The Creativity Principle

Creativity is a great thing – when it’s needed. And that’s the problem, sometimes we only get creative when we have to. And that’s often too late.

Take the example of raising investment funding for early-stage start-up companies. You start out in good times with a ground-breaking product idea that is going to change the world. You evanglise it, and hey presto – you’ve attracted a bunch of investors. The valuation is high, but the investors doesn’t seem to mind – after all, it’s good times and you’re onto a good thing.

But then, the world changes. Now you’re at the bottom of the economic curve and times have gotten tough. Guess what? New investors are laughing you off at the sheer audacity of your valuation proposal. Remember Murphy’s Law – the other queue is always shorter. There’s always another company who is MUCH further along than you are – AND has a better valuation. “Thanks, but no thanks. Next”.
So you cut a deal to stay alive – and the valuation is a fraction of your previous round – then you’re busy trying to keep your current investors happy….”hey, why didn’t I get the same deal?” There’s no way back. Now you’re in a recession, and investment funds have dried up and your cash burn rate has gone through the roof! Goodbye party time. Hello fight or flight.

OK, so you’re an entrepreneur, and all entrepreneurs fight, right? So, big nasty sabre-tooth tiger is at the entrance of your cave and your defensive instincts are kicking in. Nothing like a bit of adrenaline to keep you on your feet. The creative juices start flowing – and fast…with traditional sources of finance out of the window, you’re looking at innovative new ways to raise finance – crowdfunding, partnering with your clients, etc, etc. Ah, so you’re in bootstrapping mode all of a sudden huh? Hold on Mr. entrepreneur wise guy – you gave equity for a ridiculous valuation in the beginning and raised all this money that you probably didn’t even need. Dream On* Isn’t it a little late to start being creative?

The traditional venture capital model for early stage companies is dying – fast. Use this as an opportunity. Build half a product, with a few simple bells and whistles, then go get revenue. Stop spending time and investors’ money over-engineering a product that customers might not need. Forcing yourself to be creative in the beginning will bring 3 advantages: (i) it really WILL be your own company, (ii) you’ll spend less time chasing money and more time creating value, less time planning and justifying to investors and more time selling, and (iii) bootstrapping in this way will help you manage your finances a whole lot better.

A Tap On The Head

Everyone remembers his or her first car. Mine was a Renault 18 and I was in love with it. Forget the fact that it had over 100,000 miles when I bought it as a student, and it kept breaking down in the most inopportune moments. For me, that car was freedom and dreams.

Every now and again, a friend or associate will look at me, and with a glint in their eye, they say something like, “Oh Trevor, I would love to do what you do. I’d love to set up my own business”.  That’s the moment they paint freedom and dreams on their faces.

I have heard this sentence so many times now that I have become accustomed to counting the seconds before I hear the qualifying sentence. And it normally comes fast…”The problem is…I’m still waiting for an idea”.

Oh dammit! Here comes my Proustian moment. This is the sentence that makes me remember the love-hate relationship I had with my Renault 18 and the countless moments my dear symbol of freedom and dreams would simply decide to  throw a sparky on the spur of the moment – usually on some highway in the middle of nowhere.

But necessity being the mother of all invention, a short tap with an iron bar and a hammer to the starter motor and we were on our merry way again. You do this a couple of times, and you soon become quite the artist at getting the pistons going again.

I’m not exactly saying that we all need a short tap on the head every now and again to get the creative pistons going, but nothing riles me more than a sorry excuse for not doing something.

Opportunity is everywhere! You are in the thick of it. If you can’t see it, it’s because you are not frustrated enough with the way a good or service is being delivered. Get angry at the world from time to time. Do more than complain. Do it yourself. After all, there is usually nobody who can do it better than you, right? Think this way, the pistons will start firing, and the opportunities will start to flow. D.O.