Startups have never had it easy. Big businesses hate disruption, and when a new company starts doing things differently, established players do everything they can to steal the ideas and squash the competition.
PepsiCo, for example, has mechanized the process. Through its partnership with Black Swan Data, PepsiCo hopes to identify trends before they become, well, trendy and beat would-be disruptors to the punch in an effort to compete with its smaller competitors. This is because, as PepsiCo leaders suggest, smaller businesses are better able to keep up with trends.
Fortunately, startups don’t have to let big players such as PepsiCo steal their advantages without a fight. The biggest companies have the deepest pockets and the most service lines, so small companies must focus on niches, becoming industry specialists and offering nimble customer service.
Old-fashioned relationship building is the key. Most big players rely on dial-up customer service, but they don’t make in-person visits to facilities and events. Startups excel in the trenches where big companies don’t bother to go. Through superior customer service and personal relationships, startups can provide something that no big company can match.
The trick for small companies is to act like a small business while demonstrating the power of a larger one. By using the right combination of tactics, startups can not only survive in this cutthroat environment, but also thrive.
1. Always respond to prospects quickly and personally.
Smaller companies differentiate themselves from big ones through faster, more in-depth human communication. One company recently sent me a form email about buying a list from a database. I sent back my interest, but only received a second form email in response — one that didn’t even answer my questions. If a real person had emailed me back with answers to my specific questions, that company likely would have earned my business.
Whether in person or on the phone, respond quickly and personally to maximize the small business charm. Companies of all sizes have adopted automated software for marketing, but relying on automation loses the personal touch that differentiates small businesses from corporations.
If a consumer demonstrates interest in an automated channel — such as an email or ad — the worst way for a small company to respond is with an automated reaction. When we notice a prospect engages with one of our digital platforms, we have a person reach out to acknowledge the engagement and request a call.
2. Don’t solve unique problems with standard solutions.
Big companies fit clients into preset boxes. Smaller companies can be nimble in their ability to customize offerings to match specific needs. That’s why PepsiCo wants to stay on trend: to compete with smaller, more agile brands. Startups should take advantage of this by providing more specific service to customers who would fall through the cracks at larger entities.
One of our clients, Toyota Forklifts, chose our small company over plenty of bigger options for this reason. Toyota needed specific help that no one offered. Rather than go with “good enough” from a big provider, Toyota asked us how much it would cost to hire the people we would need to power the new program. That’s an uncommon level of customization, but our small size allowed us to rework our internal structure to meet a need no one else could.
3. Keep the face of the company familiar.
Big companies have big sales teams and lots of people who interact with clients. Small companies have only a few, but this can be a strength. McKinsey found that maximizing customer satisfaction through a consistent customer journey can potentially increase customer satisfaction by 20 percent and boost revenue by 15 percent. Keep the point of human contact as consistent as possible so prospects feel that they’re dealing with a person — not a brand.
While startups use personal service to get in front of clients, big companies invest in technology so they don’t have to. Keep personnel the same through the inquiry, proposal, launch and implementation phases. Customers will feel more valued if they are not being shuffled from one department to the next.
Originally posted on Entrepreneur.com by Jeff Coffman
Problem-solving is one of the most important aspects of entrepreneurship. As both the founder of your organization and the leader of your team, you’ll be responsible for identifying and solve problems of your customers, partners, employees and your company, in general.
The question might be posed as to whether successful entrepreneur-problem-solvers use their natural talents to find success, or whether those skills are cultivated after years of experience. But, either way, I would maintain that successful entrepreneurs think about and solve problems differently from most other professionals.
How is this problem solving process distinctive, and how can you apply that difference to your own work habits? And what’s different about entrepreneurs-as-problem-solvers in the first place? Here are six ways:
1.They identify problems first.
Some people think of entrepreneurial types as creative inventors; given a blank canvas, they can come up with a product that people will love. But that’s not usually the case. Instead, the most successful entrepreneurs are those who first identify a key problem in the market, then work to solve that problem.
Airbnb, for example, started when its two founders, Brian Chesky and Joe Gebbia, realized that two problems existed in the same business area; one, they themselves were having trouble affording rent in New York; and two, nearly all the hotel rooms in the city were consistently booked. Those founders didn’t come up with their idea out of thin air; they recognized two key problems, and devised a solution to solve both simultaneously.
2.They stay calm.
According to a study by TalentSmart, 90 percent of top performers are able to manage their emotions successfully when they experience high levels of stress. This isn’t a coincidence: When you allow your emotions to get the better of you when facing a problem, you subject yourself to reactive decision-making, and lose touch with your logical side. Accordingly, you make poorer decisions, and in some cases, may look bad in front of your employees.
Of course, “staying calm” when you face a major issue is, itself, a major issue. It takes years of practice and self-discipline to learn how to prevent your emotions from taking over. You need the kind of perspective that only high-stress experiences can give you. That perspective? No problem, by itself, is unconquerable or incapable of being solved through alternative approaches.
3.They start with the general and work toward the specific.
When addressing a problem, most people get caught up in the details, but successful entrepreneur-strategists tend to think about problems more generally before working down to the specific details. For example, if entrepreneurs’ cars break down on the side of the road, they aren’t immediately concerned with the peculiarities of the engine that led to its malfunction; instead, they recognize that the car isn’t drivable, and work to get it to the shoulder — and safety.
This approach helps you see the high-level nature (and consequences) of your current problem, giving you a reliable context for solving it.
Successful entrepreneurs are also willing to adapt to solve a problem; they aren’t beholden to the image, processes or lines of thinking that got them into the problem in the first place.
For example, Nokia — probably best known as the top cell phone provider in the world between 1998 and 2012 — started out as a paper company that later transitioned to producing rubber tires and galoshes (as the needs of its customers changed). When the demand rose for military and emergency service radio phones, Nokia transitioned again and started making those devices, eventually selling off its paper and rubber divisions.
In short, faced with changing available resources, market demand and competition, Nokia reinvented itself rather than remaining stagnant or applying old rubrics to new problems.
5.They delegate and distribute.
Entrepreneurs also know they aren’t the most effective problem-solvers on their own; instead, most problems are best handed over to specialists who better understand those problems. Accordingly, when an entrepreneur faces a tough decision or a difficult situation, he or she typically delegates the judgment needed to an expert and calls in help to carry out that expert’s solution as efficiently as possible.
Entrepreneurs also aren’t afraid to delegate authority to the internal hires they trust, and aren’t hesitant to spend money on external firms and consultants if that solution will solve the problem faster and more efficiently.
6.They measure outcomes and reflect.
Successful entrepreneurs actually do more than just solve the problem. After applying a fix, they spend time measuring the results of their efforts with analytics tools, and reflecting on those outcomes. Learning from the approach they’ve chosen, whether it turns out to be a success or failure, is what equips them to make even better decisions in the future.
So, if you aren’t an entrepreneur in your own right, there’s much you can gain from adopting the problem-solving tactics of someone who is — someone who’s a success at both entrepreneurship and decision-making.
Applying different modes of thinking and new leadership styles, and being open to more potential problem-solving options are the strategies that will help you solve problems more thoroughly, and reap better long-term results.
Originally posted on Entrepreneurs.com by Jayson DeMers
With more than 100,000 papers published on nutrition in the peer-reviewed medical literature each year, it’s hard to keep up. And for every positive effect, there was a reported negative one, or a case study showing an adverse response to the plan. One minute, scientists say carbs are bad; the next they proclaim that carbs are good.
Any meal plan must be personalized to ensure we each have the energy we need to not just feel good but feel great, and have the energy to pursue our goals and navigate this minefield called life. This personalization will increase the likelihood of successfully following the plan and eating in a way that benefits us.
But regardless of the dietary protocol you choose, to improve mood, memory and drive, the following are a few key factors that must be included and then tweaked to match your individual response to various foods:
Remove sugar and processed food from your diet.
This will help rid the body and brain of toxins and inflammation.
Eat foods that increase your microbiome’s diversity.
This includes fermented foods that populate your gut with healthy bacteria (e.g., pickles, kimchi, unprocessed yogurt, and kombucha). These foods are rich in prebiotics. Prebiotics feed probiotics and encourage the growth of healthy bacteria. Prebiotic fiber is a type of carbohydrate that we do not digest, but our gut bacteria thrive on and you can supplement your diet with a prebiotic fiber. This has been particularly useful in curbing my afternoon cravings — I no longer experience a midafternoon crash as a result, and it helps me maintain my weight by preventing me from snacking too much.
Eliminate foods that cause you discomfort.
includes any food you’re sensitive to that causes constipation, diarrhea, sluggishness, brain fog, headaches, fatigue or mood changes. For greater insight, have a food sensitivity test done.
Repopulate your gut with healthy bacteria.
You can do this by consuming the right kind of probiotics.
Fuel up with fats.
This can help curb your cravings and reduce the midafternoon energy slump.
Eat anti-inflammatory foods.
This includes green leafy vegetables, beets, blueberries, bok choy, broccoli, celery, chia seeds, coconut oil, flaxseed, ginger, pineapple, salmon, turmeric, and walnuts. Exclude any foods that cause you sensitivity.
Eat diverse organic fruits and vegetables.
This will increase microbiome diversity and promote overall gut health.
Drink filtered water.
Much is still unknown about the impact chemicals like chlorine can have on our delicate gut microbiome. Filtration is crucial regardless of where you live to prevent unnecessary exposure to toxins from rusty pipes or compromised water supplies.
Switch trans fats and vegetable oils for olive, avocado or grapeseed oil.
One study found the participants who took in the most trans fats increased their risk of depression by 48 percent. Trans fats are often hidden in highly processed foods at the supermarket and used to deep fry food at various fast-food chains.
Consume more omega-3 and less omega-6.
Both are essential fatty acids important for good health, but we need them in the right balance to help protect our joints, pancreas, heart, skin and mood stability. Too much omega-6, which we consume in corn and vegetable oils, can cause the body to retain water and raise blood pressure, which could lead to blood clots, thus raising the risk of heart attacks and strokes.
Consume foods with antifungal properties.
This includes cayenne pepper, coconut oil, garlic, ginger, lemons, limes, olive oil, onions, pumpkin seeds and rutabaga to help fight off bad gut bacteria. Don’t consume any foods that you’re sensitive or allergic to. Find substitutes that work for you.
Keep activated charcoal on hand.
Activated charcoal can assist by binding itself to toxins, which are then excreted by the body. Activated charcoal has been used for years in emergency rooms for certain kinds of poisoning, including alcohol. It helps prevent the poison from being absorbed from the stomach into the body. It can also assist with gas, bloating and even lowering cholesterol.
Practice intermittent fasting (IF).
It’s widely reported that IF is effective for weight loss, inflammation reduction and boosting brain power by increasing ketones. It’s a pattern of eating, not a diet. It doesn’t change what you eat so much as when you eat. Instead of consuming food all day long, you eat within a set window of time. The most popular protocol is to eat for eight hours per day and fast for 16. According to Mark Mattson, a professor of neurology at Johns Hopkins University, fasting has been shown to increase rates of neurogenesis (the growth and development of new brain cells and nerve tissues) in the brain. Higher rates of neurogenesis are linked to increased brain performance, memory, mood and focus. It has also been shown to boost production of BDNF (brain-derived neurotrophic factor). BDNF is considered “Miracle-Gro for your brain” and plays a role in neuroplasticity, which makes your brain more resilient to stress and adaptable to change.
By following these easy-to-apply guidelines, you’ll begin to notice a significant change in your energy levels, as well as your mental clarity.
This excerpt is from Ben Angel’s book Unstoppable: A 90-Day Plan to Biohack Your Mind and Body for Success.
Are you the type of person who can’t sit still? Every time you go out with friends and family, do you start talking with everyone you see and meet? Do you love to read the news, books and articles of people who inspire you? If you identify with some of these statements, you’re a natural entrepreneur.
Entrepreneur in detail.
Being an entrepreneur can have different meanings to people. Some people imagine starting up their own shop. Others dream of starting a large business chain. Either way, you would be starting your own business. But in order to have that business, you need to have an idea behind it that fuels forward movement. Although having a great idea is just one part of becoming an entrepreneur, there is a misconception that an idea is all you need. When launching a business from scratch, one of the many things you need to know is who your audience is and who will be interested in what you’re selling.
An article published in Business News Daily explains it best — “An entrepreneur is someone who can take any idea, whether it be a product and/or service, and have the skill set, will and courage to take extreme risk to do whatever it takes to turn that concept into reality and not only bring it to market, but make it a viable product and/or service that people want or need.”
Characteristics of an entrepreneur.
There are a variety of different articles, like the one mentioned above, and books regarding entrepreneurship. All of them agree that there are many common traits that all entrepreneurs share. Some of these traits are:
You’re self-motivated, confident and proud of yourself.
You don’t like it when people tell you what to do because you like calling the shots.
You’re very competitive and like setting deadlines for yourself.
You negotiate whatever you can, and you follow up with people when you want something.
You don’t dwell on the past, and remove things that don’t work for you.
You come up with ideas and point out flaws in other ideas.
You are not afraid of working hard and like to get involved with different things.
Time management is the key skill set.
Having a great idea and executing it at the right time is crucial. This is one aspect of becoming an entrepreneur that most people overlook. What if you have the right idea, but it’s the wrong time to start working at it. You need to measure out, take baby steps, and assess your position into starting a new business. As part of owning a business, risk management is an essential factor — and having a strong balance is the most important.
Dedicating your full attention to starting up a business is another factor that is often ignored. You need to be fully willing to commit some “me time” and “family time” in order to nurture and grow your business. It will be a great sacrifice that you will have to take, but in order to have a successful business, you need to make this commitment.
You can’t slow down. This is a 24-7 job you want to have, and that means procrastination is not in the cards. When an important decision comes up, you need to assess strengths and weaknesses, make a conscious decision, and move forward. Remember to always trust your instincts.
It’s never too late to start in the entrepreneurship game. Author J.K. Rowling started the Harry Potter craze later in life. She published 7 books, and all of them became box office films. Starting a business later in life offers numerous benefits. You’ve had experience, and experience that comes with age can help you see different situations under a new light.
Entrepreneurship is not a maybe thing. You know when it’s time to stop working for that company or that job that you don’t like, and create the job that you love. Taking the first step by deciding that you want to have your own business is easy. What comes after is a learning curve that all successful entrepreneurs know. For you, failing will not stop you. You will take it as a learning experience and will find a new challenge in doing so.
It’s important to remember that age is not a factor in starting your own business, but time is. Timing in this industry is everything. You need to have a plan, and set out to accomplish each task you give yourself. Having a support system is very important for those crucial and desperate situations you will encounter.
Originally posted on entrepreneur.com by Rocco Baldassarre
For many entrepreneurs, the process of launching a company begins with the light bulb moment when they conceive of a breakthrough idea for a new product or service. Very often, they are so passionate about the idea that they believe its merits will be self-evident to prospective customers—that the innovation is so obviously superior it will sell itself. Entrepreneurs who avoid that delusion may think of their initial sales as a chicken-and-egg problem: They realize that getting buy-in from potential customers is a top priority, but until they design and build the product (which often requires securing funding, assembling a team, and many other tasks), how could they possibly make a sales call?
Both attitudes fail to recognize a simple fact: Salesmanship is central to the success of any young company, and entrepreneurs ignore this at their peril. Yet many do ignore it, in large part because they have little sales experience and have probably not taken classes in how to sell, even if they have formal business education (as Suzanne Fogel and colleagues explained in “Teaching Sales,” HBR July–August 2012). For those in search of guidance, the research and advice on salesmanship may not offer much help: The vast majority of techniques, models, and strategies are aimed at large, established companies, not start-ups, which tend to face a unique set of objections from prospects. And when entrepreneurs get around to making those crucial first sales, they often make common mistakes, such as not considering the strategic advantages of a particular customer or extending a deep discount just to make the sale.
In our study of entrepreneurs in Hong Kong, Kenya, Mexico, Nigeria, the United Kingdom, and the United States, we shed light on how they approached the task of making their first sales and what they wished they’d done differently. In all, we spoke with 120 founders, more than half of whom had previous start-up experience. In this article, we examine the mistakes they cited most frequently, explore the objections they faced when they began making sales calls, and present an alternative sales model uniquely suited to a start-up’s circumstances.
Regrets, We’ve Had a Few
The founders we interviewed cited the following five missteps most frequently:
More than half our interviewees fully developed their products before getting feedback from potential buyers. In hindsight, most viewed this as a mistake, echoing one of the mantras of Eric Ries’s “lean start-up” philosophy: Get in front of prospects from day one. As one CEO told us, “You’ll learn more from talking to five customers than you will from hours of market research [at a computer].” The goal should be to gauge customer reaction to the general concept you plan to build. “Don’t make anything until you sell it,” advised one entrepreneur. “Get people really interested in buying it before you invest too much time and effort.”
Failing to listen.
Even founders who started selling early said they were too focused on convincing prospects of the new product’s merits and not concerned enough with finding out what prospects thought of the idea. Some realized that their passion and ego made them respond negatively to criticism and discount ideas for changes that they later saw would have increased the marketability of their offerings. “Listen to the feedback from the customers and reshape your idea and your product to fit what they actually want,” one interviewee advised. Another described the process this way: “It’s really all about understanding what the pain point is in the marketplace, and the best way to do that is to talk to prospects and validate, validate, validate your idea.” As one U.S. entrepreneur who had approached the task correctly said, “The goal of our demo was not only to explain what we do but also to give the illusion of explaining what we do, while we really tried to extract information about their business and how we could help them.”
Some founders realized that their passion and ego made them respond negatively to criticism and discount ideas for improving their products.
Faced with pressure (from themselves or their VCs) to make early sales, many founders offered price discounts in order to close initial deals—often establishing unsustainable pricing precedents with those customers. Worse yet, news of the discounts spread around small industries, crippling the ventures’ long-term pricing power. In retrospect, the entrepreneurs wished they had found alternative sweeteners to close early deals—free shipping, say, or a discount on orders placed before a certain date. And if you’re going to offer temporary discounts, they told us, it’s smart to put the terms in writing.
Selling to family and friends.
Making early sales to family members was especially common among entrepreneurs outside the U.S. and for those in the restaurant, clothing, and wealth management industries. But you never know why relatives are buying from you—often their motivation is love, pity, or a sense of obligation, not compelling product quality. In retrospect, founders believed those sales created a false sense of validation and that they would have been better off pursuing arm’s-length transactions with customers who would have given them candid feedback.
Failing to seek strategic buyers.
For cash-strapped entrepreneurs with no sales record, the thrill of getting the first “yes” can blind them to other considerations. Can this customer open new doors or provide referrals? Can the customer supply usage data that could make my value proposition more compelling? Some of the founders we interviewed wished they had conducted a strategic assessment of their first buyers. Others chose their first clients deliberately in order to get feedback, perform beta testing, get referrals, or guarantee repeat business. These strategic first sales often led to long-term success.
Sorry, You’re Too Small
As they looked back on their nascent sales efforts, the entrepreneurs we spoke with described a long series of hurdles. Many had problems developing lists of prospects. Once they had identified likely targets, they faced obstacles in getting past gatekeepers or securing appointments. (This is especially problematic in Latin America and Africa, where most people won’t pick up the telephone if they don’t recognize the number displayed. In those situations, founders needed to find acquaintances who could make referrals simply to secure an appointment.) Some entrepreneurs described difficulty articulating precisely what made their product or service different from the alternatives. When they did make a sale, several suffered because no one in their venture was responsible for accounts receivable. “I realized I had to collect when I ran out of cash,” reported one Mexican founder. “At times, three or four months would pass without invoices being sent to customers, because I was not well organized.”
The biggest problem with the actual mechanics of selling, however, was handling the objections of potential customers. Our interviews revealed five categories of objections, most of which are different from those faced by salespeople in established firms.
Potential customers were consistently skeptical about the ability of new products to deliver on their value propositions. Some entrepreneurs could show results from beta tests or independent lab results, but that wasn’t possible for all products and services. In those cases, offering samples or free trials often proved effective. One of our subjects, the founder of a furniture reupholstering business in Mexico, made an early sale by eating lunch in one of his market’s largest hotels. At the end of the meal, he asked the restaurant manager to introduce him to the facilities director, who came to the table. The entrepreneur showed him the worn fabric on the chairs and offered to refurbish two of them for a small fraction of the replacement price. Once the facilities director saw the finished chairs, he talked the business up at meetings of his professional association, leading other big hotels to place orders.
Prospects also expressed doubt about a new company on the basis of the founder’s age, gender, personal background, or experience level. Founders with relevant experience highlighted that; those who lacked it touted partners or board members with solid industry reputations. The founder of a Nigerian outsourcing company described the process: “The first resistance had to do with the company being very new, but I conquered that by showing that I’d been in this kind of business for years before venturing out solely. Then they looked at my board composition and felt the directors were credible enough—and they had confidence in this young company. That gave them the needed boost to say, ‘OK, let’s just have a go.’”
One founder we spoke with summed up this pervasive concern: “How do you make the prospect comfortable with the fact that your company is small?” There is no easy answer. Many founders highlighted a key benefit of their company’s size: the fact that customers were dealing with the CEO instead of a sales rep. For companies selling physical products, quality and value helped dispel concerns. Ultimately, though, overcoming objections about size required founders to develop trust with prospects and to take steps to reduce the risk of dealing with a start-up. For instance, some founders did not ask for a deposit from their earliest customers but instead used a pay-on-delivery model until they achieved a track record.
Salespeople from established businesses often field complaints about price, of course, but start-ups reported that their prospects were especially likely to push back on pricing because they knew the entrepreneurs were eager to make early sales. In fact, several prospects stated directly that they expected significant price cuts for becoming early users. Some entrepreneurs walked away from those deals, some gave discounts, and others pushed back.
Price objections often stemmed from prospects’ incomplete, biased, or subjective cost/benefit analyses, so savvy founders developed tactics to counter these. For instance, a Mexican start-up pitching digital record keeping to large organizations consistently met with executives who failed to account for the real estate and labor costs of storing a large amount of poorly organized records in a back office. Over time, this company’s founders became adept at calculating those costs to illustrate the value of their service. For entrepreneurs who believed their prices were fair, a price objection could indicate that they were failing to adequately describe the offering. “Usually when prospects said they couldn’t afford our service, I interpreted it as they didn’t want it or didn’t understand it,” a founder told us. “That meant we had to go back and do a better job explaining our service and how we could add value.”
To adopt a new product or service, prospects might need to modify their routines, procedures, systems, or internal or external relationships. Making such modifications to switch to a new, untested offering can seem especially costly, but buyers do not always verbalize these concerns. To address tacit objections about switching costs, the entrepreneurs we interviewed took it upon themselves to ask questions that would lead prospects to talk freely. One U.S.–based start-up that produced a mobile app to help people make restaurant reservations recalled a key problem at the time: “Most restaurants don’t have a computer at the front desk, and so we had to address that. The managers said, ‘Well, we’re not really looking to change the way we do things.’ Restaurants are pretty slow to change.” The founders won managers over by showing them projections (based on beta tests) of how revenue would increase as customers became able to manage their own wait times.
A Sales Framework for Start-Ups
Existing frameworks for selling are focused on established companies. They almost always assume that the salesperson has a fully developed product, and they have a simple goal: to make a sale. While these models advise reps to listen to prospects in order to anticipate objections or gain insight into the organizational dynamics that drive decision making, they generally do not account for the fact that information gleaned during the sales process can be crucial in designing (or redesigning) the product itself.
On the basis of our interviews with company founders, we have constructed an alternative model that’s far more suitable for start-ups (see the exhibit “An Entrepreneur-Friendly Sales Model”). It calls for engagement with prospects as soon as an idea is conceived—and long before the product is actually created. The goal of these meetings is to obtain market intelligence not only about product design but also about promotion, distribution, and pricing strategies. After a round of these meetings, an entrepreneur should ask if the idea really has strong and broad appeal. The answer to that question should determine whether the entrepreneur jettisons the idea, returns to the drawing board, or proceeds to develop a prototype, obtain conditional commitments from prospects, generate more leads, and engage in other traditional sales activities.
Research has shown that it’s easier to get people to commit to an idea if they are involved in its creation. By engaging with prospects early, founders can not only gather feedback to improve product design but also increase prospects’ involvement in the process, thus raising the odds that they’ll purchase the offering.
This model may also ease the challenges entrepreneurs face in getting appointments with prospects. If founders present the appointments as occasions to discuss products that don’t yet exist—not as sales calls—prospects may be more open to them. In general, people are more willing to give advice than to listen to a sales pitch. Entrepreneurs can use that dynamic to their advantage.Start-ups face many challenges, and entrepreneurs must wear many hats during the process of launching a company. It’s no surprise that they often postpone selling (or otherwise engaging with customers) until they’ve already created and begun producing their offerings. Our research demonstrates, however, that early customer feedback is essential and that founders who fail to consult with customers soon after the light bulb moment will ultimately come to regret it.
Originally posted on Harvard Business Review by Vincent Onyemah, Martha Rivera Pesquera and Abdul Ali
The part of every entrepreneur’s DNA that allows her to dream big and envision a world where her creation impacts countless lives and generates incredible wealth is the very thing that can lead to failure. Especially in the early days of working on something, every new opportunity can feel like the one that will change everything. Many founders get caught in the cycle of chasing shiny objects, but when resources are limited and it’s a race against time this can be detrimental. Here’s how you can avoid this classic entrepreneur’s dilemma.
Stay focused on the path of least resistance
Some problems are inherently harder to solve, some markets are more difficult to compete in, and some customer segments take longer to educate and convince of your value proposition. Serial entrepreneurs know this all too well. You can spend months, even years trying to generate revenue for one business and then start another business with money and customers in the first 4 weeks.
Paypal started off as a company called Confinity that allowed people to send IOUs from Palm Pilot to Palm Pilot. The relatively niche market didn’t adopt their technology fast enough, so they pivoted to creating a payment system aimed specifically for the web so that one person could email money to another. People were just starting to spend more money online with the rising popularity of ecommerce sites like eBay, making this demographic an easy target for Paypal.
Especially if you’re trying to gain early revenue traction, it’s easy to fall into the trap of attempting to sell to any customer that will buy. The truth is, some customers are a better fit, both in terms of revenue opportunity and cost, and thus are more important to spend your time on. Others can seem promising but will never actually materialize into real revenue. Double down where you think you’re likely to have the most traction and ignore everything else – it’s a distraction.
Stay focused on where you can build value the fastest
Surviving the early days means creating massive value for a specific customer segment whose pain is not being addressed. You might have a big grandiose vision of how your company will change the world, but you will not win by trying to solve everyone’s problems.
Apple didn’t start by creating products that can be used by anyone – they first built for computer hobbyists that loved to tinker with electronics. Amazon wasn’t always a place where you can buy almost any product imaginable. They first focused on disrupting the online book sales market.
Almost every successful business started off doing something niche. Figure out an area where you can quickly create value for your customer that your competition is ignoring, and avoid working on things that aren’t critical to this goal.
Recognize When Something Isn’t Working
This sounds contrary to the idea of staying focused on one main path, but it’s equally important to recognize when something just won’t work. Entrepreneurship is full of ups and downs, and it is true that sometimes you can spend months grinding away at something without a reward. However, if you go too long without experiencing any ‘wins’ it can be very difficult to keep moving forward. More importantly, it can be a sign that you need to course correct.
It’s difficult to admit that you’re wrong, especially when you’ve invested a lot of time into trying to make something work, but it’s even harder if you’re forced to admit defeat and close your business because you’ve wasted too much time doing the wrong things. Change something about your approach if you’ve been fighting an uphill battle for too long, whether it’s your core value proposition, target customer base or customer acquisition channel, and hopefully you’ll finally start to see some positive indicators.
Simon Sinek wisely said that “vision is a destination – a fixed point to which we focus all effort. Strategy is a route – an adaptable path to get us where we want to go.” Your strategy will change as you learn new information while working toward your goal, but your vision should stand firm, unaffected by distractions that might come your way.
Originally posted on Forbes by Sergei Revzin and Vadim Revzin