Enters guy A. He’s had a business before. He’s been through it before.
One of the things he had learned is that, in business, you don’t want to create a product if it doesn’t solve a real world problem.
Excited about starting his new venture, he sets up doing research with prospective clients from day 1 (something he’s good at).
Guy A starts with an hypothesis, meets clients, gathers feedback, adapts the product and then cycles through the whole thing again. It’s the right process but, 6 months in, he realizes that what he knew best played the worst trick on him.
What he falsely assumed to be a blank starting point was actually a problem he had made up.
Guy B, on the other hand, didn’t have any previous experience. He was humble enough to learn. 6 months in, he’s ahead of the more experienced guy A.
The things we think we know are the things that are most likely to make us arrogant. Intellectual certainty is a risk. Stay humble to keep on learning and growing.
I recently read that, only about 70 of the top 500 companies of the 1950s are still around today; businesses that must have seemed rock-solid to investors back then went the way of the dinosaurs.
The market changes all the time. It’s nearly impossible to predict the needs and competitive landscape of tomorrow. In spite of the best unfair advantage, an unforeseen change in technology might mean completely new competitive dynamics (think Apple vs Nokia).
There’s many positioning and competitive advantages a business can have. Some might change, some won’t.
Focus on the things that don’t change (Jason Fried).
Everything might change around your core offering but, some desires are there to stay. People will always want faster, more reliable, better customer service, etc. Focus on what won’t change.
You have a business. It’s starting to sell products. Money’s pouring in like never before. Everything’s fine, right?
Well, it depends.
Some businesses will always be barely profitable. If your margins are slim, you can have thousands of customers yet be fighting to make ends meet. But, if your margins are good, a few customers may be enough to keep your head out of water.
Profit margins can be close to 100% of the sale price. It makes a huge difference in your growth potential, the stability of your business and your reactivity to the market.
Do your due dilligences before you start. There’s a reason why some opportunities are not worth pursuing. Some businesses will never scale and are doomed from the start. Selling is not enough.
Photo credit: Hillary Manuel
When starting a project, it’s normal to first want to do the things we’re comfortable with.
Too many teams assume that the thing they’re working on will just sell itself or that, building it is just a matter of paying a few people.
But, the things we’re less comfortable with don’t just solve themselves; a black box can easily turn into a can of worms if left for later.
Ideally, your team should be good at all of these things:
- Building a product that matches a user’s needs
- Getting funded
- Acquiring users
- Getting people to buy from you
But, if it’s not, start with the thing you don’t know, the one you’re the weakest at. Ultimately, it will be your biggest challenge (Martin-Luc Archambault).
No matter what you do when you initially set up a business, it should be about making or breaking your model. Whether you’re building a product, selling to customers or trying to raise capital, it should lead to a greater understanding of what you do.
You may have a great vision for your business but, it’s probably not complete. It may be clear in your head what you want to achieve but, if it’s hard to explain it’s not ready.
You need to understand how people perceive your business and fill the gaps in your vision. Anticipate concerns; work until feedback and issues become redundant.
Your business idea will only be ready when you’re able to express it in one simple and meaningful sentence. At this point, you’ll fully understand your value proposition, market-fit and business model.
Imagination is limited by experience, our own and our own culture’s. We don’t really create, we generally remix as it’s near impossible to create something that shares no characteristics to anything that already exists.
Constraints are set in the system; the definition of quality is all too often based on what has been proved to work in the past.
But, as much as these help, they also reinforce the existing system and limit the range of possibilities. Until… someone throws a curveball and widens the known world by succeeding with a model that no one saw coming.
Don’t believe we’re done discovering new recipes to success. The fact that something hasn’t been done before doesn’t really say anything about its potential.
School teaches you that failing is bad. There’s nothing to win by re-doing the same class over.
Work doesn’t want you to fail; you might get fired if you do. Bosses tend to give tasks to people that have already done those tasks – lower risk of failure.
Business comes with the same expectations. The myth of the hyper successful 19 year-old entrepreneur is very hard to break. If you play, you should be able to win…
But, failing is an integral part of the entrepreneurial life. Much like in relationships, there’s no single path to success. Entrepreneurs have to learn and, often times, it’s at the cost of failure.
Show me someone who has never failed – and I’ll show you someone who has never tried.
Failure is often harder to explain than it is to accept. As long as you’re learning, it’s a step on the way.
Part of what I’ve been doing over the course of last year has been looking for the perfect business idea. Through brainstorms and bouts of loneliness, I came up with a lot of very good and very bad ideas but, no perfect idea.
No sureshot. No certainty. All the best ideas seemed about equal until I tried to make them happen. Then, through committing to executing on an idea, I realized that it was either worst or better than I thought it was gonna be.
Ultimately, an idea’s potential is really your potential to make it happen. Proper execution can make or break any idea (37 signals).
Asking yourself which idea is the best is futile. Instead, ask yourself, which idea can I execute best. If you have a genius idea worth millions, you’re probably not second-guessing yourself enough… Think again, it’s not worth that much if you can’t make it happen.