National Entrepreneur’s Day – Top 5 Startup Tips
Today, November 17th, is National Entrepreneur’s Day, and in celebration of all of the millions of entrepreneurs around the world chasing after their dreams to get to market and win, I want to highlight a few of the key lessons learned over the past ten years that will help you not only survive, but thrive in your new venture.
STARTUP TIP #1
YOU DON’T NEED A “GOOD” IDEA TO START
While everyone’s out there hunting for the next Uber®, Airbnb®, Google® or Alibaba®, the real entrepreneurs are busy testing new concepts instead of dreaming, writing business plans, and overthinking the crap out of everything.
Average Idea + Massive Action x Initial Results/Adjustments = Progress
“Big” Idea + Zero to Little Action X Excuses/Time = Nothing Burger
Stop waiting for the perfect idea to hit you like some entrepreneurial Cupid arrow. Bad ideas can become incredibly successful ideas with testing and effort. Great ideas can stay great on paper and in conversation and never see the light of day.
The choice is yours. Take time this week to stop day dreaming about your big idea some day, and instead take 1 action towards actually seeing if it has legs. If you’re looking to start your own restaurant, go scout locations and count how many potential patrons walk by in one hour. That might tell you about the existing walk-in value of that retail location versus another one. Log your results. If you’re hoping to build an app one day stop dreaming about building it and actually go to a meet up for a coffee shop and buy a coder there a cup of coffee and ask them what they’re currently working on and see if they might be interested in talking about the project you’re hoping to build some day. If you’re looking to run a real estate agency some day, stop envying others and their commission checks but go invite a realtor for lunch and asked them real questions about how they got started and built their client base.
A well executed, average idea is more powerful than a “good” one that’s poorly executed.
STARTUP TIP #2
YOU DON’T NEED (A LOT OF) MONEY TO START
Some entrepreneurs believe that they need to raise funding from angel investors or venture capitalists in order to build a great product and launch. Unfortunately, they never attempt to build a prototype or first version of their product, and eventually, someone else beats them to market with their idea.
While some products, services and industries require a large amount of capital investment – machinery, plants, automobiles, etc — most actually do not.
Instead of trying to build the entire product, launch the retail clothing store, open that beautiful restaurant, or out-do the next app, try to launch a series of test ads on Facebook, Instagram, Google Ads or another heavily trafficked website to determine the overall market size, potential interest, and projected revenue that you might be able to command for under $500.
Most great companies were built from market hunches, but they all started out small, and were essentially “proven” or “disproven” with a series of tests that guided the founders in various directions. These directions could be price related (increasing or decreasing price for a given item and market to determine the overall willingness to pay of a particular customer group), or were feature set or solution related (tweaking the marketing copy to determine if a given consumer or business group were interested enough in clicking on the ad and signing up). The key is to test, test, and test some more until you determine (before building a startup company), what the overall market dynamics and demand are for your product, service or experience. For example, instead of launching a new restaurant in your town, instead, take out a few ads on either Yelp®, Google Ads® or Facebook® to determine how many people are potentially interested in your new type of cuisine. Run the ads for a few weeks, without charging anyone upfront for anything naturally, and based on both the impression volume and click volume, you can get a good sense of the demand. Should the demand be strong enough, it might warrant further tests or possibly launching your new restaurant.
The key is to have the market prove its demand to you before you even launch; not the other way around.
STARTUP TIP #3
GREAT FOUNDERS JUST LISTEN BETTER
Imagine coming up with a good idea, and through user testing and running pre-sale ads, you determine that there is a potential market for your new service. Instead of talking to customers and soliciting their feedback next, you instead, go spend the next 3-12 months building the service, launch it, and then crickets — poor results hit you like a sack of bricks.
What went wrong? The problem was, was that you never truly spoke with and listened to customer feedback. Why? Because it was time consuming, frustrating and boring?
Customer feedback is the secret gem of all innovation. The challenge is, if you approach it in a salesman’s typical way — trying to sell them on your ideas — you end up doing it wrong. Instead, listen without judgement. Ask “Why” 5 times to each statement to uncover deeper insights. For example, she says “I don’t really need to re-order this item that often”, then instead of you saying “Well, how about if we lowered the price by 10%, would you re-order?”, you say instead, “Why?”. Then, she explains other issues that led up to her decision not to re-order, which have nothing to do with price being too high. In fact, it had to do with your slow shipping time as she needs delivery within two days, instead of five as you currently do. By asking “Why” 5 times, we peel back layers like an onion, uncovering the core problem that’s being masked by other superficial elements. After you have solicited at least 50-200 people’s one-on-one feedback, you then implement the feedback into direct actions and build out solutions to remedy the root causes.
By asking “Why” 5 times, we peel back layers like an onion, uncovering the core problem that’s being masked by other superficial elements.
STARTUP TIP #4
READY, SET, FAIL.
Did you know that for the first time founder, a product launch represents the ultimate build-up moment to get everything just right. But for the repeat founder, a product launch represents the first of many, many revisions to get it right.
Most launches produce lack-luster results. That’s just what to expect, so temper your expectations for that million-dollar pay day launch.
Launch and learn like mad to get out all of the kinks. Then re launch! You heard me right. Pre-launching helps you get the kinks out to a small number of users (under 500) and then you officially launch and you’ve eliminated the low hanging fruit of the problems and a few biggies.
Your goal should be to learn 6 months worth of data and feedback from early users in the first 6 days.
STARTUP TIP #5
STORIES SELL. FEATURES DON’T.
There is a distinctive difference between a company that symbolizes something greater than the sum of their parts, and a company that just sells parts to people for a buck. Call it a mission, a vision, a narrative, or even a North Star — some businesses craft meaning from day one, making it a priority from launch, while others stumble upon meaning later in life. The third group, simply never makes meaning at all, just relies on selling x to y based on market demand z.
Sure, you can be successful running just about any business, with or without a narrative, but to attract the most passionate people to your company as employees, customers and partners, I firmly believe you must make and convey deep meaning to the world.
Companies that set their compass on a powerful heading, not only reach their destination quicker, but also build unwavering support along the way.
Some companies start their business by pledging to donate a portion of proceeds to charity, while others aim their product or service at ameliorating the lives of those affected by a disease or the less fortunate. They both have a built-in mechanism that drives meaning that customers can identify with and bond over. If you don’t have meaning beyond just being another coffee shop, another retail brand, another e-commerce site, you should stop and consider what your consumers might deeply care about. Often has more to do with the meaning behind the product for sale than you even realize.
Your business is your opportunity to make meaning beyond what you actually sell.
Why is your story so compelling? Would you join your startup if it wasn’t your baby?
By focusing on these five tips, you will not only prepare yourself for the mental fortitude required to weather both the high highs, and the low lows, but you will also best position your startup to create value from day one with your customers. Startups are an incredible journey that’s more akin to a 26-mile marathon than a 100-yard dash – we need to both always keep sight of the long-range vision, while also executing on the daily activities inside of the business that actually move the needle.
It has been my own personal experience that most startups fail in the mind first, and the market second. Having the right mindset that is willing to overcome every setback along the way, and still, never give up, has been one of the key strengths that has come to propel me forward in my ventures when things don’t go as planned (and they never really do). Regardless if you are running a part-time side hustle, a small to medium size business, or a venture-backed high potential company, the way to consistently win is to enjoy the journey along the way.
Entrepreneurs are artists, and their ventures are paint on the canvas – not every brush stroke means success or failure, but in totality, the art should inspire you, inspire others, and live on in a way that makes you proud to have been a part of history.
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