About two years ago, Oprah Winfrey launched a new television network in partnership with Discovery Communications, called OWN. I like the name of this network. From an entrepreneurial standpoint, going out on your own means taking full ownership of everything that goes right, plus everything that goes wrong.
So what can startup entrepreneurs learn from OWN's first months in business? Here are five teachable moments to help you startup and persevere with confidence.
1. Moonlighting creates madness. It's ok to plan a startup while employed by another company. However, it's not ever wise to initiate customer facing operations without 100% leadership attention and focus. Little problems easily morph into big, costly problems when the top decision maker isn't on hand to make timely adjustments.
Oprah has stated publicly that she regrets launching OWN while the Oprah Winfrey Show was still on the air. Her big ah ha moment reflects the simple truth that one jockey can't ride two horses at the same time. It's simply too easy to fall and too hard to win.
2. Brand consistency matters. After watching OWN's first few months on air, viewers who were passionate about the Oprah brand of self-respect and personal enrichment say they were confused. OWN wasn't Oprah. Actually, OWN's celebrity filled reality programming looked more like competing network Oxygen or E's True Hollywood Story. There was nothing empowering about watching Tatum O'Neil's childish spats with her father or Duchess of York Sarah Ferguson recounting her self-inflicted financial and personal mishaps.
When first customers don't know what a startup's product or service really stands for, they won't come back. Even worse, they might share their disappointment with their friends. If OWN is to succeed it has to create a brand identity and programming that is perfectly aligned with Oprah or entirely separate from Oprah.
3. Spend like a startup. Startups close when they run out of cash or run out of investors who are willing to fund bloated operations. I bet in the early days of Oprah's Harpo Productions, Inc. first class travel, expensive meals, employee bonuses and indulgent office digs were a reward for profitable financial performance, not a necessity.
When startups spend money on nice-to-haves before attaining key milestones of financial sustainability, they needlessly increase operating losses, business uncertainty and employee finger pointing. It's a toxic environment that takes away all of the joy of collaborative business building.
OWN has already announced significant spending cuts. That's a good start to improving the chance of startup survival. Still I wonder, has OWN cut out all the nice-to-haves and engaged people who thrive in a bare bones startup business environment? Have you in your new business?
4. Adversity is not failure. OWN is too early in the business development cycle to be called a failure. It's normal for nimble startups to test and adapt first ideas to audience feedback. Some concepts work; others don't. The point is to learn from first missteps and continue to search for the sweet spot where a new business can operate in a sustainable way.
It's also completely expected that all startups will face their share of unexpected problems. Customers don't commit as fast as planned, investors and partners back out of funding deals, websites crash, employees quit, and of course, nervous competitors float negative rumors about the new market entrant. All of this is part of the early life of a startup.
Will OWN ultimately succeed? The odds are good that Oprah has what it takes to succeed as a serial entrepreneur. In my classes, I like to point out that unlike just about every other entrepreneur on the Forbes list of 400 wealthiest Americans, Oprah didn't have any help from venture capital funds and the public financing markets to propel her first company's growth.
Oprah built Harpo and her fortune the old fashioned way – she funded growth through savvy business deals and cautious cash flow management. Would the founders of Google, Microsoft, Starbucks, Facebook, or Amazon.com be as rich as they are today without early investment capital? It's hard to say, but their ramp up would not have been as swift.
Oprah should get a lot more credit in business schools and entrepreneurial education incubators for her skill in making something big and influential out of her own operating resources. Maybe that's the bigger lesson of OWN 2.0. More riches and satisfying rewards come to entrepreneurs who face adversity by digging down deeper to discover their own entrepreneurial magic. You can too.
Susan Schreter is a 20-year veteran of the venture finance community and entrepreneurship educator. Her work is dedicated to improving startup longevity in rural, urban and suburban America. She is the founder of www.takecommand.org, a community service organization that offers the largest centralized database of startup and small business funding sources in the U.S. Follow Susan on Twitter @TakeCommand.