights and experiences.”  Now I was getting somewhere.

I have spent a dozen years, eliciting, taping, editing and serving up the insights and experiences of entrepreneurs and other business experts.  So eClips is all about KM for entrepreneurs. Most importantly, it enables me to take the one-to-one storytelling process that surfaces  tacit knowledge gained from experience and translate it to one-to-many.

The trick is to get entrepreneurs to reflect on what they have learned.  One of my favorite questions is “What has taken you by surprise?”  When answering that question, I often learn things that you will never see in an entrepreneurship textbook.  Here are three of my favorite examples of the tacit knowledge you can find in the eClips Collection:

Jessica Bibliowitz, President and CEO of National Financial Partners was surprised by human nature:

James McNair was surprised the difficulty of keeping teams together, even when successful:

Eric Young, Co-founder and General Partner, Canaan Partners, was surprised by how much hype impacts perceived value:

I just got back from the annual meeting of the National Consortium of Inventors and Innovators Alliance,  NCIIA .  This is my favorite professional meeting every year, because the participants are a wonderful mix of entrepreneurially-minded professors and student inventors (both grad and undergraduate).  Sessions are filled with crossovers between the languages of 1) science, engineering and technology and 2) business and entrepreneurship.  At times it is like listening to someone who speaks Portuguese talk with someone who speaks Spanish.  With effort, they can communicate, but there are some words that are just different!

I led a workshop called “Cash Flow is King – It’s all about the People” with Michael Lehman, Director of PantherlabWorks and Student Services at the University of Pittsburgh Institute for Entrepreneurial Excellence.  We were interested in talking with others about the challenges posed by working with students teams in teaching entrepreneurial courses and forming the “eTeams” that NCIIA supports with generous grants.   Here is the list of issues that we came up with when brainstorming:

Issues in Team formation:

• Difficult to get enough diversity in:
  • Personality types
  • Skill sets
  • Perspectives, life experiences, philosophies
  • Majors

Issues that are logistical:

• Scheduling issues for students with crowded schedules, responsibilities, activities
• Differences across the university in terms of requirements, courseload, etc.
• Working in virtual settings, across geographical boundaries

Issues related to the functioning of the team:

• Once you get the diversity (see dimensions above), getting diverse teams to work through conflicts
• Hard to find a member of the team willing to lead
• Some team members are unable to be flexible when dealing with uncertainty and have a lack of tolerance for ambiguity
• Differences motivation due to
  • Differences in entrepreneurial intention
  • Team members are at different life stages (Freshman vs. Senior vs. Grad)
• “Best buddy” syndrome – the mistake of forming a team solely due to friendships
• “Free rider” troubles – Getting team members to follow through and/or do their share of the work
• Difficulty of establishing trust quickly enough in the semester
• Creating good “rules of engagement.”
• Getting team members to keep their senses of humor
• “Facebook syndrome” – getting them to communicate more professionally

Issues related to working with/supporting teams

• Deciding whether to mandate teams or allow them to form
• Getting meaningful coaching
• Difficulty in evaluating team participation
• Making the transition from a student team to a real world team

The interesting thing to note is how many of the issues we identified as being problems for student teams also haunt real world teams.

After the conference I did an eClips interview with two real world entrepreneurs in a young startup I have been following for a few years.  The team just ejected the third member of the management team.  Why?  He was not aligned in terms of his motivation and life stage to carry his part of the burden.  After months of stress and anger over his free-riding and failure to follow through on his responsibilities, they mutually agreed to part ways. The three of them had been close friends since college, making the “divorce” painful, but miraculously, they emerged with the personal relationships intact.  That’s because from the beginning of their company, they created a constitution that laid out the values and rules of operation.

Others I’ve interviewed have not been so lucky.  I have heard about lost friendships, marriages, and even breaks between parents and children over team issues in entrepreneurial businesses.  I’m not including any videos today because, frankly, those emotional clips are typically not shared with the general public and I respect the privacy of my interviewees.  But I do want to broadcast the message nonetheless:   It’s all about the people.