When you first begin working on your start-up the temptation is to believe that as long as you have a sound product, then you will find start-up success. Unfortunately, this Field of Dreams “if you build it, they will come” approach doesn’t always hold true, and there are many other challenges and distractions that will be competing for your attention.
So where should you really be starting? We’ve been talking to top entrepreneurship professors and consultants to explore the key things you need to think about from day 1, to ensure you are building a start-up business with a solid and successful future.
Find customers willing to pay for a solution:
“These days, many entrepreneurs think the first thing they should do is raise some capital, often from the proverbial 3Fs: family, friends, and fools. These sources invest for one simple reason – they love you! Their support is not an indicator of future success.
So, what’s a better first step a budding entrepreneur should take? Easy. Find a customer and convince them to pay. That’s what 19-year-old Michael Dell did from his University of Texas dormitory room. He asked small businesses to pay in advance for the new PC they wanted. With his customers’ cash in hand, Dell was able to buy the parts and assemble the PC to his customers’ specification.
In fact, the vast majority of fast-growing companies get their start this way: identify a compelling customer problem, and ask the customer who has that problem to pay you to solve it. Partial or full payment up front, please. Difficult, you say? Perhaps. But if the problem is compelling enough, and you’ve got the best solution, the customer will pay. And if they won’t? Maybe that’s good information to have early on. As renowned VC investor Vinod Khosla famously remarked, “No one will pay you to solve a non-problem. No problem, no business.”
John Mullins is an associate professor of management practice at London Business School and author of The New Business Road Test: What Entrepreneurs and Investors Should Do Before Launching a Lean Start-Up (fifth edition 2017).
Learn to sell, or find someone who can:
“I have consulted for many years and written many books on business strategy and planning, and my most recent book boils strategy down to just three essential components: understand your market, gain a competitive advantage and manage business risk.
And yet that perhaps glosses over the one major lesson I wish I had known when I started my business. No matter how excellent your product or service, you don’t have a business unless you can sell it.
And if you are no good at marketing or selling, then find a partner who is.
You may have honed your offering so that it serves a distinctive gap in the market and you feel certain that there is a market to be had in the gap, but if you cannot alert your would-be customers of your existence, in the first place, and then of the benefits of your offering as opposed to those of the competing alternatives, your business plan will become history in no time at all.
The first thing that every entrepreneur should do is learn to sell.”
Vaughan Evans is an independent consultant specialising in strategy and business planning. His latest book Strategy Plain and Simple: 3 Steps to Building a Successful Strategy for Your Start-up or Growing Business (FT Publishing) is out now. For more information go to www.vaughanevansandpartners.com.
Find purpose, ask yourself why you are doing this:
“Think for a moment about WHY you do what you do?
Most people, when asked WHAT they do, can speak about it at length. They might have a quick answer, and when pressed, will give you tons of details about the logical, technical, and procedural aspects of their job or business. You are probably the same. We don’t have any difficulty at all with our WHAT.
But let me ask you something different:
WHY do you do it? What’s the purpose behind it? What made doing WHAT you do, so compelling that you had to do it?
The problem with answering those questions for many people is that either they aren’t sure, or they’ve completely lost touch with their reasons over the years.
In adulthood, we lose the idealism that drove us when we were younger; the illogical excitement of doing something just because we’re really excited by it. There’s good and bad in that, of course. Idealism isn’t the best platform upon which to make big decisions, in the real world. However, the spirit and passion that drove that idealism are very real and whether we admit it or not, it still forms part of our decision-making today.
We are moved by significance. When you’re able to answer not just WHAT you do, but elaborate the reasons WHY you do it, feel a rush of excitement, passion, and deep-rooted emotional connection as you speak about it, that’s one of the most compelling feelings of all.”
Royston Guest is a global authority on growing businesses and unlocking people potential. He is CEO of Pti-Worldwide, author of #1 best-selling business growth book, Built to Grow, now available on audible and founder of Built to Grow Mastermind programme. For more info see: https://www.roystonguest.com
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