4 Failure Points that Can Undermine Your Business – Failure Point 1: Follow Your Passion at Your Peril
The ideal formula for business success is when your passion and distinctive competence align. Only nine months after opening my first business, USI – a business based on my distinctive competence – I launched a second business called Sigma Communications Inc., or Sigma for short. Starting Sigma was the culmination of my long-standing passion to create a vehicle to more efficiently connect buyers and sellers of commercial real estate. The first product I envisioned was a high-quality commercial real estate magazine listing properties for sale, lease, and sublease. (I undertook this venture at a time when the Internet was not yet widely available for commercial use.)
The Birth of Sigma Communications
Sigma’s main purpose was to provide essential real estate information to the financial officers and real estate executives of the largest 5,000 companies in the United States through a single source. We set out to publish a high-quality, quarterly magazine, The National Register of Commercial Real Estate, to share ideas for dealing with surplus real estate and to efficiently link real estate buyers and sellers through the magazine’s centerpiece, The Commercial Property Exchange. The Exchange would list surplus commercial property that was for sale, for lease, or for sublease.
When we started Sigma Communications, we thought we had all the pieces, but we were wrong.
Passion vs. Distinctive Competence
When I launched Sigma, I believed that my passion for publishing the magazine would trump my lack of competence. That proved to be a costly assumption. The hardest lesson I learned from the Sigma experience is that a venture filled with passion is not enough. You will substantially increase your probability of startup success if you build a business based on your distinctive competence. Distinctive competence is your success record of relevant experience, applicable skills, and practical knowledge that you bring to your business.
Following only your passion can lead you to make decisions fueled by fervor for your business idea instead of the knowledge and insight that comes with road-tested experience. I learned this firsthand. I lacked the experience that I believe any new venture requires in its founder. I truly knew nothing about being a publisher. And my strong passion for becoming a publisher did not make up for that void.
Failure Point #1: Starting a business based on passion alone, rather than building a business based on distinctive competence.
About the Author
Ed “Skip” McLaughlin is the founder of four businesses and is currently running Blue Sunsets LLC, a real estate and angel investment firm. He bootstrapped his first business, United Systems Integrators (USI) Corporation, a corporate real estate outsourcing firm, and grew it into an Inc. 500 company. In 2001, Ed earned Entrepreneur of the Year honors from Ernst & Young. In 2005, he sold USI to Johnson Controls, a Fortune 100 company, and at that point, became CEO of JCI’s Global Workplace Business for the Americas. A member of the Board of Governors for Tufts Medical Center, Ed founded its David E. Wazer Breast Cancer Research Fund. He graduated from the College of the Holy Cross, where he is a member of the Board of Trustees. Active in philanthropy, Ed lives with his wife in Connecticut and has three adult children. Contact Ed at [email protected] or connect with him on Twitter @purposeisprofit.
Wyn Lydecker is the founder of Upstart Business Planning, where she works with entrepreneurs to develop plans that answer the questions investors ask most often. Previously, she was Managing Director of Business Plans International in New York and Co-Director of the Small Business Resource Center at Norwalk Community College. Wyn has an MBA in finance and marketing from the Wharton School of the University of Pennsylvania and a BA in economics from the University of California at Santa Barbara. She serves on the board of a local nonprofit she helped found, At Home In Darien. She lives in Connecticut with her husband and has two adult children. Contact Wyn at [email protected] or connect with her on Twitter @upstartwyn.
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