How Good is Business Advice?

CASE STUDY #1 – RECENT MBA

A few years ago I watched as a young colleague with an MBA took it upon himself to advise the proprietor of a crepe stand about operations and business strategy – in exchange for a free crepe.  As a former journeyman chef I was amused by the exchange.

My MBA colleague had no idea how long it would take – and how expensive it would be – to train someone to make crepes, unsupervised. It was clear to me that my colleague’s advice was vastly overpriced.

CASE STUDY #2 – ENTREPRENEUR IN RESIDENCE

A few years ago I served on an advisory panel for early stage companies at Innovation Island on Vancouver Island.

One of the participants seemed to be struggling with too much advice. The presenter had stopped working “in the business” in favour of working “on the business”. When I heard that I couldn’t help thinking that an advisor had lifted that line verbatim from an introductory management consulting textbook.

In the past year or so the company had successfully sold their services to at least 3 large government organizations – which isn’t trivial for a small startup on northern Vancouver Island. They apparently had taken the advice of the “entrepreneur in residence”.

Just a note here. Successful entrepreneurs don’t usually work for goverrnment incubators. It is most often failed entrepreneurs looking for a regular pay cheque – and maybe a pension – who work with incubators. Most successful entrepreneurs keep working in their own businesses, become investors – or simply retire.

CASE STUDY #3 – IP LAWYER

Many years ago I read an opinion piece by an intellectual property lawyer. He recommended that a startup developing IP should keep it close to the chest until they secured investment. He didn’t like the idea of using the IP in services in order to prove out the technology. Maybe that works for an IP lawyer who gets paid when the IP is protected – but it sounds like bad advice to me. How does a startup know whether their IP is worth protecting until they established that it’s useful?

How do you know that a minimum viable product is viable unless a customer has tried it out?

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If you’re getting advice, you really have to consider the source. Remember above all, that there is no one size fits all answer to your question. Your business, jurisdiction and personal circumstances are unique.

CPAs who have provided tax, accounting and structuring advice for years, understand this implicitly. Our challenge is to get our clients to ask us first….