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How To Think Like An Entrepreneur
By Michael B. Shane

The popular misconception is that entrepreneurs are strong-willed men and women of action. But the truth is that successful entrepreneurs are strong-willed men and women, first of thought, and then of action.

Their primary everyday action is thinking and relentlessly seeking information to enable them to continually give their customers, employees and suppliers what they need (require) and want (desire) and get what they need and want in return, thereby achieving the ultimate in fair play and fairness.

Information -- having it and knowing how to use it -- is the key to business strength. Information is the great equalizer. It has no bias -- not toward gender, race nor religion. In its simplest form, information is a single fact. It is anything you see, hear, read, touch, talk about, sniff, observe or question. It's also any idea. It can be a word, a symbol, number, color or comparison.

Information is the raw material for your thinking. Your mind gathers information with your five senses: smell, sight, hearing, taste and touch. Information is anything that enters your mind.

A continual flow of new information is the only way you keep a pulse on your business, set priorities, prepare for and anticipate the future. You think about it all, and use that information to make decisions and then take action.

No matter what business or industry you choose to become involved in, the absolute key to your success will be how well you handle information about the three fundamental areas of your business: management, marketing and money. Management, marketing and money are like the three legs of a stool. You can't sit on a stool if one of the legs is missing.

You need to understand what information is, what information you need, where to get it, and how to use it. Nothing is more important. From day one, you've got to have all the information about every aspect of your business, or you simply won't make it.

If you are going into your own business for the first time, prepare to go through a kind of human revolution as you stretch your mind and develop your skills, methods and experience at gathering and thinking about information. Thinking about it means questioning, sorting, analyzing, dissecting, interpreting, reflecting on, organizing and deciding upon staggering amounts of new information.

You will begin dealing with a much greater and more comprehensive scope of information than ever before. And you'll have to do it day after day, forever. It will become automatic, like brushing your teeth in the morning, except that you will do it all day, every day.

The better and faster you get at gathering and thinking about new information, the easier and more natural it will become. It's exercise for the mind; you'll learn to love it.


CONSTANT PROCESS

This simple but constant mental process of gathering and thinking about new information is the only way to become knowledgeable about your business. And it's the only way to stay knowledgeable.

Knowledge is information you can use. When you find information about management, marketing or money that you can use, a connection is made, knowledge is created. A light bulb suddenly turns on over the top of your head. It's like a kid playing the dot game who's connected enough dots to figure out the puzzle. Learning how to use different pieces of information is the nature of knowledge.

Knowledgeable decisions lead to success. They are the critical path to personal independence. So we return again to information, the source of knowledgeable and successful decisions.

Success is an ongoing process of successful decision-making. Every successful decision you make is a link in the chain of your prosperity. You have to constantIy make correct decisions. And your best way of doing that is to gather all the pertinent information and think about it before you make a decision. The more and better information you have, the greater your chances of making successful decisions.

Information is the fuel for successful decisions. It powers your judgement, your plans and your actions. Entrepreneurs have to go out and find their own fuel. But, happily, it's everywhere.

There is an abundance of information. Staggering amounts of research, statistics, reports and opinions are available from libraries, on-line databases and countless other places. But information is useless unless you know how to use it.

An entrepreneur uses information to start and run a successful business, and to get and keep its customers, employees and suppliers happy. The more information you've got, the more you can do. You need to know what is needed and wanted by your customers, employees and suppliers in order to be able to anticipate and provide these things.

To a successful entrepreneur, the highest order of information is that which can be used to make money and substituted for money.

Using information to make money can go to the very heart of your product or service. At a seminar one day, I learned that South Korea was going to be "the next Japan."

Since we were having problems getting enough computers to satisfy customer demand, it occurred to me that South Korea might be a good place to get computers made. We were already having Leading Edge computers made in Japan, but we contacted the seven or eight largest South Korean companies and found out that one of them, Daewoo, had an IBM-compatible prototype in research and development.


UNLIKELY PARTNERSHIP

Although it looked like a boxcar and weighed as much as a boat anchor, we decided to do business together anyway. We contributed the design input and all the features we knew from our experience that people wanted or would soon be wanting in this category of product.

That one piece of information about South Korea launched our most successful computer. You never know where you'll find that one piece of information that will lead to your great success.

A good entrepreneur always finds ways to substitute information for money. For example, we once wanted to open a branch office in New York City, but rents were very high and a long lease with six months to a full year's rent as a security deposit was normally required.

This represented more cash than we wanted to tie up or risk at that time. And we didn't know how much space we were ultimately going to need. Then we learned about a building in a perfect location with an entirely vacant floor. Moreover, its management was willing to rent it on a month-to-month basis, office by office, as we needed more space. This one piece of information allowed the entire venture to proceed with a minimum of cash, and to grow at its own pace.

Another example in which information substituted for money was with salespeople. When we started the Faded Glory Blue Jeans Company, our challenge was to accomplish effective national distribution without hiring a full-time sales force. When we started, it didn't make financial sense to hire and train an entire sales force. But the fashion nature of our products required instant national distribution or others could copy our ideas and capture the market before we did.

While digging around for a solution, we uncovered information about an informal countrywide network of manufacturers' representatives. They were experienced, already had a base of clients, and they worked on straight commissions. We didn't have to pay them until the merchandise was shipped.

As you can see, the faster you learn how to gather, think about and use information, the more knowledgeable your decisions will become, and the better your business will progress. It's known as cause and effect.