While running a small business is very rewarding, it is not easy, yet more and more of us are being enticed into starting a business, encouraged by an increasingly supportive government, which promotes entrepreneurship at every opportunity. This is good news after all; as entrepreneurs innovate, we as consumers benefit as they produce products and services that better meet our needs. Governments benefit through a greater tax take and lower social welfare costs (as well as gaining from numerous other additional benefits arising from the effects of the ‘invisible hand’). Everyone is a winner.
A Key Challenge
However, on an individual basis, a key challenge for most entrepreneurs is dealing with the sheer range and diversity of issues that they have to address when all most want to do is simply, to sell. Their knowledge base must not only span their industry sector but must cover a breadth of functional topics and issues from marketing to cash-flow management to taxation.
While bigger companies will typically have access to this knowledge in-house, smaller businesses do not have that luxury and hence have to rely on their network as well as search engines, blogs, websites and business forums for answers and help.
One of the benefits of the growing ubiquity of social media is that information related to pretty much any subject area is available for free on the Internet, making it a lot easier to access than before. The quality of information that is available for free is significant and search costs are exceptionally low, resulting in unfettered access to solutions to your every business problem.
But all is not as straightforward as it seems. Information gleaned from these sources is not without its drawbacks, not least the fact that, for the most part, you do not know who you are gaining the knowledge from. (This was graphically illustrated in the famous Dilbert Cartoon – ‘On the Internet, nobody knows you’re a dog’).
Some of the following issues also apply:
- How can you assess the veracity of the information?
- How do you ensure the impartiality of the content?
- How do you take general advice and apply it to your own particular circumstances?
- What if you rely on information and then act on it to your detriment?
Firstly, taking information at ‘face value’ is rarely a good thing. Consider each bit of advice as a mere data point as you seek to gather information to make a decision. You should also seek out articles supported by facts with clear attribution to source data where you can substantiate claims.
Secondly, it is important to assess the nature of your inquiry, relative to the risks associated with the decision to be made. Information gleaned from a search engine or website is no substitute for ‘paid for’ advice when dealing with legal or taxation matters, for instance. While we have all become accustomed to using search engines for information searches, we must not lose sight of the fact that nurturing a wide network of contacts whom you can call for advice is a better use of your time than surfing the net for solutions to more complex issues.
It is also worth considering the context of the information. Is it on a commercial site where the author has a commercial agenda or is it on an informational site like Wikipedia where the content is curated by a number of contributors? Articles written on branded websites, with full author accreditation (and clear domain expertise), trump anonymous postings on poor-quality websites every time. However, you must remember that, unlike professional advice, there is generally no come back if you rely on erroneous information and you suffer damages as a result of acting on it.
As an entrepreneur you also have to constantly weigh up the costs of a decision and need to become comfortable dealing with incomplete information. As Venture Capitalist Mark Suster eloquently puts it:
“You are constantly faced with decisions and there is always incomplete information. This paralyzes most people. Not you. Entrepreneurs make fast decisions and move forward knowing that at best 70% of their decisions are going to be right. They move the ball forward every day. They are quick to spot their mistakes and correct. Good entrepreneurs can admit when their course of action was wrong and learn from it. Good entrepreneurs are wrong often. If you’re not then you’re not trying hard enough. Good entrepreneurs have a penchant for doing vs. over-analyzing. (Obviously don’t read this as zero analysis).”
Finally, it is worth remembering that general information is subject to cognitive biases, and accredited sources used in support of the arguments may be from wildly different contexts from the one in which you are attempting to apply your learnings.