The title refers to a very good book about what it takes to be an entrepreneur and build a great business. The authors of the book are Anthony Tjian, Richard Harrington and Tsun-Yan Hsieh and the book is called Heart, Smarts, Guts and Luck published by Harvard Business Review Press, Boston, Mass, 2012. The authors tried to figure out the basic components of what it means to be an entrepreneur.

In summary of the book – there are many other parts of the book – questions to ask yourself and others about which of the categories you are generally in and how to understand the other categories. We all have characteristics of the four categories – Heart, Smarts, Gut and Luck and hopefully while we all want luck to happen we do not rely on it as the number one attribute.

The book includes some time tested and true practices:

1) The 3 Golden Rules –  a) people should always be your top priority; b) focus on the business model and how you plan on making money; c) always start with the niche market – competition should be easier.

2) Be the Best at Something – there are 4 broad categories which one are you?Best Quality; Best Bang for the Buck; Luxury and Aspiration and Must-Have

3) Think Big, Start Small and be able to Scale Up Fast

4) Repeat Customers and Revenues Make Life Easier – Recurring revenue + Fixed cost leverage = Superior Cash Flow

5) Get the Right Customer  – There is no average customer. Aim to be approximately correct about your top sub segments rather than preciously incorrect about the average.

6) Simple Rules and Questions for Gaining and Retaining the Best People – 4 rules to help are: help employee create a meaningful role; give feedback; offer the context of professional development; and say thank you.

7) Accountability Makes or Breaks Your Culture – are the incentives you offer to increase sales and revenue the same as your culture that you say you want? remember everyone sees what is happening in the company, they may not know why, but they see.

8) Embrace Failure – at some point a project or drive for market share will not work, learn what went wrong, when you needed to ask for help; what you skills are best at and what they are not so good at. Then and only then failure leads to opportunity.

The book offers self assessment tools or check out their website www.HSGL.com for a host of great reference materials.

Linking to dividend paying stocks, the tools will help you evaluate management of the your companies as well as yourself, thus making you a better investor.

There are more questions than answers, till the next time – to raising questions.