Entrepreneur

Here’s my “Startup” column from the April 2015 issue of Christian Computing magazine.

Over the past couple of months, I’ve introduced the concept of a “startup” and we’ve discussed why the church should really care about startups.  As you’ll recall, we’ve developed this definition for our discussion: A startup is a new venture working to solve a problem where the solution is not obvious and success is not guaranteed. Starting this month, we’ll talk about the latest thinking on how to successfully launch a new startup.

The Old Model and Why It Changed

For the past dozen years, I’ve served as an executive for a large corporation.  I’ve worked with startups in various ways over those years, but my head hasn’t been completely “in the game” of entrepreneurship.  Over the past several months I’ve reimmersed myself in the startup community.  What I’ve found has been very refreshing and encouraging.

In the past, the generally accepted approach for starting a new business was to spend a few months developing a detailed business plan, raising all the funding needed to get the business off the ground, and then seeing if it worked.  One way this has been described is that startups were managed as if they were simply tiny versions of big businesses.

The general rule of thumb is that 9 out of 10 new businesses fail.  In the old model, if your business failed, you would have invested months of your time and significant amounts of money typically invested by family members, friends, and others.  This type of failure can be devastating and often makes a second attempt impossible.

This approach naturally constrained the number of new businesses that were even attempted.  Most successful small business owners continued to run their business just like big businesses and didn’t feel significant kinship with other “entrepreneurs.”  That started to change, somewhat, with the emergence of “rock star” entrepreneurs emerging from the computer revolution including Bill Gates and Steve Jobs.  However, it was the Internet revolution that fundamentally changed the nature of startups.

The New Model

With the emergence of the Internet, and follow-on capabilities, such as e-commerce, social networking, and cloud-based services, the upfront investment (in time and money) to launch a new business has been dramatically reduced.  Also, the Internet has ushered in new models for funding startups including Angel Investors and Crowd Funding (e.g. Kickstarter).

While I was quite aware of these changes, what I had missed was how these changes fundamentally altered how entrepreneurs launch new businesses.  I think the two most significant impacts have been the emergence of startup communities and the development of the Lean Startup methodology.

When I founded or co-founded my first two startups, I felt very much like a lone wolf.  Today, entrepreneurs are blessed with tremendous opportunities to network with other startup-minded people who help share the burden and provide encouragement along the way.  This community networking takes many forms from fairly informal meetup opportunities (like 1millioncups.com groups which meet in over 50 cities around the world), to short term opportunities to engage on new business ideas (like Startup Weekend) to extended support engagements including accelerators and incubators.  While most entrepreneurs, and therefore most startup community activities, won’t be focused on advancing the gospel, some (for example Praxis Labs) are emerging at the intersection of faith and entrepreneurism.

Seeing this level of community support for entrepreneurs has been incredibly encouraging to me, but the biggest change that I’ve noticed is in the process of launching a new business.  As I implied above, new technologies have made it easier to launch startups faster and with less upfront investment.  While this hasn’t necessarily changed the rule of thumb that 9 out of every 10 startups will fail, it does mean that startups can fail faster and less catastrophically.  It also means that many more entrepreneurs can take a shot at starting a new business, and can try and try again without crushing discouragement.

The Lean Startup methodology has emerged as the most accepted process for launching a new unproven business model.  In my simplified way of thinking about it, Lean Startup changes the model from emulating how big businesses operate to instead emulating how scientists discover and better understand the wonders of God’s creation.    In the Lean Startup methodology, the business model is viewed as a collection of hypothesis to be tested.  

While we, as founders, probably have a good basis for making a good guess at what customers want or how we can make money, it’s still a guess.  In the old model, we would take our collection of guesses (which we actually considered to be facts or truths), spend months doing as much old-fashioned research as we could to prove they were true, collect the “truths” and research into a 100-page business plan, and then try to convince investors to give us the money to implement this untested business model.  

In the Lean Startup methodology, we acknowledge each hypothesis and figure out how best to test and refine each one.  As with the scientific method, we iterate multiple times through a loop of hypothesis-test-observe-refine until we have great confidence that our hypothesis is true enough to go with.  In fact, even after we launch, we continue to test and refine to improve the business and to adapt to changes in the environment.  Testing may involve hitting the streets and talking to real customers and potential partners.  Instead of assuming what they want and need, we ask them and match that up with the value proposition we are building.  Testing may also involve launching an early prototype of the business and letting real customers use it to see if it really creates value for them in the way we imagined and to see if they really use it in the way that we thought they would.  Depending on the nature of your product, the Internet may make this easier and less expensive than you might imagine.

While this discussion has focused on business startups, I’m guessing that many readers see the old 100 page business plan approach at work in their churches and ministries, and I hope you are starting to see how the Lean Startup approach could be a better model.  Instead of spending months planning and gaining approvals and funding before you test, why don’t you start testing in small ways now?  Instead of waiting until everything is in place before you launch, why not launch a minimized version of what you’re envisioning now and see how the community starts to engage with it?

Of course, we know that “A man’s heart plans his way, But the Lord directs his steps.” (Proverbs 16:9) No matter what methodology we use, the most important thing we can do is to pray for God’s wisdom, direction, discernment, and blessing on our efforts.

With that as encouragement, I hope that this series will prove beneficial to you and that some will start to consider yourselves to be entrepreneurs who can pursue new ventures for the glory of God!

Titus 3:14 tells us “And let our people also learn to maintain good works, to meet urgent needs, that they may not be unfruitful.”  It is my hope and prayer that these articles will help you be fruitful to the glory of God.

Continuing on my “Startup” series, here’s my article from the March 2015 issue of Christian Computing.

Last month I started a new series titled “Startup.”  In that first column I defined what I mean by “a startup.” This month I’ll discuss why Christian Computing readers should really care about startups.  Starting next issue I’ll take a couple of months to discuss the latest thinking on how to successfully launch a startup.  After that we’ll consider specific Christian startups (within the church and outside the church), hopefully with meaningful application to your work.

Last month I talked through different aspects of the definition of a startup, but I didn’t provide a concise definition that we can use for our purposes in this series.  To correct that oversight, I’d like to use a slightly modified version of Neil Blumenthal’s definition: A startup is a new venture working to solve a problem where the solution is not obvious and success is not guaranteed.

Many people care about startups, and for good reason.  It has long been recognized that small businesses are the drivers of economic growth and job creation, but recent analysis has actually shown that “young” businesses (i.e. startups) create virtually all net new jobs in the United States.

Should Churches Care About Startups?

That’s an interesting statistic, and I guess that economic growth and job creation are important to churches for the secondary benefits that the church can enjoy.  But do startups have any direct impact on churches and the work of the church?  I would argue that the answer is “yes” and I can see strong evidence in the realities of our local churches, in the work of missionaries around the world, and in the church’s own “startup” activities.

According to a recent article in Christian Media Magazine, the number of bi-vocational ministers is approaching one-third of all ministers.  In some denominations, the numbers are much higher, with 75% of Baptist churches having fewer than 100 members, and 40% of ministers in the Nazarene Church being bi-vocational.  This fact has led the Nazarene Theological Seminary in Kansas City to add entrepreneurism to it’s curriculum.  The school has recently been certified to offer the Kauffman Foundation’s FastTrac NewVenture program.

“Many of our graduates are likely to find that they need to have a second source of income as they begin their ministry career,” shares Chet Decker, Dean of Administration and Student Services for Nazarene Theological Seminary.  “Their strong desire is to be able to have their second career as aligned as possible with their ministry focus.  Starting a business provides the freedom to do just that.”

There are two basic models for funding Gospel missionaries around the world.  The one that is most common and most visible to Americans is where the missionary is financially supported by others who feel called to participate in the ministry by praying for, encouraging, and providing funding for the work.  We see this model in the Bible (e.g. Philippians 4:14-15) and it still works today.

“Another model for fulfilling the Great Commission is the tentmaking model that the Apostle Paul exemplified,” asserts Jason Fisher.  Jason should know; he is a co-founder and CEO of Cornerstone Technologies International in Romania and a co-founder and investor in Highland Harvesters in Ethiopia.  He also recently completed his Masters of Divinity at Mid-America Baptist Theological Seminary in Memphis.  “Tentmakers can have a tremendous impact on the country where they serve.  As successful businessmen, they have credibility with the locals and often have access to the true leaders in the country.  God can use their business success to open many doors that are closed to other missionaries.”  For tentmakers like Jason, tentmaking is a term reserved for those using their business as a platform for taking the Gospel to the nations.  Often, but not always, this is a new business.

Finally, I think it’s important to recognize how many activities in the church today are actually startup activities.  A church plant is often referred to as a “startup” church for good reason.  It is a “new venture working to solve a problem (the need for a strong gospel presence in a specific location) where the solution is not obvious (how to reach that local community) and success is not guaranteed.”  Launching any new ministry will face many of the same challenges as launching a new business and the process lessons that have been learned around successfully launching startup businesses should not be ignored by the church.

“When we moved to Manhattan, Kansas, I had some ideas from others who had started new campus ministries, but there were a lot more unknowns than knowns,” shares Rev. Jon Dunning who has spent the past couple of years establishing a new Reformed University Fellowship ministry on the Kansas State University campus and helping plant a new PCA church in Manhattan. “We’re learning to see that we don’t know what we don’t know.  We’re taking the time to get to know the campus, it’s traditions, and patterns in order to serve effectively here.  What ‘works’ on one campus, in one part of the country doesn’t necessarily work everywhere.  The confidence we have is that this is God’s campus in His world, and He is at work.”

With that as encouragement, I hope that this series will prove beneficial to you and that you will see yourself as an entrepreneur pursuing new ventures for the glory of God!

Titus 3:14 tells us “And let our people also learn to maintain good works, to meet urgent needs, that they may not be unfruitful.”  It is my hope and prayer that these articles will help you be fruitful to the glory of God.

Last year I began a  new series for Christian Computing (now called MinistryTech) magazine on Startups.  Here I’ll share those articles for your benefit.  The series is continuing, so as new articles are published, I’ll post them here as well.

Over the past several months I’ve introduced the Intelligence Revolution.  This month, I’m moving on to a new series titled “Startup.”  My plan is to spend this month defining what I mean by “a startup;” next month I’ll discuss why Christian Computing readers should really care about startups; then I’ll take a couple of months to discuss the latest thinking on how to successfully launch a startup; and then we’ll consider specific Christian startups (within the church and outside the church), hopefully with meaningful application to your work.

What is a Startup?

There are many definitions of what a startup is.  Merriam-Webster.com has two definitions for the word “start-up” – “the act or an instance of setting in operation or motion” and “a fledgling business enterprise.”  Investopedia.com’s entry for Startup begins with a very pragmatic definition: “A company that is in the first stage of its operations.”  Personally, I like the definition that Warby Parker cofounder, Neil Blumenthal, provided to Forbes magazine “A startup is a company working to solve a problem where the solution is not obvious and success is not guaranteed.”  That definition is also similar to the one provided by Steve Blank, one of the architects of the Lean Startup methodology we’ll discuss in this series, when he said that a startup is a temporary organization in search of a repeatable and scalable business model.

All of these definitions imply two things:

1. A startup is a for-profit business.
2. At some point in time, a startup stops being a startup.

For purposes of this series, I’d like to broaden the definition a bit.  

First, I’d like to think beyond for-profit businesses.  Going back to Neil Blumenthal’s definition, I think there are many times when we find ourselves “working to solve a problem where the solution is not obvious and success is not guaranteed.”  Often this isn’t in a business context.  In fact, I would guess that many of us could use those words as a “job description” of sorts for the work we do with technology in ministry.

That being said, I don’t think we can completely ignore the economics that drive business decisions.  For most of us (if not all), we are always operating with limited budgets.  When we solve problems for our ministry, it is expected that the solution creates value.  That may or may not mean that more money comes into the ministry, but hopefully it means that the outcome of the solution is worth the resources we are investing in it.  If those resources would have been better spent doing something else, then our startup has not achieved success.

Second, I’d like to broaden the definition of startup to include new ventures by existing, well-established entities.  Admittedly, “well-established” often implies tradition-bound, slow-moving, and risk-averse.  I don’t intend to include all new ventures by existing organizations in the startup definition, but only those that are pursuing unknown solutions in an environment where uncertainty of success is embraced.  

When a church tries something they’ve never tried before, such as a cross-generational evangelistic outreach, we can approach it like a startup.  We don’t know all the answers.  We haven’t done this before so we don’t know exactly how to make it work.  In fact, we may even be confused about what will define success.

The definition of success is especially important to consider.  Too often, I fear, even in our churches we define success the way that corporate America does – how many people, how much income, how many programs.  As God told Samuel in 1 Samuel 16:7 “the Lord does not see as man sees; for man looks at the outward appearance, but the Lord looks at the heart.”  Pray for wisdom, to understand how God is defining success in your startup.  Be strong to avoid the temptation to act like the world acts and to seek what the world seeks.  Trust in the Lord and rejoice in the work He is doing in and through you.

Why I Care About Startups

I mentioned above that next month we’ll discuss why you should really care about startups.  But before we get too far, I thought it made sense to explain why I’m even starting this new series.  

From what God has shown me in my own life, I believe that, whether the business succeeds or fails (in the world’s business terms), startup experiences can help shape young men and women to be leaders in their churches, their families, and their careers. Tina Seelig, executive director of the Stanford Technology Ventures Program identifies the need for universities to produce what she calls “T-shaped people.”  “This means people with a great depth of knowledge in at least one discipline, like chemical engineering or biology, and a breadth of knowledge across many skills. Across the top of the T are knowledge of leadership, innovation and entrepreneurship.  It’s no longer good enough to be an individual contributor where you have a clearly defined role. You need to be able to work across disciplines.”  

Launching a startup stretches us beyond our comfort zone.  It forces us to consider all aspects of the venture, not just the parts where we are the expert.  Often, it forces us to recognize our complete reliance on God for everything.  When we combine the “T-shaped” model with a primary focus on glorifying God, maybe what we’re talking about are “cross-shaped” people.  

Titus 3:14 tells us “And let our people also learn to maintain good works, to meet urgent needs, that they may not be unfruitful.”  It is my hope and prayer that these articles will help you be fruitful to the glory of God.