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Full Commercial Intent [Entrepreneurship
Posted on November 4, 2015 @ 10:12:00 AM by Paul Meagher

This year I decided it was time to figure out if I could apply for a mini-winery license. To get that license I need at least 2 acres of grape vines in production. I felt that perhaps next year I might be at that point so I called a local agronomist who agreed to come out and measure acreage by walking the perimeter of the vineyard plots and using a GPS-based app that would calculate acreage. The acreage came to 1.85 acres. Bummer. That means I have to plant some more and probably wait for them to grow for 2 years before I can apply for the license.

I blame this result on the fact that I haven't pursued this wine making venture with full commercial intent. I was just happy that my vines were growing and guesstimated that I had around 2 acres in the ground. If I was operating with full commercial intent I wouldn't leave such critical matters to guesswork. I should have been measuring what I had planted and making sure that my last major planting 2 years ago was sufficient to get me over the 2 acres that is required.

The same lack of commercial intent applies to renting out vacation accommodations at the farm. I didn't create any signage or branding and put in a lackluster marketing effort with Trip Advisor and AirBnB. I still got some rentals but it was definitely not at the level it could have been if I operated with full commercial intent.

In my defense the farm property was purchased with the idea of eventually retiring there so I didn't feel like I had to operate it with full commercial intent. This is common in alot of farming where most farm owners earn their main income from their jobs and not their farm property. However, this does not excuse the measurement screw up or mediocre performance on renting accommodations. If you expect to get results you have to operate with full commercial intent.

Sam Altman, founder of Y-Combinator, observed that many of the companies that go through their incubator program do well while they are there. The companies grow and there seems to be momentum, however, once they leave many of them flatline or lose momentum. He called this the Post-YC Slump. I call it operating without full commercial intent.

The peer environment is certainly a big factor in driving Y-Combinator startups to do well while in the incubator and the lack of it when they leave is one reason cited for the slump. Another major factor that Sam cites is engaging in more "fake work" when they leave the program.

In general, startups get distracted by fake work. Fake work is both easier and more fun than real work for many founders. Two particularly bad cases are raising money and getting personal press; we’ve seen many promising founders fall in love with one or (usually) both of these, which nearly always ends badly. But the list of fake work is long.

I tell founders to consider how directly a task relates to growing. Obviously, building and selling are the best. Things like hiring are also very high on the list—you will need to hire to sustain your growth rate at some point. Interviewing lots of lawyers has got to be near the bottom...

So how can startups avoid this slump? Work on real work. Stay focused on building a product your users love and hitting your growth targets. Try to have a board and peers who will make you hold yourself accountable—don’t lose the urgency that you developed... Keep sending updates on your traction to your investors and anyone else who will read them...Make the mistake of focusing too much on what matters most, not too little, and relentlessly protect your time from everything else. Don’t ever let yourself feel like you’ve won before you have. I still don’t think the Airbnb founders feel like they’ve won. You have to keep up a high level of intensity for many, many years.

I doubt that I can run my vineyard and vacation accomodations businesses with this level of intensity because there is not enough time in the day for me to do so. What time I do have, however, should involve more commercial intent than I've mustered to date. The Post-YC slump illustrates that operating with full commercial intent is not easy and that we tend to revert to doing things that appear to be productive but are really different forms of fake work. You would think that businesses are always operating with full commercial intent but often they are not, they are coasting or busy with fake work. For me the first step is recognizing the ways in ways in which I am failing to operate these lines of business with full commercial intent and prioritizing the work of fixing these issues (e.g., monitor acreage, install signage, setup official home-based winery area, line up a vineyard/accomodations worker for next season, etc..). The level of commercial intent has to be jacked up more than it has been to date if I want to get better financial returns for my effort. It won't just happen and fake work won't get me there.

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