Being passionate about the product

[The Original Henry]

I'm passionate about making lots of money with little effort, so I guess that would make me a perfect candidate for owning a bank. Since my membership into that little club seems to have been lost in the mail I guess I'm just not in a position to do anything useful for anyone. Damn lack of passion! Without it all of my experience, knowledge, abilities, talents, and methodical problem solving skills are rendered useless. /sarcasm

[The Gorn]

Well, I guess you could start another razor company. After all, you liked the razor so much you bought the company. Compounded sarcasm... 

That thing about lots of money and little effort is pretty good. I could buy that for a quarter. ("The Marching Morons.")

[David Randolph]

There is a very good reason to look for passion. As an outsider to a venture, the question is: will this person hang in there through all the crazy times when they have no hope of getting paid so as to build this company? Any VC knows that the company will go through tough times. What they are wondering is whether or not the person standing in front of them will hang in there or fold the company (and make the investor eat the losses). So, VC's are looking for people with passion.

So, the real question is not about passion for the product, but the determination to hang in there to make the company succeed. That determination is not measurable, but passion is. So, the passion for the product is a proxy for whether or not this person has the determination.

Another reason is that people buy from passionate people. So, passionate sales people sell more.

[The Original Henry]

That makes perfect sense for early-stage startups, but I've been hearing the same canard applied to traditional mergers and acquisitions as well. As the potential acquirer you're supposed to have a passion for the acquired. Maybe I'm wrong, but I just can't see how it applies in those cases.

The problem with passion is it isn't sustainable. When the passion starts to waver and die out there better be something more concrete beneath the surface or the whole thing will fall apart.

[David Randolph]

When a standard is being applied to a situation without thinking, then we can be sure that people are going to lose money. So, if people are insisting that someone has passion about a company / product when looking at traditional mergers, we can be sure that they are not going to be making the right decisions.

When we look at the history out there, we find that determination is the key for startups. But for people purchasing a company, other factors are far more important for success. For example, a number of middle managers have left larger companies and purchased smaller entities. By bringing in professional management skills, they have improved those companies and made a success. Similarly, people buy franchises and succeed because of the structured management that the franchiser brings to the new business.

[datagirl]

I'm getting confused, are we talking product, company or brand?  Some of the examples cited are from large corporate entities that care about stock prices and executive bonuses, which is more of a brand issue rather than product.  I know Sears (wasn't it?) started out selling pocket watches to railroad employees, and branched out from there.  So as a company went from a product to ... what?

If there is to be passion it should be around a mission statement, even if that is to make the best widget known to the human race.

Regards,
-DG

[Carrie Cobol]

I don't know the answer to the question either, other than what has already been pointed out that small companies must have passion and large companies not so much.  I'm currently working for a large corporation, so let me describe what happened here, because it's relevant to the topic, might be illustrative, and I find it interesting.  We started out decades ago as a commercial software vendor in a niche market.  Over time as we grew, we got sold to a series of larger and larger companies.  Until recently this was because we were successful and had a great reputation in our market (highest market share in our niche), so we were a very attractive entity to "own".  However, as each subsequent owning company got larger, they had less and less knowledge of our specific market or product.  As long as they left us to do what we knew how to do best, we still did well.  Our current owner, however, is one of the biggest federal contractors.  What they know how to do best is large multi-year federal contracts.  So they are forcing us to do business that way, using defense contractor security policies and federal budgetary policies.  We are a square peg in a round hole, losing customers (down to something like 2% market share in the niche) and gradually dying.  The contractor doesn't need to have passion for our product or market, but it would be helpful if they understood concepts like market share, loss leaders, keeping customers happy for repeat business, etc.

The company is so big that our demise is a drop in the ocean of their finances and they won't even notice when we finally are dead.  So in that sense, passion has nothing to do with it, and the company will succeed without us.  But it does beg the question of why they bought us to begin with.  We're just an example of something that happens every now and then in the business world.  Some large corporate CEO eyeballs a small company, thinks he can milk it or keep it as a cash cow, and gradually kills the cow from negligence.  So in THAT sense, ensuring that the upper management always has passion for the product is really necessary.  I guess it all depends on what the end goal is.

[lorb]

If you are a drop in the ocean, they can buy you just to put you out of business/competition, or keep the clients that have such a fetish over your product that they haven't gotten over it yet, but when they do they can transition to the parent co.'s normal product line.  One scenario. 

[TechTalk]

So here's the deal - it's almost gospel to hear people say that if you're going to start or own a business you absolutely must be passionate about the product or service that you're selling.

Here is my interpretation of what most of them are actually trying to say.  If you are going to start a business that is not going to be scalable or one that can be easily sold then you better love what you are doing because you now are stuck with a 24x7x365 a day job that you hate and unlike being a full-time employee you are now stuck doing something that you cannot easily walk away from.

Lots of ALREADY successful entrepreneurs will start a new business that they don't particularly care much about.  So why do they do this when they tend to have zero interest in the day-to-day operations of such a business and hire professional managers to run all of the businesses which they own?  Because now that they have enough cash or access to lots of cash they are pursuing their true passion which is empire building.

[JavaMouse]

The company is so big that our demise is a drop in the ocean of their finances and they won't even notice when we finally are dead.  So in that sense, passion has nothing to do with it, and the company will succeed without us.  But it does beg the question of why they bought us to begin with.  We're just an example of something that happens every now and then in the business world.  Some large corporate CEO eyeballs a small company, thinks he can milk it or keep it as a cash cow, and gradually kills the cow from negligence.

I've heard some similar things happen with acquisitions by Google.  The companies got absorbed, and the product died or went stagnant.  It makes me think the acquiring company just has too much money, and doesn't want to pay out a dividend for fear the stock price will drop.

[The Original Henry]

Because now that they have enough cash or access to lots of cash they are pursuing their true passion which is empire building.

Yes....this is my passion. Like buying another house in monopoly. I couldn't care less if the underlying property was Boardwalk or Marvin Gardens....I just want the damn house.

[TechTalk]

Yes....this is my passion. Like buying another house in monopoly...

Hi The Original Henry, no need to respond to this post.  I am simply doing some rambling here...

Types of Entrepreneurs
In my opinion there are essentially two kinds of entrepreneurs:  the “mom-and-pop” entrepreneur, a.k.a. the “lifestyle” entrepreneur, and the “high-growth” entrepreneur.  Unfortunately, not all entrepreneurs who seek high growth can attain it.  Sometimes circumstances outside of their control can hamper their growth plans.  Now having said this, I suppose I need to mention that many people believe the "entrepreneurial spectrum" is quite broad and that it includes not only those who start companies from scratch, but also:

* People who acquired an established company through inheritance or a buyout (i.e. acquirers).
* Franchisors as well as franchisee.
* Corporate entrepreneurs.

-----------------------------------------------------

An Example Of How to Get Rich On The Internet Via Venture Financing?
Since you mentioned Monopoly -- Here is an article that I recently read about social games/entertainment http://money.cnn.com/2010/07/28/technology/facebook_pencake/index.htm
Although the article primarily talks about Facebook booting a Hong Kong based app developer called Pencake from its website what I found interesting was this blurb, "Zynga reportedly sucks in revenue of $1 million a day".  Although I never played a Zynga game, I have been told that they aren't that sophisticated.

An Example Of How A Solo-Entrepreneur Could Get Rich On The Internet?
I also read somewhere that there are Internet companies that will play games such as World of War Craft for hard core gamers for a fee.  The way it works is a company owner hires Asian workers and pays them a crappy wage to play these games for people living in countries such as the USA. What the Asian workers do is mundane stuff like dig for gold so that American game players can purchase new accessories for their avatar.

The point I am trying to make is that it appears to me that many Americans want to be entertained 24x7, so, there probably are still some ways to make lots of money via social media.  That said, I believe most Internet based business ideas that are worth pursuing need to be done via a group of people and not by someone who wants to remain a solo-entrepreneur.

-----------------------------------------------------

Do you really want to make LOTS of money via the Internet and you don't care how you do it?  Then leave the USA and become a hacker within a cyber gang.  Here is just one example of how cyber criminals are getting rich.

Below, is a small snippet taken from a news segment that aired on "60 Minutes" about cyber warfare.

Henry's job is to police potential targets all over the United States. He told "60 Minutes" that criminals have used the Internet to steal more than $100 million from U.S. banks so far this year and they did it without ever having to draw a gun or pass a note to a teller.

.........

Asked if they have caught any of the suspects yet, Henry said, "Workin' on it."