Intelligence And Vigilantes

(Note: This is the third and final entry in a three part series on some of the things I have learned about intelligence support to entrepreneurs from running a number of crowdfunding campaigns. For Part 1, click here and for Part 2, click here.)

Moros is a comic book series by Josh Lucas.  Loosely based on our hometown, Erie, PA, Moros tells the story of a former soldier turned policeman who becomes a vigilante to rid his town of a drug that he takes himself.

Josh successfully funded his third issue of the comic with a Kickstarter campaign that we helped him run back in April.

Josh was an experienced crowdfunder when I met him.  He had funded his first issue with a successful IndieGoGo campaign and had spent the time since that first issue working on his second issue and learning what he could about the comic book industry.

What he learned and what I have seen first hand with almost all of the entrepreneurs I have worked with (myself included) is that there is a kind of insanity that grips you when you are working on these projects.  It is almost impossible for you to see the world as it is.  Instead, you insist that the world is as you want it to be.  

Most intelligence professionals know this problem better as the Intel-Ops Divide.  The argument goes something like this:  Intel and ops need to be kept separate.  If they aren't, the intel guys run the risk of becoming so enamored with the plans the ops guys come up with that intel starts to see all the evidence not as it is but as ops hopes it will be.  This makes the intel guys useless to the organization.

The problem with entrepreneurs is that they don't typically have enough resources to be able to keep intel and ops separate.  So, what is an entrepreneur to do?  It seems to me that successful entrepreneurs manage this problem by asking dramatically different questions of intelligence professionals than the ones asked by either unsuccessful entrepreneurs or traditional leaders.

There is a growing body of evidence (produced largely by the Darden School of Business at the University of Virginia) that successful entrepreneurs and innovators look at problems in fundamentally different ways from the rest of us.  Specifically, they use "effectual reasoning" (as opposed to causal reasoning) and five specific techniques to help them make decisions:  

• Bird in Hand.  "What do I have at hand and what can I do with it right now?" are the kinds of questions that emerge from the Bird in Hand Principle.  The kinds of intelligence questions that arise from this principle focus on expanding the entrepreneur's understanding of what resources are immediately available for use.

• Affordable Loss.  Good entrepreneurs don't focus exclusively on the potential gain.  Instead, they work hard to understand what they can afford to lose at each step.  Helping the entrepreneur understand the full nature of the downside risk is a good task for intel.

• Lemonade.  This principle is about not only taking advantage of surprises (both good and bad) but welcoming them.  It means that intel support to entrepreneurs has to be very flexible and very fast.

• Patchwork Quilt.  Good entrepreneurs rarely try to go it alone.  Instead they are constantly looking for partnerships (both formal and informal) with self-selecting stakeholders.  Identifying and prioritizing these potential stakeholders seems a natural fit for intel.

• Pilot in the Plane.  Good entrepreneurs focus on activities that they can control and don't worry so much about what they can't.  Quoting the Society for Effectual Action, at their core, good entrepreneurs seem to believe that "the future is neither found nor predicted, but rather made."  Intel's role here is to help define what can and can't be controlled in the environment that surrounds the entrepreneur. 

These principles and the associated intel questions that go with them don't ask the intel professional to buy into the underlying goals of the entrepreneur or evaluate the progress towards those goals.  Instead, they set the stage for intel success by asking questions that support the decisionmaking process of the entrepreneur uncomplicated by operational bias.

On The Intelligence Requirements Of Entrepreneurs (ENTINT)

(Note to readers:  This is the continuation of an occasional series of posts about providing intelligence support to entrepreneurs   This issue interests me for both academic and personal reasons.  Academically, I can think of no one who has touched it and, personally, I have recently started a games company and am about to launch my first game, Widget.)

To understand the intelligence requirements of entrepreneurs, it helps, I think, to have an understanding of what makes a "good' entrepreneur.   When you consider that both the guy with 10 million dollars in venture capital and the guy with 50 bucks of used CDs are both technically entrepreneurs, such a task might seem difficult, if not impossible. 

Recently, though, some very good research has come out of the Darden School of Business at the University of Virginia. Saras Sarasvathy, (who, it should be noted, got her start at Carnegie Mellon working with Nobel Laureate, Herbert Simon), has done extensive research on how great entrepreneurs think.

Great entrepreneurs, it seems, are "effectual reasoners".  They start with broad goals, assess their means - the birds in their hands - and then move as far as their resources will allow.  This is in contrast to more typical "causal reasoning" which starts with a specific goal and a clear plan for achieving it.  The image below, from the Society for Effectual Action, visualizes the difference: 

http://www.effectuation.org/learn/effectuation-101

Entrepreneurs, according to Sarasvathy's research, operate on five principles.  These principles, in turn, give an insight into the intelligence needs of entrepreneurs:

• Bird in the Hand.  Entrepreneurs start by imagining what they can do with what they have rather than setting a goal and then abandoning it if they do not have the means to achieve it.  Helping the entrepreneur identify what they "have" in this global economy would seem to be at least one intelligence requirement. 
• Affordable Loss.   Instead of large all or nothing plans, entrepreneurs seek, like Napoleon, to conduct "a well reasoned and extremely circumspect defensive, followed by a rapid and audacious attack."  In other words, they seek to determine what they can afford to lose at each step rather than hyper-focus on expected return.  Intelligence should, then, focus on the near-term, external, potential causes of loss.
• Lemonade.  Entrepreneurs tend to see surprises as opportunities.  Intelligence would be useful in helping the entrepreneur explore, understand and exploit those opportunities.  
• Patchwork Quilt.  Entrepreneurs worry less about competition and more about building partnerships with people who want to work with them.  Intelligence could play a significant role in helping the entrepreneur identify potential partners.
• Pilot in the plane.  Entrepreneurs believe that the future is "neither found nor predicted, but rather made."  Sarasvathy contrasts this to managerial thinking which accepts that trends will hold and the future is predictable.  

This last principle would seem to fly in the face of most intelligence analysis activities but I don't think so.  What it highlights for me is a trend I see throughout the five principles - a focus on the immediate (or, at best, the near term) when it comes to intelligence support to entrepreneurs.  

This certainly tracks with my own experience to date.  I don't need perfect answers.  I certainly don't need long-term predictions about the health of the tabletop gaming industry.  I need good-enough answers about things I am working on right now.  

This, in turn, suggests the form of an intelligence activity designed to support entrepreneurs.   It would have to be staffed by a variety of high-quality generalists, able to provide answers on a wide range of topics quickly.  Since almost no entrepreneurs have money to burn, it would likely have to provide support to a number of entrepreneurs at a number of different low-cost support levels (perhaps by subscription or even by the question).  It would have to be available 24/7 and, it almost goes without saying, it would have to be available online and possibly through phone or text message.

Such a service already exists.  Called Fancy Hands, this online site bills itself as a virtual assistant service.  While it provides a wide variety of services, all at a reasonable flat fee per month for a pre-defined number of requests, I have used Fancy Hands almost exclusively as a research service - a proto-intelligence service for entrepreneurs, if you will.  

Fancy Hands, of course, does much more than research for their clients and, I am sure, would dispute any claim that they are an intelligence service of any kind (proto or not).  My point is not to disagree with them (I like their service too much to gratuitously seek to irritate them...).  My point is that any organization seeking to provide intelligence services to entrepreneurs could learn from them.  Much of what they do and, more importantly, the way they do it, is exactly what entrepreneurs require.