One challenge that I always have to deal with is benchmarking. This is especially the case for entrepreneurs who often suffer from a limited amount of data from which to benchmark.
You see, benchmarking has a very strong and positive purpose. The problem is that outside of a corporate culture it becomes very challenging to become an effective benchmarker. Many times, despite our greatest intentions, benchmarking can do much more harm than good.
Many times, you have an individual who is an up and coming entrepreneur that would like to become the next Mark Zuckerberg or Bill Gates. Most of the time, at least with the handful of young guys that I deal with, they have the necessary resources and talent to achieve this type of success.
However, the problem that many of these young entrepreneurs run into is that they are benchmarking the top performers as they are now, versus as they were when they were younger.
This creates a lot of issues.
After all, there is one thing in common with every new task or skillset one attempts to build: it is the beginning that is most difficult and bears the least fruit.
In Real Estate, you work the most hours and get the least commissions.
In Hedge Funds, you do the most reading and research and raise the least capital.. ETC.
And this is the way things work. What most people do not know is that those who brave through are those who quickly achieve exponential growth. This is the result of many different things including: individual reputation / contacts / and other network effects. Most importantly, however, it is the result of a constant iterative cycle where an individual becomes better and better at the tasks that they must complete.
Onlookers look at these young guys and call them lucky overnight successes while those nerds (such as myself) who study these things look upon the outcomes and call them inevitable.
Benchmarking has a strong purpose but it should always be applied in the right context. If you want to be a top entrepreneur or any other professional benchmark yourself against those who just started the process alongside you.. and extrapolate. If you are in the top 1% of first year analysts, you are indeed on the track to become a top 1% partner, and so on..
P.S. Don't miss an important post! Sign up to receive this blog by email!
02
