Soul Shelter

Ever wondered whether or not you are an “entrepreneurial type” of person?

It would seem easy enough to find out: The Internet is rife with quizzes promising to assess your “entrepreneur-ability” in terms of personality, skills, experience, and background.

But watch out! Many such tests are nonsense. They’re based on folk wisdom, and lack any basis in rigorous research.

So here’s a reliable true/false quiz to test whether you are an entrepreneurial “type.” I adapted these questions from a comprehensive new study of entrepreneurship completed earlier this year by Professor Scott A. Shane (on which more later). In this quiz, “entrepreneur” is defined as someone starting a new business of any kind:

1. Entrepreneurs share similar psychological profiles, such as being leaders, risk-takers, or adventurous

2. Most entrepreneurs are under 40 years of age

3. Among entrepreneurs, people with strong networking skills outnumber “lone wolfs”

4. College-educated people are less likely to become entrepreneurs

5. The desire to make money is the most common reason why people become entrepreneurs

6. Working for someone else decreases the chances that a person will become an entrepreneur

7. Immigrants are more likely than non-immigrants to become entrepreneurs

8. Most entrepreneurs work in technology, software, and other high growth sectors rather than in mature industries

Ready for the answers? Easy enough: All the statements are false.

Here are details:

1. People who become entrepreneurs generally share similar psychological profiles such as being leaders, risk-takers, adventurous, or adventurous
False: As a group, entrepreneurs show no consistent or characteristic psychological profiles. For every study concluding that entrepreneurs are adventurous risk-takers, another finds they are timid risk-avoiders.

2. Most entrepreneurs are under 40 years of age
False: More than 60% of business owners and more than 54% of self-employed workers in the U.S. are 45 years old or older.

3. Among entrepreneurs, people with strong networking skills outnumber “lone wolfs”
False: Compared to salaried employees, entrepreneurs have fewer mentors and get less help from other people.

4. College-educated people are less likely to become entrepreneurs
False: College education (though not necessarily graduation) is more common among entrepreneurs.

5. The desire to make money is the most common reason why people become entrepreneurs
False: The most common reason for becoming an entrepreneur is the wish to avoid working for others. In fact, most entrepreneurs earn less than they would in comparable salaried jobs.

6. Working for someone else decreases the chances that a person will become an entrepreneur
False: Experience as a salaried employee increases the probability that someone will become an entrepreneur.

7. Immigrants are more likely than non-immigrants to become entrepreneurs
False: Immigrants are no more likely than their non-immigrant compatriots to start their own businesses.

8. Most entrepreneurs work in technology, software, and other high growth sectors rather than in mature industries
False: Worldwide, the overwhelming majority of entrepreneurs work in mature, mundane industries such as food service and insurance. Relatively few entrepreneurs work in innovative or high-growth sectors.

Here’s the bottom line: If you’re an over-40, married, college-educated white male with ten years experience in a mature industry, you’re the most likely entrepreneurial “type.”

Pretty uninspiring, huh? Well, the reality behind received wisdom often is.

The key to understanding these surprising facts lives in remembering that Professor Shane’s definition of “entrepreneur” includes all self-employed people. It’s a fair definition, but one heavily skewed toward sole proprietorships: one-person, undifferentiated, work-at-home enterprises without employees, started on a shoestring, in mature, low-growth industries (not biotechnology or software), managed by a principal without ambition (or plans) to expand. It is these tiny enterprises—not the Googles of the world—that account for 80% of all new businesses.

The good news is that these facts say nothing about the vast individual differences between people, or your particular aptitude or appetite for entrepreneurship.

Remember, this is all based on plain, boring demographics that happen to add up to a counterintuitive profile of entrepreneurs. I compiled this quiz from an extremely readable book by Professor Shane entitled The Illusions of Entrepreneurship: The Costly Myths That Entrepreneurs, Investors, and Policy Makers Live By.

Here’s my takeaway: Forget the Web quizzes. Read my Entrepreneurship Primer, sit down with a double espresso, and start planning your own entrepreneurial venture—regardless of your profile.

(This essay first appeared as a guest post at Get Rich Slowly)

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“The Surprising Truth About Why People Become Entrepreneurs”

“Entrepreneurship: A Primer”

“In Praise of Salaried Employment”

“Making Money: The Right and Wrong Questions to Ask“

Why do most people become entrepreneurs?

Maybe they seek to satisfy their souls by pursuing their lifework. Maybe they long to create lasting organizations that will change the world, or better a community. Maybe it’s part of a grand pursuit to understand reality.

Or does the decision result from a flash of inspiration into an unmet market need? The ambition to solve a gnawing workplace problem? Involvement with technical breakthroughs unappreciated by employers?

Do aspiring entrepreneurs yearn for wealth? For fame? Are they psychologically driven to embrace risk? To lead others?

Maybe the reasons are more prosaic: a corporate layoff, the desire to exercise new skills, a pressing need to make more money.

None of these scenarios, as it turns out, underpin the single reason why most people become entrepreneurs.

According to a comprehensive study of entrepreneurship published earlier this year by Scott A. Shane, a professor at Case Western Reserve University, most people start businesses in order to avoid working for others. Writes Shane:

The real reason that most people start businesses, however, has nothing to do with wanting to make money, to become famous, to better their own communities, to seek adventure, or even to improve the world. Most people start businesses simply because they just don’t like working for someone else.

Shane’s study, entitled The Illusions of Entrepreneurship: The Costly Myths That Entrepreneurs, Investors, and Policy Makers Live By, contains surprising findings that contradict almost every bit of entrepreneurship folk wisdom you’ll encounter online. The results are compiled in an extremely readable book of the same title.

Lay readers will certainly find Shane’s conclusions counterintuitive. Everyone knows that great entrepreneurs invent marvelous technologies, create heretofore unimagined markets, launch heroic quests to do social good.

The key to understanding Shane’s findings lies in his definition of entrepreneur: anyone who starts a new business.

That’s a definition I agree with. But it’s at odds with popular perception, because most people think of new businesses as high-tech, high growth companies.

Nothing could be further from the truth. The vast majority of new businesses are sole proprietorships: one-person, undifferentiated, work-at-home enterprises without employees, started on a shoestring, in mature, low-growth industries (not biotechnology or software), managed by a principal without ambition (or plans) to expand. It is these tiny enterprises—not the Googles of the world—that account for 80% or more of all new businesses.

Few of Shane’s findings will surprise those who’ve formally studied entrepreneurship. But I admit that for me, it was an eye opener to see “don’t like working for someone else” as Reason Number One for starting a business.

The hard-hitting facts of Illusions, though, should only encourage aspiring entrepreneurs. The world needs more genuine characters, more original souls determined to trod their own path, and no other.

More power to those who strike out on their own—damn the odds, and whatever the reason.

You may also enjoy:

“Entrepreneurship: A Primer”

“In Praise of Salaried Employment”

“Making Money: The Right and Wrong Questions to Ask“

Looking across the living room of his expansive flat in Hong Kong’s tony Victoria Peak neighborhood, Peter Hamilton spoke in the calm, slightly world-weary voice of a man who will never again worry about earning a living.

“The ones who made it,” he said softly, “are the ones who weren’t in it for the money. The fortune-seekers couldn’t sustain their passion through the hard times—and there were hard times.”

A transplanted Brit who launched a Web production company in Hong Kong in 1995, Hamilton was one of a handful of Internet entrepreneurs in the island colony who enjoyed a multimillion dollar payday after his firm was acquired by a company that later went public on NASDAQ.

Hamilton’s not alone. In interview after interview throughout Japan, Asia, and North America, successful entrepreneurs told me the same thing, in different words and in different languages: “It’s not about the money.”

What, then, is entrepreneurship about?

Exploiting a market opportunity? Fame? Fortune? Proving yourself?

First, a tip as to what entrepreneurship’s not about: Entrepreneurship is not about you. It’s not about you getting rich, you proving something to the world, you struggling to overcome the odds.

Rather, it’s about you helping other people achieve their goals.

This is obvious when you think about it. Business is all about satisfying customers, right? Well, to satisfy customers, you need to help them save money, solve annoying problems, experience more satisfaction or pleasure, or earn a better living.

Put simply, in order to succeed as an entrepreneur, you must help other people.

Entrepreneurship, therefore, is about helping other people achieve their goals. It’s not about you (I’ll try to minimize repetition of that phrase in these final lines).

Successful entrepreneurs focus on others. Take Derek Sivers, for example. As the leader of a successful touring band, he needed a way to make his CDs available to fans everywhere, all the time—not just at concerts.

But Derek and his group were unattached to a major label, and big sellers like CDNow and Amazon required bands to have in-place agreements with large distributors. What was a hard-working, independent musician to do?

Derek decided to set up his own modest online sales channel, and soon friends from other bands were asking for help selling their music. Within a couple of years, the store, renamed CD Baby, was distributing the work of more than 90,000 artists. To date, it’s paid out more than $80 million to the more than 200,000 independent artists it now represents. Derek focused on helping others.

Successful entrepreneurs undertake ventures that benefit many people. My personal theory is that ventures are successful to the degree that they generate social benefits. I’m no fan of Microsoft’s products or business practices, but who can deny that the company enabled personal computing for a billion citizens? (Too bad Apple missed its chance to make that contribution—we’d probably all be a mellower bunch.)

So success as an entrepreneur is not about you. Ooh—I feel another Clark’s Rule coming on—I think I’ll call this one Clark’s “About” Rule for Entrepreneurs (CARE): It’s Not About You.

Now the question is, what do you CARE about?

This essay first appeared as a guest post at Get Rich Slowly in a slightly different form.

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“So, boy. You wish to serve me?”

Silhouetted against the blue-black sky, the horse-mounted samurai with the horned helmet towered over me like a demon as I knelt in the dirt before him. I could not see his face but there was no mistaking the authority in his growling tone, nor the hint of mockery in his question.

I tried to speak and managed only a faint croak. My mouth had gone dry, as parched as a man dying of thirst. But I had to respond. My fate—and though I didn’t know it then, the fate of all of Japan—rested on my answer.

Raising my head just enough to brave a glance at the demonic figure, I saw him staring at me, like a hawk poised to seize a mouse in its talons.

When I managed to speak, my voice was clear and steady, and I drew courage with each syllable.

“That’s correct, Lord Nobunaga,” I said. “I do.”

It was a time of carnage and darkness: the Age of Wars, when the land was torn by bloodshed and the only law was the law of the sword. A peasant wandered the countryside alone, seeking his fortune, without a coin in his pocket. He longed to become a successful samurai—a career all but impossible for an uneducated peasant unskilled in the martial arts. To be sure, nothing in the demeanor of this five-foot tall, one-hundred-ten-pound boy could possibly have foretold the astounding destiny awaiting him.

His name was Hideyoshi, and on that fateful spring evening in the year 1553, the brash young warlord Nobunaga hired him as a sandal-bearer. Driven by a relentless desire to transcend his peasant roots, Hideyoshi went on to become Nobunaga’s loyal protégé and right-hand man. Ultimately he became the supreme ruler of all Japan—the first peasant ever to rise to the absolute height of power—and unified a nation torn apart by more than a hundred years of civil strife.

Hideyoshi’s true story has inspired countless novels, plays, movies—even video games—for more than four centuries. Born the weakling son of a poor farmer at a time when martial prowess or entry to the priesthood were the only ways for an ambitious commoner to escape a life of backbreaking farm toil, he rose from poverty to rule a mighty nation and command hundreds of thousands of samurai warriors. For generations of men, Hideyoshi became the ultimate underdog hero: a symbol of the possibility of reinventing oneself as a man and rising, Horatio Alger fashion, from rags to riches.

Hideyoshi was driven by a burning desire to rise in the world, and rise he did—beyond his wildest dreams. Sheer hard work, dedication to service, and force of will enabled him to become the first-ever peasant to achieve supreme civil and military power as Taiko, or Imperial Regent—the Emperor’s proxy. Along the way, he pacified dozens of warring clans, built roads, bridges, and Japan’s greatest castles, instituted currency reform, and laid the foundation for a federation of states that would later become Japan’s social democracy—and Asia’s mightiest economic power.

But absolute power, as they say, corrupts absolutely. In the evening of his days, Hideyoshi stained his legacy by ordering an ill-advised invasion of China via Korea (so illogical was this move that many scholars believe mental illness sparked Hideyoshi’s astounding hubris). The debacle turned into a disastrous seven year war costing hundreds of thousands of innocent lives. To this day, Hideyoshi is reviled by many in Korea as history’s greatest villain. Today the lessons of his life could not be more timely.

In The Swordless Samurai, my second book, Hideyoshi reveals secrets of organizational leadership and success in an imaginative exposition of the peasant-turned-samurai’s personal philosophy, based on true historical incidences and what is known of his enigmatic personality. The work is now available in paperback from St. Martin’s Press.

This essay, excerpted from parts of The Swordless Samurai, first appeared as a guest post at the Art of Manliness.

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“The laborer’s day ends with the going down of the sun, and he is then free to devote himself to his chosen pursuit, independent of his labor; but his employer, who speculates from month to month, has no respite from one end of the year to the other.” Thoreau

Several months ago I wrote about something I hadn’t done in nearly 20 years: Apply for a job. In that post, I promised an update on what happened. Here’s what I’d planned to write:

“I was offered the job, and I accepted it …

Now, you may well wonder why a successful company seller and teacher of entrepreneurship would, in the midst of writing a three-month thread exhorting others to go solo or become more entrepreneurial in their work lives, would suddenly become a university employee.

Let me explain.

First, this job is all about my lifework over the past 24 years. Never has a job seem to so well-suited to my interests and skills.

Second, I wanted to reengage in a community. For the past five years I’ve been writing, teaching, investing, and working on a new publishing-related venture. But aside from the periodic bursts of interaction each new class brings, these activities involve working either alone or with one, or occasionally two, other people. I like working solo, but I’m no hermit. I miss the community of the workplace. I love the work-at home-or coffee-shop work style, but I’m also feeling the need to be part of a larger community—and to have a place with my name on the door, where I can go to be part of something bigger, and where I can help others.

Third, my work is computer- and data-intensive, and can be done just about anywhere quiet where one can think, write, research, or compute. That’s fine, but it means I work a lot from home, library, and coffee shops, and tend to exercise the same skills over and over. I want to go to a place that requires new and different behaviors, where colleagues are available for face-to-face chats—and where my name’s on the door (or at least a mailbox).

Fourth, it’s a half-time job, so it leaves room for doctoral studies and my venture, which fortunately is something I can work on rather than in. Teachers should be practitioners, and I want to keep practicing. But the experience of applying, interviewing for, and accepting this job has renewed my appreciation for salaried employment.

Which is a good thing, because let’s face it: Most people are better off working as salaried employees rather than entrepreneurs.

A company is a community, and we all need community. Being a solo or small businessperson can be lonely and socially isolating (I think the most satisfied entrepreneurs are those who succeed in building companies big enough to become true work communities). Telecommuting or otherwise working alone sounds like a dream to those stuck in cubicles, but there’s a dark side, too (see reader Sarah’s Five Ways to turn Telecommuting into a Nightmare for a hilarious but provocative take on the work-at-home lifestyle).

Financially, too, it’s tough to beat a steady income for building wealth. While entrepreneurship can lead to outsized rewards, slow and steady saving and investing is the most reliable path to prosperity for most workers. Ignore financial news and sock away as much salary as you can.

A salaried job provides emotional stability along with financial security. The truth is that most people are happier and better off being employees. A workplace provides community, a belonging-place, camaraderie. At worst, it’s a place to commiserate with coworkers; at best, a place where lifelong friendships grow …”

But! as I wrote back in Paragraph One, all this is what I had planned to write. Here’s what actually happened.

I didn’t get the job.

Though I became one of three finalists, another candidate received and accepted the offer.

I was disappointed. I’d been confident of success, and had good reason to be so. Nevertheless, I had to face a bitter lesson life teaches over and over again: There’s always someone smarter, stronger, and more qualified.

So I’ll remain self-employed, and trod steadily toward my goal of becoming a half-time, salaried university professor. And in the meantime, I’ll continue to sing the praises of both entrepreneurship and salaried employment.

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My London-based buddy Mark Fritz is turning into a bona fide business self-help guru.

I’m glad, because I personally witnessed Mark’s effectiveness on the job at the same Dilbert-sized company for two years. During our time together, he flourished while I struggled (the experience taught me, among other things, that competence is a function of fit between the person and an organization, not something inborn and unchangeable—but that’s another post for another time).

Since then, Mark’s worked all over the world: Japan, Singapore, Egypt, London, Holland, the U.K., and Italy. Mark’s no armchair guru; he’s successfully accomplished hundreds of difficult projects, while effectively managing and mentoring difficult people—both superstars and underperformers.

But what really knocks me out is his unshakable good cheer and humor. I’ve never met anyone who maintains such consistently high spirits amid situations that would crush the life from ordinary employees.

Now Mark has a couple of books out. The first one, called Time to Get Started, carried an intriguing paragraph entitled “Power of a Committed Decision.” Here’s my synopsis:

There is nothing more powerful in the world than a committed decision. Many people think they are making decisions, but unless there is a powerful commitment behind those decisions, they are not decisions, but preferences. Add the commitment to ensure your decisions are real decisions—not preferences.

“I always understood the power of a committed decision,” says Mark, “mostly because I’ve seen so many uncommitted decisions in corporate life! But three years ago, the true power of a committed decision became visible to me with my personal ‘committed decision’ to create a unique daily thought for my Web site.

“Now, creating a unique thought for each day would definitely take commitment, and I also knew I would need the motivation to start and the discipline to keep it up. What I needed were the two ingredients of a committed decision: 1) a “Why” to generate motivation, and 2) a ‘No Alternative’ to create the discipline to follow through.

“The ‘Why?’ was built by viewing the sum of my daily thoughts (over many years) as my legacy—something I can leave behind when I leave this world. This made the “Why” a powerful reason to act. Second, I needed the discipline to make sure I would do it on a daily basis and not miss a single day. This is where “No Alternative” became important. I began to make the daily thoughts more visible by sending an e-mail of the past week’s material to people who found it interesting to read. This way, I had “No Alternative” but to keep it up—or disappoint readers.”

So, if like me, you sometimes find yourself wondering why your decisions, well … don’t actually decide anything, give Mark’s advice a try. And make this year’s decisions stick.

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Hiroshi Tasaka is talking so fast it makes my head whirl. Can even Japanese listeners follow him? I wonder.

Tasaka, a Tokyo-based Tama University professor, writer, and investor with a Ph.D. in nuclear engineering, just served on a panel of judges critiquing a series of presentations by aspiring social entrepreneurs. Now he’s sharing his thoughts with a rapt audience.

“I always thought that strategy was essential to the success of a new business,” Tasaka remarks, “but after watching these presentations, it struck me that the personality and character of the founder of the business is in fact more important than the strategy itself.”

My takeaway? Personality is the ultimate strategy.

This insight can help new entrepreneurs in two crucial ways.

First, as discussed in our primer, scarcity defines entrepreneurship. Entrepreneurship is all about making things happen with limited resources.

So when an entrepreneur lacks money, staff, and other assets, what’s left to attract partners, investors, and customers?

Personality.

The founder’s personality is what garners support, attracts coworkers, and creates the atmosphere of the organization, says Tasaka. Ultimately, what besides personality can be the foundation for management? For the company itself?

But there’s a second reason why personality is the ultimate strategy for entrepreneurs, whether they have money or not.

Ventures often fail because they are incompatible with the founder’s personality.

In other words, personality as strategy means not changing yourself, but rather focusing on endeavors that jibe with who you are.

Referring to late 1990s and early 2000 Internet ventures, Tasaka said:

They started with market analyses such as those that might be prepared by a consultant, then built ‘business plans’ around a competitive analysis. Typically the conclusion was something like ‘no one is in this space now, so if we get in immediately, we won’t have any competition. We can expect annual growth of 65%, a market size of $800 million three years from now, and revenues and earnings of $400 million and $80 million, respectively’.

This kind of planning and forecasting cannot, in and of itself, lead a venture to success, Tasaka emphasized. People, not plans, drive a business forward. It’s impossible to create a successful venture without a founder who inspires those around her to think, ‘this is someone I can get behind.’ A personality compatible with the paper business plan creates the most powerful combination. But if the founder’s character is incompatible with the plan, and she tries to force the execution of a logical plan on a ‘stand-alone’ basis, the inconsistencies are bound to turn up—as failure—sooner or later.

As investors around the world have put it, “I invest in people, not in companies or ideas.”

So for entrepreneurs who have nothing—and for those who have everything—here’s some food for thought:

Personality is the ultimate strategy.

(I attended Professor Tasaka’s lecture in 2002 and offered these thoughts in a different form that year in Japan Entrepreneur Report.)

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A friend recently transitioned from his safe but standing-still job into a promising but “risky” career as a creative professional. So I thought I’d offer some thoughts on how he and readers like him can best ensure that they create and keep wealth.

Many of us aspire to act on our dreams as my friend is doing. And like him, many face the prospect with a mix of hope and excited apprehension. It’s no easy matter to abandon a steady job in favor of an uncertain income.

I once came to this juncture in my own life. What I learned was, there’s no better time to put all your eggs in one basket. Or, in financial advisorspeak, “Wealth is made in concentration.”

My friend mentioned the possibility of supplementing his new career earnings with computer consulting and other work. As one who’s been down that path before, I offered one word of advice.

Don’t.

Focusing time, energy, and capital single-mindedly on your core competency is what builds wealth. Remember The Millionaire Next Door? Most of the people featured in that book became millionaires by devoting themselves wholeheartedly to small businesses. Whether they ran car repair shops, operated restaurants, or flipped rebuilt houses, they poured their time, talent, and cash into one thing. They didn’t hedge their bets by trying to supplement their incomes with peripheral projects. They concentrated with laser intensity on what they did best, and stuck with it over time. We should all do the same. Wealth is made in concentration.

My friend is a talented professional with a deservedly large and growing following. He’s on his way to wealth. So here’s the second of two crucial secrets: “Wealth is made in concentration—and maintained in diversification.” In other words, once you’ve accumulated some wealth, start diversifying away from your concentration.

For example, you’d be wise to invest in at least two uncorrelated asset classes, such as U.S. real estate and overseas stocks. Keep some cash in higher-yield money market funds. Pay off your mortgage (after selling my first company, I paid off three, each on different properties, then kept a vow to buy everything with cash going forward, including real estate).

In recent years, people who became rich on paper by accumulating employer stock in their pension plans learned the hard way that wealth is, indeed, made in concentration—in their cases, in the form of employer stock. But when share prices crashed, those who failed to diversify away from excessive concentration in their own company’s equity paid a dear price.

So, if, like my friend, you keep on concentrating, before long you’ll face a pleasant new challenge: diversifying.

Remember: Wealth is made in concentration—and maintained in diversification.

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Readers Steve and Sean dropped by the house the other day for coffee and a chat. We talked about Portland, hiking, music, Steve’s new magazine article, Ken Kesey, Eugene, New York, writing, and, of course, jobs.

Sean, an accomplished poet and an emerging travel writer, is a former teacher who’d been struck hard by Theresa Collins’s essay, The Truth about Quitting. After we’d polished off our Portland-sized iced coffees, Sean asked the big question:

How can I make more money?

As Soul Shelter’s Director of Fortune, I consider it my solemn duty to help readers become more prosperous.

So I offered Sean some hard truths about book publishing and some alternative ideas for making money with writing. And I described how some writers (not copywriters) regularly pull down $10,000 per month.

Sean jotted down a few furious notes, Steve chimed in, and the conversation moved on.

But afterwards I realized Sean had asked the wrong question. Worse, I had offered the wrong “answer.” My response should have been a counter-question:

“Sean, how do you want to spend your days?”

Because if Sean can truthfully say he wants to spend his days writing, then finding ways to achieve the goal of making more money is simple (not easy, but simple). One can’t examine methods until goals are defined. “Making more money” is merely a by-product of work. It isn’t an acceptable goal because it isn’t predicated on how you want to spend your days. If you want to experience fortune or fulfillment, you must spend your days—first and foremost—in a manner satisfactory to you.

Last month, Three Questions Seekers Must Ask Themselves described the process of setting a goal, identifying a strategy to achieve it, then appraising both the strategy and one’s own ability to execute it. Taken together, the Three Questions form a powerful goal-achievement methodology. The core question is, What is your Goal?

If Sean’s goal is clear, surely there are many ways he can go about achieving it.

Let’s consider Reality A—today, with our goal unachieved—and Reality B, the future, with goal achieved. Our mission is simple: To journey from Reality A to Reality B. Reality A is defined by a set of behaviors that keep us grounded—or tethered—to current circumstance. Moving toward Reality B, therefore, requires adopting new behaviors. But “behavior” is shorthand for “habits.”

So to move from Reality A to Reality B, we must break our Reality A habits. Long-standing habits limit us to long-standing behaviors. As reader Brigid puts it, “if you keep doin’ what you’re doin’, you’re gonna keep gettin’ what you got.”

Reaching Reality B demands acquiring new, uncomfortable, habits. In fact, achieving any significant goal is sure to require uncomfortable action. It’s amazing how frequently we relearn that one can’t create Reality B by repeating Reality A behaviors.

Here are The Three Questions revisited:

1. What is my goal?

2. What new behaviors does Reality B require?

3. Which Reality A behaviors should I replace?

Look at the steps defined in The Three Questions: They provide the clues to new actions needed.

Part of the challenge is that even positive behaviors can hold us back when we become too dogmatic about them. For instance, I’m pretty anal about my Monday through Friday morning stretching/exercise routine. But a pulled muscle recently forced to me to cancel my heretofore inviolable regimen for a week, so I started walking instead. What a difference that made! Now I’m hooked on taking a couple of long walks each week, while continuing the morning exercises—minus the drillmaster attitude. So one cornerstone of achieving greater prosperity is breaking habits.

The other is asking the right question: How do you want to spend your days?

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“Entrepreneurship: A Primer”

“The Soul of an Entrepreneur, the DNA of a Business”

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Derek Sivers had a problem.

As the leader of a successful touring band, he needed a way to make his CDs available to fans everywhere, all the time—not just at concerts.

But Derek and his group were unattached to a major label, and big sellers like CDNow and Amazon required bands to have in-place agreements with large distributors. What was a hard-working, independent musician to do?

Derek decided to set up his own modest online sales channel, and soon friends from other bands were asking for help selling their music. Within a couple of years, the store, renamed CD Baby, was distributing the work of more than 90,000 artists. To date it’s paid independent musicians more than $70 million.

At Derek’s invitation, a couple of years back I visited CD Baby’s cavernous headquarters near Portland International Airport, and was knocked out by the depth and conviction of his entrepreneurial vision. Over the past month we caught up by e-mail. Following are excerpts from the conversation.

- Making a living playing music must have been deeply satisfying. Describe the moment you understood that CD Baby would become a full-time job and your focus would shift from playing to business. What went through your mind as the scale tipped?

The big thought was, “Oops! Well … as long as I’ve accidentally started something, and I don’t need the money, I might as well be really utopian about it.”

That’s when I decided to give CD Baby a real DNA that was not about making money, but all about being a distribution deal dream-come-true from a musician’s point of view. I considered it a utopian experiment more than a business. I was really surprised when it made money anyway.

Really I think the timing was just right. The world needed it, and nobody else was doing it. I was reluctant and actively fighting the growth of it, so when it grew anyway I knew it was meant to be and just accepted my new role in the world.

- I love what you just said: “a DNA that’s not about making money.” I’ve never met a single successful entrepreneur who began with the primary goal of making money. Every one had a higher purpose. What’s your take?

People or companies that are only in it for the money seem to have a metaphorical odor. You might end up patronizing their business anyway, but feel kind of icky about it.

People or companies that are really doing it for the love of the subject seem to glow. You like doing business with them. You smile more often. You feel better about it. And that’s why you end up telling your friends how wonderful they are, and that’s why those companies do better.

People who truly love what they do are more likely to put that extra effort into excellence than those who are only in it for the money. The difference between “really good” and “passionately excellent” can be massive, and take a lot of maniacal work to achieve.

- CD Baby took off shortly before the explosion in digital music sales. How have you adapted?

We didn’t simply stick to CDs. As soon as iTunes launched, CD Baby became their biggest supplier of music, via our Digital Distribution program. Today iTunes is our single biggest source of income.

But we still sell CDs because people still want them. My original vision was to help the artists, regardless of how the music medium evolves.

- That vision clearly offers irresistible value to your customers, because CD Baby now serves more than 200,000 artists. What’s next for CD Baby? And what’s next for you personally?

On CD Baby’s tenth birthday, March 2008, I announced that I don’t work there anymore.

I’m more of an entrepreneur than a manager. I enjoy experimenting and inventing, and know that others can manage much better than me. So, in order to free up my time (and mind) to create new services for musicians, I completely stepped out of CD Baby. Good scary challenge.

After reading The Art of Learning I was thinking of mastery: committing yourself to years of achieving mastery of one single thing.

My first thought was computer programming, but that didn’t feel fulfilling enough. I enjoy it, but only as a means. Then I realized the thing I could really commit myself to a lifetime pursuit of mastery is entrepreneurship. It satisfies me on every level—much more for personal and altruistic reasons than financial.

- Wow. That’s one big hunk o’ learning.

But—what the hell is mastery of entrepreneurship? Starting one successful company? Ten? Or is it something else entirely? There’s no championship, no finish line, especially since happiness is a crucial barometer.

And if entrepreneurship is about creating a new company, then focusing on that means starting a company, achieving proof of success, but not getting involved with ongoing management after that, since management is a different skill. The focused entrepreneur should then start a new company.

As for what’s next—I have so many plans for new companies and services, but nothing worth talking about yet since they don’t exist, and we all know how plans change between paper and reality. In fact CD Baby was only meant to be like PayPal—processing credit cards for my friends—but it turned into an online retail and digital distributor. So, I’ll just quietly launch my new ideas and watch them morph into whatever my customers really need them to be.

- You’ve produced a terrific new illustrated book (6M PDF), that, while targeting musicians, offers tight, offbeat advice any entrepreneur can use. I love your bullets: “Proudly exclude some people,” “Be an extreme version of yourself,” “Well-rounded doesn’t cut it,” and “Call the destination and ask for directions.” Tell us how the book and illustrations came about, and your goals for the work.

Thanks! For the illustrations, I just found a friend-of-a-friend named Heather Q in Portland. She and I sat together at a bar coming up with ideas that might illustrate each point (”This one’s about things getting easier once you do the initial work. How can we illustrate that? Hmm … How about a guy pushing a heavy boulder up a hill, and he’s almost at the top?”). Then she would go sketch out the ideas and come back for the next revision. She’s great.

Honestly I had no goal for the book. I didn’t want to sell it. Just spread it out there freely in hopes it’d help some fellow musicians.

Between every line of the interview, Derek confirms surprising truths about entrepreneurship. I’ll share more in future posts, but here are today’s big takeaways:

It’s Not About You

Entrepreneurship is not about you struggling to break through, you making the grade, you overcoming the odds, you getting rich. It’s about helping others achieve their goals: enabling others’ satisfaction, helping others earn a decent living, helping others succeed.

But it Starts with You …

… because the best place to discover the seed of a new business is at your own workplace. What problems do you face? What’s annoying? Solve that and you may have a business. My friend Jay calls it “scratching the self-serving itch.” And if you serve yourself effectively, you may serve many others well, too.

You may also enjoy:

“Pursuing Fortune and Fulfillment with Blogger Extraordinaire J.D. Roth”

“Three Things I Wish I’d Known Before Starting My Own Business”

“How to Go Solo Without a ‘Big Idea’“