Category Archives: Arts Entrepreneurship Theory

Risk, Reward, and Being Wrong Yet Again

Last week, in another class, we started a short unit on social entrepreneurship.  As part of the lecture, our professor had us all take a short test to gauge whether we were suited to be entrepreneurs.  Now that I’ve had almost an entire semester of learning about entrepreneurship, both by reading and discussing the theory and by actually starting something, I was pretty sure I knew what sort of questions would be on this quiz, and what my results would be.  To revisit one of my former blog posts, I am now very used to being wrong.

We have been focusing on starting something from nothing, using the lean launchpad and putting together a minimum viable product.  This quiz, based on a tool used by Northwestern Mutual to evaluate loans for new ventures, and this lecture were much more firmly in the standard entrepreneurial world where you need a bunch of start up capital before you do anything.

Some of the questions were about your personality, basic behaviors and preferences both in childhood and now (Were you always a good student, do you like to work in groups).  Some were about finance, are you willing to ask your friends and family for money?  Are you willing to ask other people for money?  And one series of questions that set another student on his ear: questions about being adventurous or risk adverse.  Surprisingly, the answer that got you points toward an entrepreneurial personality was being risk adverse.  The other student, who has launched a nonprofit that operates in Tanzania, felt strongly that entrepreneurs are comfortable with risk, they just go in with their eyes wide open knowing they may fail.  This mirrors some of the theory we have learned, especially in our Effectual Entrepreneurship text.  I agree with my classmate.  Entrepreneurship is about awareness of risk, deciding that the risk is worth the potential reward.  We work to minimize the risk in a number of ways, including the process of “getting out of the building” and making sure our product was actually something people want, and would pay money for.  We decide how much of our own, or other people’s, money we are willing to risk, to lose, before giving up.  We do things in small parts, so we can make changes and pivot as things work or don’t work or become something new entirely.  We keep our eyes wide open, open to change, to opportunity, to failure, and to risk.

I ended up being one of four people in a 25ish person class that scored as an entrepreneur.  I would never have used that word to describe myself before SAM, and still use the term uncertainly.  I feel like I am a better manager than entrepreneur, but that a good manager has a bit of an entrepreneurial mindset.  We always need to keep our eyes open, and be willing to change things that aren’t working.  This class, this process, have taught me how to do that.

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Love It, Hate It

So, since we have last directly discussed our venture, some important decisions have been made.  We have settled on an art market with the wares made by student artists around the Phoenix valley, on a weekend afternoon.  This past week, we have been practicing and testing our pitch, an approximately 1 minute message targeted at each customer segment about the event, and one version for student artists to get them interested in selling their work.  We have also begun thinking about and testing names of our art market, aside from what we have been calling it: the Student Art Market.

I’ve been getting pretty universally positive feedback about our pitches, with some helpful tweaks and points that need more emphasis.  The name is a totally different story.  We have a list of about 15 names, I have been testing my favorite 7 out after the pitch.  And I’ve been getting some pretty strong reactions.

One the surface, these two men fit into pretty similar demographics: they are both in their early to mid twenties, they are both graduate students and self identify as artists (though not the kind that will be selling at our event).  They are both into graphic novels, have relocated from colder climates, and totally want to support other student artists.  They both had similar feedback about the pitch: emphasize the local.  And they had strong, contradictory opinions about any variation of Parking Lot Market (such as Student Parking Lot Market, Parking Lot Art Market, Tempe Parking Lot Market).

The first picked the Parking Lot Market out of our list of potential names as his favorite.  He thought it implied something unique, special and different.  He thought it made it feel space specific and local.  He thought it stood out from the other names, and that it would stand out from the rest of the arts and crafts fairs happening in the area.

The second loved 9th & Ash Art Market, but HATED anything with Parking Lot in it.  He said that parking lot ruins the warm, local feeling you get from the pitch, and the idea in general.  He thought that parking lot made it seem like everything else everywhere else, and sort of corporate.  He did like the work market, though, because it links our event to other local things (like farmers markets, supporting something we learned in our first few rounds of getting out of the building).

So.  What do you do when there are two strong, opposite feelings about your product?  Luckily we have a whole list of other name possibilities and a whole bunch of other people we have talked to to help guide us.  One thing is clear, though: I am getting used to being wrong.  Like my other hypotheses throughout this process, neither of these men liked my favorite name at all.

If I Build it, Will They Come?

My goal throughout my graduate courses is always to embrace new discoveries that will help my business to thrive. As the Artistic Director of an independent theatre company, I’m finding important lessons every week as we build this new venture together. Brelby Theatre Company is close to wrapping up its sixth season of production, and I can’t help but wonder where we would be if I’d understood the importance of getting out of the building.

We spent the first few years producing shows that we wanted to see. We assumed that our tastes were universal, or that the fact that we were creating art at all was what mattered. Linda might refer to this as the “Field of Dreams” complex aka just because you build it doesn’t mean they will come.

We’ve had to learn the hard way that not all shows will resonate with audiences. Not all shows will even draw in an audience. Some of the productions that we’re the most proud of have had a low turnout, some for obvious marketability reasons. Our 2014 production of Beckah Brunstetter’s Be a Good Little Widow was a challenging sell, but I was confident that our audiences wanted to see some more challenging dramatic pieces.

When choosing the next season, I decided to survey our audience beforehand. Had I done so before our current season, I would have known that our audience overwhelmingly favors light hearted comedies and musicals.

We’ve been working for the last year to get our classes to take off in our community, to little avail. I decided that it was time to implement some audience surveying in more aspects of our organization. Reaching out to our artists and our fan base for feedback on what they would like to see, instead of just guessing provided us with some great insight about how to move forward with this initiative. Surprise, surprise. They wanted to see a lot of things that we aren’t currently offering.

I think it’s time for a pivot.

You Can’t Do a Show for an Audience You Don’t Know

In one of my other classes, we have spent the past month or so developing the framework for a new work.  In my group, we are adapting the bestselling book The One and Only Ivan by Katherine Applegate.  We have a designated director, costume designer, lighting designer, media designer, and two “managers” (members of the Arts Entrepreneurship and Management MFA program).  The very first week, we identified a target audience of families with children ages 7-12.  And then the director moved forward with his concept, the designers built the world of the show, the managers assembled the budget and tour schedule and a marketing plan all without thinking much about our audience ever again.

I was working on this project at the same time as I was “getting out of the building” for this entrepreneurship class, and I couldn’t help wishing I could take my group out for the same sort of research, talking to the people we think our product is for, testing our hypotheses.   We were building up this rich world of our story, without ever talking to the people that this story was for.  We didn’t talk to kids ages 7-12 to find out what they want to see on stage, we didn’t talk to their parents about what they think is important in educational entertainment.

As I was writing the marketing plan, I realized that I was just making a whole lot of untested guesses.  Guesses about who this was for, about what the people with the purchasing power want, about how to reach these people.  My entire marketing plan was one giant guess, based on my very first hypotheses.  I thought about our very first guesses about our arts venture, and how much we have pivoted our thinking in just two rounds of getting out of the building and talking to people.  Just this weekend, two of the hypotheses that I had absolute faith in were not only proven incorrect, but were unanimously proven incorrect.  In light of this entrepreneurship process, these guesses make me feel like this misguided marketing director:

If we had taken even five or ten minutes to really think about, and then talk about as a group, what our potential audience behaves in their daily life, how they think and feel, what they see and hear, what they say and do, we may have kept our audience as the driver of our artistic creation, rather than as an afterthought.  If we had taken this empathy map out, and tested our guesses by talking to kids, their parents, and their school administrators and teachers, we may have created a very different world for this story to live in, and I may have tried to bring this story to them in a very different way.

My goal is to be a successful artist…or, rather, make it possible for an arts organization or individual artists to be successful, and make a living doing it.  In order to be successful, I have to create (or ensure that the artists create) work that audiences really want.  I have to figure out what will bring new audiences to this art.  The best way to figure this out is not by making guesses sitting safely in my office, and testing those guesses once the product is complete and large quantities of time and money have been spent.  If our goal is to connect with a larger audience, then we must be testing our initial guesses by talking to people, talking to our current audience, and people we think are our potential audience, and then refining our guesses and talking to people again.  This idea of getting out of the building, of empathy mapping, should not just apply to creating a new venture, but trying something new (like an organization presenting a piece of work for the first time), or even just trying to expand a current audience.

The Band-Aid Approach

Class began with our pitch. It was an enthusiastic beginning where we pointed out the successes of last week’s ideation process. Behind us as we spoke was a large poster of the Business Model Canvas filled with yellow sticky notes of venture ideas. My contribution to the pitch was pointing out the cohesive strength of the group. Partnerships provide many benefits through networking and goods, but have the potential for disaster if there is dishonesty or lack of commitment. As a collective, we decided on full consensus for our venture as part of our doability criteria. The class mission for the day was to judge our venture ideas against our criteria and get rid of the sticky notes that don’t meet the criteria. Steve Blank teaches a class on Udacity called, “How to Build a Startup.” He says the best way to take the class is to actually be creating a startup while taking the class. This is exactly what we as a class are experiencing, and I came to find out that it hurts! I have been anxiously awaiting our brainstorming and ideation process. As I mentioned above, we all left enthusiastic about the results. The next thing that I know, a fast-paced “call and response” ensues as our potential ventures are judged and ripped from the large canvas. I was so surprised at how quickly I had become attached to the ideas and wanted to pursue them all! Each time a yellow sticky note was taken from the board I second-guessed the decision. Earlier in class, we had discussed something that was coined as “founders disease”, which is when a founder or visionary is inflexible to change or to deviation from the original idea regardless of the customer response or input from partners. After one week, I was already experiencing founders disease for our potential ventures and trying to twist them every which way to fit our criteria. I realized that this process is invaluable because it will keep us focused on the potential customer. This is exactly what we want so that the potential customer becomes a customer. I felt like the process we went through was like ripping off a band-aid. It stung, but keeping things in motion and always being open for change will bring the best results.

“Where does this ‘entrepreneurship’ come from?”

In one of Steve Martin’s Saturday Night Live skits he and his wife are struggling with debt, and receive some helpful tips from a financial advisor. This advisor promotes his “unique new program” called, ‘Don’t Buy Stuff You Cannot Afford.’ Steve Martin is totally perplexed by this approach. At one point the advisor talks about saving up money for things you want to buy and Steve asks “Where would you get this ‘saved’ money?” I relate with Steve in this scenario as I begin the semester. I came to class with the question, “Where does this entrepreneurship come from?” Unlike the short book offered to Steve to answer his dilemma, Linda has provided us with many lengthy readings that cover topics of theories, definitions and approaches surrounding entrepreneurship. Class meetings have involved discussion about these ideas to provide clarity and understanding along with group cohesion. That last part is very important since it is the five of us who will be doing this venture together. At times I feel like the audience member watching the SNL skit thinking, “Of course, that is obvious! That makes perfect sense.” At other times I feel like Steve Martin, totally perplexed and unsure. Thankfully, the class structure allows for all of these ebbs and flows of emotion as we make our way toward effectual entrepreneurship.

This week’s reading had us dive into the first seventy pages of “Effectual Entrepreneurship.” Some of the topics covered were found opportunities versus made opportunities and control versus risk. The idea behind found opportunities is that research gained from historical information will provide the entrepreneur with the greatest chance of success. When you find the largest unserved population within a market, that is when the venture begins. Steve Martin complains that he has tried debt consolidation companies and has even taken out loans to pay off his debt, but still finds himself in debt. This relates to the found opportunities approach in that the historically prescribed way cannot predict what the consumer will actually do. In Steve’s case, getting loans was not helping him change his destructive spending habits. When an entrepreneur approaches the venture with the idea that opportunities are made, the market is not always clear and time and interactions are what prove to bring out the best ideas. In this case, the entrepreneur will take self-inventory – using current resources in creative combinations with the ideas and assets of others creates the venture. This seems like a more risky approach. Therefore, the entrepreneur must create control. To expound on this idea, Linda lead us through a short activity. We were each given a 3×5 card and a black Sharpie. On one side of the card we were to write five things we can control, and on the other side we were to write five things we cannot control. Try it! It was more difficult than I imagined. In regards to my professional endeavors it brought clarification to my priorities and values.

Five things I can control:

  1. Whether or not I fix a mistake
  2. How I use my time
  3. How I care for my body
  4. Whether I accept or reject a given opportunity
  5. My personal investment

Five things I cannot control:

  1. Injury
  2. Fatigue
  3. The commitment and integrity of others
  4. The response of the audience
  5. Future offers

After sharing these in class we were able to brainstorm ways of creating control for what I deemed uncontrollable. We were figuring out ways of changing uncertainty to predictability. Steve Martin’s wife asked the financial advisor, “If I have the money, can I buy something?” to which the advisor responded, “Yes!” As a group we will inventory who we are and who we know. We will decide the maximum we are willing to lose and the minimum we are willing to gain. We are going to reduce the risk by making success happen rather than avoiding failure. This process will become more clear as we begin doing it. Next class is when we start our brainstorming. This is where we begin our process of making ideas and discovering effectual entrepreneurship.

You Gotta Use What You Got

“Sticking very closely to who you are, what you know, and who you know not only tells you what to do, it is also very useful in telling you what not to do.” [1]

     I’d say the above advice heeds well in many life situations, such as taking an unfamiliar job or going on a blind date. This isn’t to say we shouldn’t take risks and maybe go out with someone who isn’t our type, per say; but having an acute sense of self-awareness can serve us well. Maybe it’s just me, but the times I’ve dated someone whose fundamental beliefs were not in line with mine never ended well. I pride myself in being a fairly self-aware person, and although a little red flag was waving around in my gut, I just didn’t listen. So that didn’t end well. Anyone else? Just me? Okay, moving past the dating metaphor: understand who you are and, to quote the rarely produced musical, The Life: “Remember to use whatcha got to get everything you want.”[2]

     Chapter 6 of Effectual Entrepreneurship stresses the importance of being means-driven versus goals-driven, an idea that perhaps hadn’t occurred to me previously. I love making personal goals for myself, maybe even thrive on it, but as this chapter explains, the problem is goals don’t inspire us to take action right now. As I read the chapter, I realized my to-do list is what makes me take action, not necessarily my lofty goals for where I’d like to be after graduation in 2 years. When I write these to-do lists, I’m being means-driven, or understanding what I can and cannot accomplish and just going for it. After all, I know I can clean the bathroom today and I know exactly how to go about accomplishing that; I’m not sure the first step towards publishing my plays and having them produced to wild, international success (uhh…). Goals can be lofty and scary. If we as entrepreneurs are means-driven, we will not wait for a blockbuster idea, or thousands of start-up cash to begin the venture; rather, we will be inspired to take action because we have a clear idea of where to begin.

So how do we know what our means are? In class on Wednesday, we worked on understanding who we are, what we know and who we know, which will add up to what we have, or the resources with which to work. First, we ranked our top five values from a list of 30+, including honesty, faith, humor, health, integrity, passion, success, work, wealth and so on. Writing our values on post-its, they were then stuck to the wall for everyone to check out. There were some definite overlaps, like humor and integrity/honesty, which is a good sign, I’d say.

photo

As we worked our way through the chart, scribbling down our passions and hobbies and ruminating over our knowledge bases and professional networks, there was a fair amount of overlap. We are all about the same age, all studying for Master of Fine Arts degrees at the same school, so performance skills, theatre production skills and the names of faculty at ASU popped up again and again. Nevertheless, as working artists, we do have a wide network of connections across the state, and I am extremely excited to see which resources we can leverage as we begin our business venture.

Our yellow post-its will continue to be used tomorrow when we begin the ideation process. I look forward to challenging myself to remain means-driven over goals-driven and keeping in mind who I am, what I know and who I know in order to understand what I have to contribute to the group.

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[1] Read, S., Sarasvathy, S., Dew, N., Wiltbank, R., Ohlsson, A-V. (2011) Effectual Entrepreneurship. New York: Routledge.

[2] Use What You Got Lyrics. http://www.metrolyrics.com/use-what-you-got-lyrics-a.html.