I spent a lot of time studying entrepreneurship in 2011 and there were a number of great tidbits of advice that I collected along the way, that didn’t necessarily make it into a blog post of their own. As I reflect on a year now gone, I picked my favorites for this top 10 list:
1. Disruptive Change – Look for an opportunity to turn convention on its ear and provide extreme value in the process. For example, Software as a Service has been a particularly disruptive force in the software field, making it possible for cash-strapped small businesses to get the same powerful software that enterprise pays hundreds of thousands for, at a price of $50 per month. When you offer that kind of value and open up a new audience in the process, you can’t fail.
2. Be Demand Driven – Too many entrepreneurs, particularly artisans skilled in a given craft, start a business by asking supply-driven questions “what can I do?” or “what do I want to do?”. But this has led to a saturation of certain obvious products and services. This is perhaps no better illustrated than by looking at actors in Hollywood. Instead, focus on asking demand-driven questions such as “what does the World really need?” or “how can I help?”.
3. Look For Less Obvious Opportunity – I once heard someone say “do things that aren’t cool in California”. The point is that tech entrepreneurs are all in California and consuming the same culture and thus they’re all going to gravitate to the same things, like Internet marketing, mobile and cloud-based platforms. But there is a whole world of opportunity virtually untouched outside of this tech culture. Generalizing this advice a bit, I think the point is to get outside of your comfort range and look for bluer waters, when possible.
4. Aim Big – We create our own limitations. The odds of succeeding are just as low if you aim for something huge, as if you aim for something small, so you might as well go big! Well, that’s the theory anyway. I personally believe certain pursuits are much less likely to pan out than others, but I can see the point here, to go big in what ever direction you validate as a good opportunity.
5. Build Distribution Into the Product – You cannot build a product and decide after the fact “we are social company” or “now let’s SEO optimize”. Its much more effective to determine your marketing channels up front and built these things into your DNA. If you’re a social content site, built social features deep into the fabric of the site; don’t just task on share buttons as an after thought, or it won’t work.
6. Create a Positioning statement – Don’t waste time creating an in-depth business plan. It will make too many assumptions for the outcome to be possibly predictable. Instead focus on what really matters – how will you position your product or service. What are you building, who will you sell to, and what makes it unique?
7. Up-front budgeting – The majority of your early budget should be spent on marketing and market research, not product development. As far as product goes, focus on a minimally viable product and how you can build it as cheaply as possible. DOn’t worry about getting it perfect as your assumptions will change once you’ve found product-market fit.
8. Work For Free! – When trying to start a services company, it is crucial to be associated with the right brands; “everyone wants to date up”, so to speak. If a prospective client sees that you’ve worked for lesser companies, it will make them feel you’re not going to take them to the next level. Thus, do what you must to associate with high end brands from day one; work for free if you must. The investment will pay off in the end. And while this might go against most conventional wisdom for a services business, consider that most product business must invest sunk cost to develop a product on day one. Consider this a similar sort of investment.
9. Price So That Value Exceeds Cost – The best way to see positive word of mouth spread about your product, is to make sure your customers or clients receive more than they pay for, or at least it is perceived as such. This is what people mean when they say “I got a good deal”. It is also consistent with the idea of value creation. Try to find a way to ensure your customers are getting good value, not on the amount of money you’re extracting from them.
10. Sell a Story, Not a Product – If you’re selling product or service that isn’t 100% unique, you’re doing yourself no favors by positioning yourself as a commodity that is easily price compared. Instead, focus on listening to the need of the prospect and sell the value of the solution; specifically how your product or service solves their problems.