The Most Misleading Number in Business

My friend and business mentor Danny Warshay of and I had our bi-weekly “intimate-phone-chat-that-we-record-and-send-to-anyone-who-will-listen” on Monday.

Danny Warshay Action Danny teaches entrepreneurship at Brown University, the only Ivy League school named after the first word of a Van Morrison song title, and he is an alum of Harvard Business School, which impresses you even if you won’t admit it.

Plus he spent a few years in brand management at Procter & Gamble.

Plus he’s a serial start-up guy, lending his talents to a bunch of new ventures in publishing, natural health, engineering, and so on.

Plus plus he travels around the world teaching and consulting on entrepreneurship, from China to Egypt to Portugal to Israel to I can’t even keep track of where else.

So when we got on the horn to talk about what he calls “bottom up research,” I was all ears.

My Beginner Entrepreneurial Mistake

And when – this was totally unrehearsed – I mentioned an early mistake I made when I was first starting out on my own, I got Danny onto his soapbox in a big way. It starts at 4 minutes 30 seconds in the audio (below).

Danny’s mild-mannered, calm, earnest demeanor vanished as he ranted about how many times he hears otherwise savvy entrepreneurs pull out this particular number – the one I had used – to justify their business plan to themselves, to partners and to investors.

In the process, you’ll discover how to conduct free research that’s arguably more valuable than anything you can buy or commission. Danny shares two examples of “bottom up research” from his P&G days, showing how Tide and Dawn teams innovated based on this method of research that’s available to all of us, regardless of how pinched our pennies.

Click the arrow below for a short course in entrepreneurship from one of the leading teachers in the US. Or click the blue link to download the MP3 for listening at your leisure:

Click here to download the Danny Warshay “Bottom Up Research” Interview

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5 Comments. Leave a comment or send a Trackback.
  1. #1 • Alex Newell said on March 11 2010:

    The anthropology angle was very apt. A lot of online surveys are self sabotaged by daft questions and observation is the key.
    Interesting too that the Tide guys were shocked by taking a knife to the packet.
    Don't they use their own products?

  2. #2 • Ron Stauffer, Jr said on March 11 2010:

    That's amazing… Such a simple idea, and yet it took the billion-dollar corporate giant P&G a while to figure it out. I remember my mom opening the Tide package that way!
    Thanks for the helpful tip! Sounds like we should essentially have a little more confidence in ourselves when it comes to market research. Just our small businesses don't have entire teams of staff doesn't mean we can't do some powerful market analysis ourselves!

  3. #3 • John Chancellor said on March 11 2010:

    Very valuable lessons in this call.  I suspect that more businesses fail before they actually get started because they do not follow the lessons Dan shares.
    If you really want to guarantee your success, you need to listen to this call and build your business based on the lessons here.  Everyone I know wants to jump into the action, get started, sell some product.  Doing it right takes a little longer, but the foundation is so important.

    Great call.  Thanks for sharing.

  4. #4 • Mert Hilmi Iseri said on June 12 2011:

    Great audio piece! DSIC folks – isn’t it about time we start talking to our customers every day? :)

  5. #5 • Gemma Laming said on July 3 2011:

    If there is one thing that comes out of this interview, it is that much marketing is done by telling the customer what they want.

    Really listening to the client is quite a different skill altogether – and if you have seen my references page, I am credited with this on no few occasions. It is however, a more feminine trait, and something that in the male world of business and academia, is often overlooked.