The True Job of The Entrepreneur

What is the actual job of the entrepreneur? I asked 5 successful ones who mostly agreed that: The entrepreneur’s job is to make the company successful, no matter what.


Inspiring? For sure. Useful? Not really.


The following definition is not inspiring, but is much more useful:


The entrepreneur is the company mechanic.


This mundane definition changed how I view entrepreneurship. It helped me make sense of my past failures. It gave me a framework and better mindset for dealing with my company’s biggest challenges. It made me a better entrepreneur. So yea, It is pretty useful.


Why a mechanic? A mechanic is a person who repairs and maintains a machine. This analogy is useful for 3 reasons.

  • Viewing a company as a machine designed to achieve some goals can reveal how it works

  • Realizing that this machine perpetually fails implies that the most important thing is to repair and maintain it

  • Breaking down the fixing process into a simple framework can help any entrepreneur understand what they ought to be doing

Many of the ideas here are taken from the fantastic Principles by Ray Dalio. So go Ray.


Ready to become a great company mechanic? The first step is understanding the machine.


Company Mechanics


What is a company?


A company is a machine designed to achieve some goals (or more broadly a vision). This Machine is made of people and culture and the combination of the two drives anything the company will ever produce.


The key insights about this machine is that it will perpetually fall behind its goals. When this happens the machine has a problem, and needs some fixing or upgrading.


So while we think of company success in this way:



Success is reality is this:



Dalio refers to the latter as looping. Some refer to it as the startup rollercoaster.

Each loop is caused by a problem that inhibits your company from achieving its goals.


This is the single insight I would tell my younger self: A company is a machine that perpetually goes through loops of painful problems that demand fixing. Or per Winston Churchill: Success Is Going from Failure to Failure Without Losing Your Enthusiasm.


Problem Loops and Their Nature


Here’s what a single problem loop looks like, taken from Principles.

In words:

  • Your company has some goals

  • You start falling behind these goals, which indicates a problem

  • You diagnose the problem

  • You design a solution for this problem

  • You do what the solution indicates and get back on track

Looping is the process of going through this problem/solution process over and over and over again, without losing your enthusiasm.


Each loop is a big yet terrifying opportunity. It’s an opportunity to fix the problem and make your company better, or an opportunity for your company to get off track and continue crashing. Your actions determine if it’s the former or the latter.


Here’s what the mechanic ought to be doing.


5 Steps of Company Mechanics


Your job as the company mechanic is to go through these problem loops as quickly and effectively as possible.


We can break this down into a 5 step process:

  1. Set goals as problem detectors

  2. Identify the next loop early

  3. Diagnose the problem objectively

  4. Design effective fixes

  5. Implement the fix ruthlessly

Your strength as a mechanic, and the success of your company, is equal to the weakest link. For example, if you’re too slow to identify the next loop, your whole company will adapt too slowly and eventually fail.


Now the question we’re all here for is…


How to be a Great Company Mechanic


I use 5 principles to go through problem loops quickly and effectively.

  • Embrace the mechanic role. Accept that the next loop is coming, face the problems as terrifying as they are, and get enthusiastic about solving those problems

  • Push hard for speed. The rate of going through loops is the biggest bottleneck for a company. Every extra day you spend inside the loop is another day that your company is operating sub-optimally. It is possible to go through problem loops 10 times faster when it is your top priority

  • Be open minded in steps 1 (setting goals), 3 (diagnosing the problem), and 4 (designing solutions). The biggest risk for these steps is failing to uncover the objective truth

  • Be ruthless and hands-on in steps 2 (Identifying the next loop), and 5 (executing on a focused solution). The biggest risk for these steps is mediocre, slow, or null execution

  • Don't skip, mix, or change the order of any of the 5 steps. Each is essential and requires unique treatment with full attention

Every major failure in my company (there are enough for statistical significance) can ultimately be mapped to me not living by these principles, in turn allowing a problem to damage the machine disproportionately.


The Company Mechanic Handbook


A company mechanic is only as effective as he or she is at each of the 5 steps. This handbook zooms into each step with principles for doing it effectively.


I recommend using this handbook as a reference rather than a one-time read.


1. Setting goals as problem detectors


The worst state of being is not knowing that you have a problem – things get worse every day and you can’t do anything about it. You must design your goals to detect problems.


Principles

  • Think of goals as a tool to track the health and progress of your business. If you use goals for anything else, such as pushing your team, then the goals won’t be effective at problem detection

  • Define goals that are as specific and meaningful to your business and situation as possible. Every business can have a revenue goal, challenge yourself to define it such that it really captures how, what for, and why your customers are paying you

  • Prefer goals that respond fast (leading indicators)

Our story


The main activity customers use our product for is to run procurement projects. The northstar goal we set for our company is the number of projects per customer. I.e grow the number of quarterly projects per customer from X to Y.


This was a good problem detector because we knew that individual projects are successful and deliver a meaningful value. The main challenge was expanding customer engagement to get more projects.


But this goal was not ideal for two reasons. First, we measured the raw number of projects which doesn’t take into account how many projects in total the customer has. Second, we measured the projects upon completion which took 3-6 months and therefore delayed problem detection by the same amount.


By applying the principles, we now use a better goal: Grow the percentage of projects each customer creates from x% to y%.


This goal would tell us much more about the actual engagement of our customers, and way earlier.


This is not a small difference, we’ve lost a lot of time and initially reacted incorrectly to the problem because of bad problem detection.


I wish past me was as smart as I am.


2. Identifying the next loop early


The key challenge here is to identify early. Both because you’re an optimistic entrepreneur and because the initial data is limited, so you’re gonna tell stories to yourself.


Every extra day inside the loop is another day that your company is not functioning optimally and is falling farther behind its goals.


Principles

  • Mindset first. Remember that this is exactly your job and that the next loop is already upon you. I find this mindset absolutely critical. You must embrace and enjoy finding problems by seeing them as opportunities to strengthen your business

  • Use the goals that you’ve set as an indicator. The moment you start falling behind, take a pause and dedicate your attention. Don’t just live with it or explain it away

  • Build time for yourself and for your team to identify problems. Most of anyone's time is spent zoomed into the day-to-day where we can’t see the full picture, putting a structure that forces you to zoom out is critical

Our story


One morning we noticed that we’re starting to fall behind our northstar project goal. Then we explained it away instead of really acknowledging it. This happened because:

  • I didn’t have the right mindset. Instead of being ruthless, I told myself that everything is going great and we just need to push through the hump (very rarely true)

  • We didn’t pause to zoom out and discuss. Culturally we’ve gotten comfortable with falling behind our goals. It’s fine and inevitable to fall behind your goals, it is a sin to be comfortable with it

Once the trajectory was clearly off we acknowledged the problem and went to diagnose it.


3. Diagnosing the problem objectively


This is typically the toughest intellectual step. Einstein was not completely off saying: “If I had an hour to solve a problem I'd spend 55 minutes thinking about the problem and 5 minutes thinking about solutions.”


Principles

  • Don’t skip this step. We tend to guess what the problem is intuitively, and this intuition is often wrong. Instead, take time to analyze the situation and delay your intuition for later

  • Don’t discuss solutions yet. Be strict about this, problem and solution should be two air-tight steps

  • Collect perspectives from the relevant people. Your starting point is always an incompletely biased perspective

Our story


Once we acknowledged our problem with projects we’ve done the diagnosis pretty well. I remember believing that the problem was execution, but the input from the team convinced me that our land-and-expand strategy is inherently ineffective with our customers. We had enough evidence that one project success (land) does not lead to more projects easily (expand).


If I insisted on my initial intuition without considering more perspectives, we would’ve spent a lot of time refining a land-and-expand strategy which was inherently bad.


4. Designing effective fixes


Designing effective fixes is easier than it seems, and is a lot of fun. But only when you apply the right process:

  • Finish the diagnosis step. Write down the problem statement in one bolded sentence

  • Brainstorm solutions. You can find enough material online about effective brainstorms. I personally like to:

  • Start with an energizing warm-up activity

  • Put a well articulated problem statement front and center

  • Have a moderator enforce a “yes, and” vibe instead of “no, because” one

  • Set the goal to generate as many solutions as possible and 10 as a minimum

  • No solution analysis or prioritization in this session

  • Be methodological about picking the best approach and opinionated about making it super focused and specific

Our story


Our solution to the project growth problem was to change the strategy. Stop giving away our platform for one project and instead sell to the relevant decision-makers who can mandate our product as a solution for the whole organization.


The one hiccup was that I didn’t push for a focused solution. We continued with both strategies for a while and didn’t define this solution clearly. This is exactly where your input can make a huge difference by pushing for clarity and focus.


5. Implementing the fix ruthlessly


Every organization and every employee has momentum. If you are implementing a fix for your biggest problem, you can’t let that momentum slow you down.


Principles:

  • Remember that any extra day you spend inside the loop is another day that your company is operating sub-optimally. Remind yourself and your team that every day counts

  • Ask or make a simple plan with focus on

  • When we get started

  • What’s most important to get started on

  • What do we stop doing to make this a priority

  • Find a useful and agreed upon way for yourself to be involved. This way you can influence and stay informed while being useful instead of annoying

Our story


This step is always hard for me because I try to trust people and give them autonomy to work. I found that this mindset is bad when it comes to the company's most critical problem. In this case I ended up not knowing enough about the implementation, meaning that instead of being helpful I mainly asked annoying questions to stay informed.


What could I have done differently? Joining sales calls to hear how prospects respond to our new approach and help handling objections would have kept me more informed and more useful.


Fortunately our sales leader did a great job implementing the fix.


Conclusion


The role of the entrepreneur can be defined in many inspiring ways, but a useful definition is that the entrepreneur is the company mechanic.


This definition is useful because it reflects reality:

  • The entrepreneurs’ purpose is to ensure that the company is successful

  • A company is a machine that is designed to achieve some goals

  • The nature of the machine it that it will perpetually fall behind it’s goals due to problems

  • Therefore, the entrepreneur job is to constantly fix and improve the machine

The strength of the entrepreneur can be measured by their ability to effectively and quickly fix the machine. This fixing process has 5 steps:

  • Set goals as problem detectors

  • Identify the next loop early

  • Diagnose the problem objectively

  • Design effective fixes

  • Implement the fix ruthlessly

Want to become a great company mechanic? Embrace the mechanic role, push hard for speed, be open minded when it comes to steps 1, 3, and 4, yet ruthless when it comes to steps 2, and 5. Finally, don't skip, mix, or change the order of the 5 steps.


Because the entrepreneur is only as effective as she is at each of the 5 steps, I’ve shared a little handbook with principles for doing each step effectively.


There is no greatness without deep understanding. I hope that this article helps you understand your true job as an entrepreneur. Deeply.