OWL Magazine Korea

Mike Michalowitz “The Innovation Instinct: What do successful entrepreneurs focus on?”

The book “The Innovation Instinct” is a book about “business”. The original title is “The Toilet Entrepreneur”, which can be translated as “The Toilet Entrepreneur”. This is a book written by a foreign author named “Mike Michalowicz” and translated into Korean.

“How to make billions after failing in business and spending your last $20,000 on soju”

The subtitle of the book is “How to make billions by spending your last 20,000 won on soju”, which is an interesting subtitle.

The content of this book is “business”. The book is about what a “successful entrepreneur” focuses on, among other things.

This book is not a book that deals with theoretical contents about business as a whole, like a general business management book, but a book that talks to “real businessmen” who are engaged in business themselves. Or it can be said that it is a book for prospective businessmen who are not yet active as businessmen, but will soon become businessmen.

“To succeed, you have to believe that you can succeed.”

“This book is not for ordinary people,” he says at the beginning. It is aimed at “people with an entrepreneurial mindset who want to succeed and have the will to succeed,” according to the author. So, before we get into the nitty-gritty, the author suggests that we throw away all unnecessary excuses and have “faith”.

To succeed, we have to believe that we can succeed. The most important thing to do before starting anything is to “get your mind right,” he says. The first thing you need is “unwavering conviction,” he says. That’s why the book also talks about how to maintain “positive success beliefs.”

  • Instead of jealousy, praise those who are successful and try to emulate them!
  • If you have a good idea, share it with people who are worth sharing it with so that you can create synergy!
  • The worst failure is not even trying!
  • Believe that it’s possible, not impossible!
  • Be clear about your values and decide what you want to do and how you want to do it!

“Act now!”

The constant mantra in the book is “take action”. We spend a lot of time in prison thinking about things, but not a lot of time taking action. I emphasize this in this book. I wonder if we’re in a situation where we’re not “trying” because we’re making excuses or feeling insecure.

“What do innovative entrepreneurs focus on?”

This is what innovative entrepreneurs focus on. What to do and how to do it is the most essential part of business. Throughout the book, the author makes the same point: successful entrepreneurs focus on the following principles

  • “Less is more!”
  • “Simplify, but not too much.” by Albert Einstein
  • “Focus on the little things to get the big things!”
  • You can either be a jack of all trades or a master of none!”

“Three areas of innovation: quality, price, and convenience”

Picking a specific business scope and focusing on it is one of the rules of being an innovative entrepreneur. The book also points out three areas of innovation. These are the three areas of “quality, price, and convenience”. The idea is that if you choose the three areas well, define your “target audience” correctly, and innovate, you’ll be successful.

“You must discover your strengths.”

Sun Tzu’s Art of War introduces an immutable truth. “Know your enemy and know yourself, fight 100 battles and win 100 times.” It’s important to know your enemy, but it’s also important to know yourself.

Applied to business, if you have a clear understanding of your customers, market conditions, and yourself, you are bound to succeed.

In the end, we need to know ourselves well, especially our strengths. In the book, it describes how to discover your strengths.

  1. What are some things you do with happy anticipation? If you consistently enjoy doing something, it may be one of your strengths.
  2. What are the things you put off until the last minute? If there’s something you repeatedly avoid, it’s likely one of your weaknesses.
  3. In what areas do you gain knowledge easily? If you understand something easily, it may be one of your strengths.
  4. In what areas do you struggle? It’s very possible that it’s one of your weaknesses.
  5. In what activities do you get satisfaction, a sense of being worthwhile, or a good feeling? Those activities are your strengths.
  6. What is your instinctive approach when you are faced with a scroll of tissues with only three words on it? Do you joke your way out of the situation, try to do something with unexpected resources, scream for help, jump in the bathtub, or just “let it happen” and get up and walk away? The way you handle a crisis is one of your strengths.

“Business plans are pointless. “Three documents are enough for a business plan.”

The author says that spending a lot of time writing a business plan is pointless. This is because things rarely go according to plan and you often have to adapt and react to situations along the way.

That’s why, rather than writing a business plan, it’s said that you only need to prepare three documents to move your business forward, and they are

  1. A prosperity plan: it’s important to capture the values you want to live by and live for.
  2. A quarterly plan
  3. Daily metrics

“The Law of Execution: P = 40-70”

As a book that emphasizes execution and action, it even introduces the “Law of Action”. “P” is the probability of success, and “40-70” is the amount of information. The idea is that it’s too late to wait for the amount of information to reach 100%, but when you have accumulated 40-70%, it’s time to take action.

The author also introduces the five behaviors necessary for success, as shown below.

“5 actions required for success”

  1. Decide what you want.
  2. Build a belief that opens up possibilities
  3. Pay attention and focus to your goals.
  4. Take the most obvious action to achieve your goal. 4.
  5. Align your behaviors with your goals and monitor your progress.

“About the budget…”

One of the most important things a business needs is a budget. Ironically, however, the book says that “budget” is not that important. Everything can be done without money, and businesses can be successful without money, as in the McDonald’s example.

“Kyle McDonald traded a red paper clip for a house”

A guy named Kyle McDonald posted on an internet site asking if anyone wanted to trade a “red paperclip” for something, and then he traded the paperclip for something else. He traded one thing for another, and then another, and another, and another, and another, until finally he was able to buy a house.

In the end, he was able to trade in his red paperclip for a house because he “acted” and not just imagined or daydreamed about it, which is almost impossible to do in reality.

“Keep your cash in a Profit First Account (PFA).”

He talks about “cash” as something important, like blood in the body. Once the business starts to take off, he says it’s important to put this blood-like cash to good use. My recommendation is to keep about 5% of your profits in a PFA account. He says it’s important to start with a PFA account that you can’t easily access and that doesn’t overwhelm your company’s operations, and then gradually increase the percentage.

The money in this PFA account can then be reinvested in a “profitable” business, he says.

“When to get angel investors and venture capitalists?”

Once your business is established, you may want to consider seeking investment from angel investors or venture capitalists.

Angel investors are individual investors who provide financial and managerial support to ventures that have the technology but lack the capital, while venture capitalists are investors who invest in early-stage ventures with high potential and risk.

It’s not a good idea to take money from these investors right from the start, he says. After a business has grown to a certain point, taking an investment can help it scale, the authors say, and the right time to do so is when the business has $1 billion in revenue for angel investors and $10 billion in revenue for venture capitalists.

Throughout the book, I felt like I was being given a “challenge”. I got the feeling that only those who challenge their fears and common sense can achieve success. Deciding what you want to focus on will help you get started and feel like you’re on the path to success. And, perhaps most important of all, “can-do” and “action” based on that belief.

“The Toilet Entrepreneur: What do successful entrepreneurs focus on?”