Starting up a new business means taking a dream to succeed and throwing yourself into uncertainty and adversity for 3-5 years. Then, if you get it right, you will become addicted to passion, innovation, and success. This is the objective of sharing these secrets of success.
Start with Big Markets
Big markets are easier to test, attack, and scale to attractive exits. If you are going for venture capital then you automatically have to consider big exits.
Small or complex B2B markets are challenging. Without enormous experience or influence you are certain to fail. Generally, the most viable markets are direct consumer or emerging markets. Products and partnership going direct to average consumers allow for testing and learning in a very large fish bowl of opportunity.
Find a Friend, A Real Friend
Start-ups are full of stresses, challenges, and problems all of which are better handled by teams than individuals. However, make sure that team is correctly balanced.
Too much high powered experience and you are all show and no go. Too much inexperienced passion and you are like hamsters partnership an exercise wheel. A start-up team is like a second family, or maybe even a first–you had better like each other.
Get Ready to Live on Pop-Tarts
Prepare for (hopefully short-term) poverty. The best start-ups are fueled by hunger. Get yourself in a financial and mental state to survive during tax period. Hunger is good for a business and better for sales–bankruptcy or homelessness is not.
Figure out what your minimum livable income is and then try to cut more. Debt elimination is the best start-up preparation. Use your current W-2 employment to build a capital account and practice frugality, before you jump to your start-up 100%.
Build Small Tests
Tests are good. Build lots of small ones. Beta early and often. See what concepts and features create enthusiasm and which draw criticism or apathy.
Don’t fall in love with ideas or software. Be willing to relentlessly scrap or archive nonperforming ideas. Archiving is a highly recommended technique. It is amazing how many ideas and concepts can be tweaked and relaunched with amazing success–becoming more compelling with market maturity and technology innovation.
Measure and Adjust
What gets measured gets improved. Start every initiative with objectives and methodology to measure. If it meets or exceeds expectations scale it. If it lags your stated objectives then make immediate adjustments. One of the silent killers of start-ups is complacency in execution.
Cut Fast, Scale Fast
When you are good at testing and measuring the, next secret feels natural–cut fast, scale fast. In any start-up, self funded or VC funded, you are resource constrained. That means you do not have the time or the money to wait for the market to come to you. Create a culture and process that is constantly making tactical course corrections.
The ultimate advice to an entrepreneur is to fall in love with no idea, plan, or assumption.
Avoid Taking Money at All Cost
Avoid investor or VC funding as long as possible. This may seem unexpected advice, but funding brings on several dangers to a young start-up:
- Dilution
- Decreased agility
- False sense of comfort
- Paralyzing fear
Once you have taken funding a time bomb begins to tick. Investors manage portfolio companies like stocks. The are constantly re-balancing their risk for maximum performance. Your timeline gets shorter and your hurdles get higher.
The longer you wait the more leverage and control you will have over your success. And, the bigger your exit will be.
Stay Small
Small has so many advantages to a start-up: agility, speed, focus, hunger, simplicity. Not to say very attractive for quick, attractive, accretive exits.
Small pertains not only to your company, but to your ideas. Narrow, simple, and focused products and services are the quickest to grow.
Be Different
You don’t have to (and probably won’t be) unique or first, but you must be different. Having competition is a given, maybe even and advantage, it gives consumers and investors a sense of comfort that it is important. Now give them the definitely reason to chose you.
Say No
Practice saying no. No to complex partnerships. No to customers with proprietary requests. No to early money. No to fear and negativity.
Bill Rice helps companies convert web traffic to buyers. He is a recognized expert, adviser, writer, speaker, and entrepreneur in online lead generation.
Bill Rice is passionate about the social web (social media), online community building, and creating online consumer experiences. Bill Rice regularly applies those passions to design and write money making lead generation projects for his clients. Tell me about your project at It’s About Conversion! or Urgent Leads.
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