Turn A Winning Idea Into A Startup

1959: “Before man reaches the moon, your mail will be delivered within hours from New York to Australia by guided missiles. We stand on the threshold of rocket mail.” — Arthur Summerfield, U.S. Postmaster General

Jason Silva beautifully describes what if feels like to start a company. AWE

Millions of potential entrepreneurs have great ideas, but do nothing about them. They never get the feeling of awe.

The memory of a great idea fades quickly for most people. What separates the real entrepreneur from the rest is his or her ability to act upon the idea, what I call “reacting forward.”

If you want to build your idea into a real company you must continue to flow toward it. The more you flow toward something imaginary the more other things are attracted to the energy of the flow. When you keep moving toward your dream start-up you literally create it out of nothing. Everything that exists was first imagined into being, but you have to be clever in how you are able to keep that idea in your imagination when the world around you is such a distraction.

An example of a company created by reacting forward… constantly.

Michael Dell’s biography is a great example of the benefit of a non-entrepreneur constantly imagining success until he gets into a flow state.

In 1983, the notoriously shy Michael Dell’s great idea was to sell computers directly to customers, which would allow them to be configured according to individual desires. Speaking twenty years later he said of the idea “No one told me that we couldn’t do it, and if they did, I wasn’t listening.”

At the time, IBM personal computers sold in stores for about $3,000. After taking them apart and rebuilding them, Dell realized the components could be purchased for one-fourth the price. Even with added memory, bigger monitors and faster modems, the PCs could still be sold at a handsome profit. Soon he was buying components in bulk to reduce the cost. A good business decision, but it meant his room was starting to look like a mechanic’s shop. 
Regardless, he was constantly reacting forward on his idea, and by surrounding himself with the tools of his trade he was constantly imagining and adding attention.

“I was quite excited about the possibilities for personal computers and how they could change society. Meanwhile, as a customer, I was disappointed that when I went to a computer store, the salespeople didn’t really know about computers. I had this idea to sell the products directly to the user over the phone. The Internet,” he adds, “was an unimaginable gift from heaven that came ten years later.” 


(hint: One of the secretss to a successful start-up is to survive long enough to hit a home run. Every business and industry will fall upon a positive market one day, but one has to still be in business to take advantage.)

College plans and his parents’ expectations intervened. But Michael Dell was determined. He drove off to the University of Texas at Austin in a car he’d bought with earnings from selling newspaper subscriptions. In the backseat were three second-hand computers, and his idea was never more than inches from him and constantly in his mind. By November, rumors reached his parents that he wasn’t attending classes. On a surprise visit to Austin, they caught their son red-handed skipping lessons to work on computers.

It was in college that Dell found the niche that would become his boom. Bypassing the middleman and the markups, Dell tapped his savings account for $1,000, and incorporated his idea as PCs Limited. This is a pivotal point in the life of a start-up and also in the art of creating flow. Taking this step tells life you are committed to this idea. Keep in mind that the Internet was not available and to do that back then required going through a legal service. Today, the same process costs around $100 and takes five minutes online.

Being shy made him usually reticent to approach potential customers, but the effect of formally incorporating also gave him a higher self-confidence as a legitimate, real-life business and CEO. He started building and selling computers for people he knew at college. His emphasis, however, wasn’t just on good machines, but strong customer support and cheaper prices. Soon, he had accounts outside of school, and it wasn’t long before Dell dropped out and focused all his efforts on his business.

The numbers proved staggering. In 1984, Dell’s first full year in business, he had $6 million in sales. By 2000, Dell was a billionaire and his company had offices in 34 countries and employee count of more than 35,000. The following year, Dell Computer surpassed Compaq Computer as the world’s largest PC maker.

Dell’s success shines a light on many of the positive attributes of successful entrepreneurs. Before we continue, however, I want to highlight the fact that he formally incorporated his idea before it was a real business. I believe this is an essential step to catapult an idea into a real thing. We will discuss it next. Meanwhile let’s continue with his fascinating insights.

Overall, Dell’s first 20 years proved to be one of the most successful businesses on the planet, surprising such titans as Wal-Mart and General Electric. Dell’s story is so compelling that, in 1999, he published a best-selling book about his success, Direct from Dell: Strategies That Revolutionized the Industry.

In the first year of his company, Dell spent a lot of his time learning about the other aspects of running a business. It was constantly changing, and he learned to be adaptable. He said:

“There were obviously no classes on learning how to start and run a business in my high school, so I clearly had a lot to learn. And learn I did, mostly by experimenting and making a bunch of mistakes. One of the first things I learned, though, was that there was a relationship between screwing up and learning: The more mistakes I made, the faster I learned.”

“Since we were growing so quickly, everything was constantly changing. We’d say, ’What’s the best way to do this?’ and come up with an answer. The resulting process would work for a while, then it would stop working and we’d have to adjust it and try something else. The whole thing was one big experiment. From the beginning, we tended to come at things in a very practical way. I was always asking, ’What’s the most efficient way to accomplish this?’ Consequently, we eliminated the possibility for bureaucracy before it ever cropped up, and that provided opportunities for learning as well. Constantly questioning conventional thinking became part of our company mentality. And our explosive growth helped to foster a great sense of camaraderie and a real ’can-do’ attitude. We challenged ourselves constantly, to grow more or to provide better service to our customers; and each time we set a new goal, we would make it. Then we would stop for a moment, give each other a few high fives, and get started on tackling the next goal.”

Dell was at one time the largest seller of personal computers and servers in the world, and was ranked 41 on the Fortune 500 in 2011. Revenues were over $60 billion with an income before taxes of $3.5 billion.

In March 2004, at age 39, Dell stepped down as CEO (he remained chairman) and continued to focus on research and technology. But soon there were signs of trouble. The company became a more traditionally structured hierarchy of management, and soon began losing market share because of competition from much more aggressive rivals such as Hewlett-Packard and Lenovo. Dell was also criticized for poor customer service and faced investigations into its accounting practices by the SEC and a U.S. Attorney. 
The struggles forced Dell to return to the company he founded, to tackle the issues head-on. In 48 hours, he’d put in a new, flat management team.

Dell’s history has many key turning points, and there is a reason Michael Dell is respected as an exemplary entrepreneur. Early in their story, we can see his willingness and ability to adapt, which surely was a key to their survival in the first few critical years. In my opinion, however, there was a more significant moment, and it is right at the birth of the company when a person takes a great moment of insight and reacts forward.

Whether you have just an idea for a company or you already run a small business, the benefits of incorporation are incalculable. Statistics show, however, that at least 90% of small businesses have still not made that critical step. The personal risk those owners are exposed to is senseless. Regardless of where you are as an entrepreneur, this step is essential to take.

In Dell’s story one can see how he was able to continue reacting forward. Every time he fiddled with computer parts he was keeping his idea alive. You don’t, however, have to mess with anything in order to react forward. You simply incorporate your idea. Incorporation provides essential psychological fuel to the dream. It is what places your dream next to your heart instead of just in your eyes, and it is the easiest and least expensive step you will ever make in your start-up

Reacting forward isn’t just an idea. It is a physical imperative. I am not a fan of the Law of Attraction for many reasons. However, like LOA advocates. I do think that understanding the workings of the reticular activation system (RAS) is helpful. The RAS sits at the root of your brains and acts to filter out anything that does not support your current belief system. Hence, to change any beliefs you have to deliberately choose sensory inputs to change how RAS behaves as a filter. If your current mindset is that it is not the right time to start-up a company, your RAS will filter out anything that disagrees with that assumption. In Dell’s story you can see how his mindset changed over time with the more attention he paid to disrupting the computer business model.

Your brain is bombarded by 2 million bits of data a second, and the RAS filters out all but 147 bits. That means you have mostly shut yourself off from the rest of the world around. If the 147 bits you allow includes a TV headline about the dour state of the economy or the difficulty getting capital, then you will be unlikely to have the self-confidence to start. You change that by shutting out all that negative noise and replacing it with anything that reminds you of your winning idea. The easiest way to do that is to incorporate the idea.

Just being aware of the RAS and the process is enough to help you start to manage it. It is the beginning of progress or growth. For more tips on protecting a positive, flowing mentality there is a pdf in downloadable resources. Okay, so for this course the key point is that RAS either makes you successful or a failure because it filters out anything that you don’t want to believe. That is why reacting forward and attaining flow is so critical when you want to turn an idea into a company. There is a very simple way to change it all, which is simply to take your winning idea and immediately incorporate it.

Let me explain the benefits in the next activity. First check out downloadable resources for an excellent article and my additional mentality control tips.

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Incorporating an idea helps with that. I have been advising this for years and have yet to meet a single person who took the advice. I hope someone tries it and explains how it feels for the first time. $100 investment on an online paperwork process can change your life forever.