Entreprenurial Blogs II – Starting A Start-Up
Starting a start-up is considered by many to be one of the most difficult and fearful tasks that exists. The major hindrance, as seen in Entrepreneurial Blogs I – Don’t Be Afraid To Dream, is the steady paycheck (or lack of it) which comes with being the person behind the wheel rather than in the passenger seat. Here are a few simple tips and strategies to cook your broth for success, written out of inspiration from all the companies I have seen grow and flourish, which I hope come in handy to fellow start-up aspirants.
Recently, a friend commenced a project on his idea for a web start-up, which provides desktop and laptop repair services to clientele in the city. After a few initial months of success and a considerable profit margin which is paying back his initial investment, he now claims to be a successful entrepreneur. A major point here is to know or learn the difference between a business-owner and an entrepreneur. After all, it is important to know what you want to prepare before you start working on your recipe. The importance of knowing what category of the two one falls into is a key point in ensuring success- for the company and for oneself. An entrepreneur would be mainly concerned with innovating and inventing new technologies as well as finding new ways to revolutionize and change the world. They enjoy risk and tend to juggle many balls at a time. A business-owner, on the other hand, is mainly concerned with profit margins, costs and revenue projections. They love security and tend to focus on a single ball to play with. They are more sentimentally attached to their start-up.
However, regardless of the category one falls into, developing and selling a product/service is an arduous task and requires gallons and gallons of effort and time. Two general approaches or ideologies are adopted for the development of any product/service. However, as Robert Kiyosaki said – a single approach doesn’t always fit it all. The ‘product-oriented’ folk focus on developing a product/service so brilliant that it will sell itself and people are going to want to buy/use it regardless of other factors. The ‘service-oriented’ folk, on the other hand, focus primarily on the requirements of the customer and put in massive amount of their effort and time on ensuring that the client’s current needs and problems are satisfied. However, along with the advantages that accompany each of these approaches, certain drawbacks come into play too. A product-oriented approach can often deter the focus of attention to only the product. Ignoring the client is a recipe for disaster (much like forgetting to add salt to your recipe) where any start-up is concerned. Also, the vision and future of the product often tends to exceed the realms of what is feasible. Finally, one cannot expect each and every product/service to sell itself. On the other hand, a service-oriented approach tends to focus only on ‘now’ and not on ‘what’s next’. Most businesses have their ‘hot phase’ and ‘expiration phase’. In such a case, development for the future becomes a must. Focusing all the company’s resources only on the ‘now’ will often, ironically, lead to its collapse. A recipe for success would be to have a healthy fusion of the two approaches which requires clean and open collaboration and co-operation of the technical and business teams who are all striving to meet a common goal: sweet, sweet success. From an educational point of view, MEM graduates (Master of Engineering Management) seem to be able to offer a good mix of these two viewpoints.
“I want to start a company of my own, but I just cannot seem to get a brilliant idea”. This is a sentence I hate hearing, and the concept of ‘a brilliant idea’ is among the most overrated one’s out there. I often personally find it works as an excuse for professionals who are too lazy, too afraid of risk, too stuck in the rat race, too afraid of losing the steady paycheck which comes in every month or often just simply too ignorant. As the way things are, getting success as an entrepreneur or a business-owner doesn’t require the conception of a new, innovative or ‘brilliant’ idea. Yes, an innovative or original idea would be brilliant. But, I can assure you that telephone service providers today are earning much more than Alex Bell earned in his entire lifetime (even if you incorporate the difference in value of currency and differences in population). The idea would be the center and innermost ingredient in your recipe for success (the bread of your cake or the dough of your pizza). Here’s a simple 4 step plan for any start-up. And, it would be particularly useful for those who feel that they lack the creative skills of an artist which they consider are required for successful establishment of a start-up.
- Perform a thorough survey of the market (supply, demand, what’s hot and all other factors possible) in a domain of your comfort or interest.
- Analyze and review what the customers want
- Find out how companies are currently providing such services to customers
- Now is the one step where a bit of creative thinking is required comes in. But, it’s really not that difficult. Put yourself in the client’s place. Think of what you would desire to make the service/product better in any terms (availability, reliability, user friendliness, promptness, cost effectiveness et. al.) or think of additional things which you can offer which the current market resources do not. This will enable you to better the product/service and can function as a unique selling and marketing point for your business.
Now, as you notice, there are aspects of the product as well as service-oriented approaches involved here. The product-oriented approach comes into play in the innovation or creative thinking step which I like to call ‘The Refiner’. The service-oriented approach comes into play in steps 1, 2 and 3 where the consumers and producers are being studied. Remember, the best way to learn and improve is by doing so from your competition. Learn from mistakes and losses endured by your competition instead having to go through these yourself. Exhibit A for the same would be Google’s email system, Gmail. There were a variety of email application running before Gmail was deployed. However, currently Gmail is the most widely used email system throughout the world. Where Google succeeded was in increasing the user friendliness as well as the storage space provided in their email service. These points of improvement could be implicitly understood by a simple study of the emailing system of other providers such as Hotmail, Yahoo etc. where finding the links to manipulate emails as well as adjusting settings is a task equivalent to going on an excavation for artifacts from the Indus Valley civilization. Again, Gmail is not offering anything new, exceptional or ‘brilliant’ which other emailing tools in the past did not offer. Gmail simply honed an already existing idea and delivered it well (rather delivered it better). Check the feasibility of the product/service and determine if you, as a customer, would want to use it multiple times or not. The main focus should not be on a brilliant idea, but on a better one.
The next important step is choosing the right team. The chefs who cook your food are very important in ensuring that patrons continue to visit your restaurant. The most important tip here: it is very likely that you may not be the best at a particular skill associated with your product/service (you may not be good at cutting vegetables for your recipe) but it is very important to ensure that you hire the best (or at least the best available considering restrictions such as budget, time etc.) Strong technical and business teams which can collaborate well can be the key to success of your recipe. Remember, that your team should be of a suitable size. Too many cooks spoil the broth and too few cooks will not be able to serve the required number of patrons. Also, the team should agree on a common mutual goal. Working for a goal increases unity and reduces the chances of conflict of interest. Careful consideration should be given to selecting your team and most importantly, hire a team that you can trust.
There is no word to underscore the importance of the timing of your start-ups journey. Timing would be the key ingredient or spicy sauce which adds flavor to your recipe. Several years ago, when a friend’s father got into the distribution of computer media and peripherals, his timing was impeccable. The computer and internet boom started and it enabled him to reap lucrative rewards. Any market has a bubble and there is a time when the bubble will diminish (if not burst completely, which is often the case). The key consideration is to study the market, supply, demand, future growth potential, risk factors etc. There are several examples such as the dot com bubble, real estate bubble and more which have put many start-ups millions and even billions in green because they decided that it was the right time to enter the market. However, it has also left many in red because of poor timing of market entry. Along with knowledge and study of the market, experience (from a trustworthy source, if not personal) always comes in handy in terms of timing. Remember, there’s always a risk of making your sauce too bland or too spicy depending on whether too you’re early or too late in your timing. Certain risk calculation and accommodation MUST always be considered.
Once you decide and incrementally develop what you want to implement as a start-up, you’re just halfway there yet (sorry my product-oriented friends but the journey isn’t over yet). Whenever I have been interviewed (whether it has been for my college admissions or a job) I have found that besides my knowledge for the prescribed work, one set of skills comes into play: sales and marketing. After all, isn’t an interview mainly about selling and marketing oneself in a light which will make it impossible for the interviewer to turn you down. Similarly, the sales and marketing strategy of the product/service adopted by a company is a key to success. Every cake requires layers of chocolate filling and coating in between the layers of bread. A brilliant laptop at the DELL store or smartphone at an Apple store isn’t going to sell itself unless the marketing team and the salesman highlight all the unique and desirable features of the product which will increase the likelihood of selling the item in consideration. There is a plethora of marketing tools available. Importantly, social media marketing comes into play. Here, the key is for the business-owner to understand the difference between social media marketing and marketing on social media. Marketing on social media would involve placing an ad on a social media tool. It is more of a unidirectional communication technique. Social media marketing on the other hand is two-way interaction on a social media platform which involves communication with the client in the form of answering his/her queries and addressing problems and concerns in addition to marketing the current and future products/services. A key ingredient in the recipe for success would be the inclusion of a good marketing strategy on several of the many marketing tools and platforms available now. Additional perks and incentives such as rewarding customer loyalty, encouraging new customers (for example, offers on first buys) and many others can always work as a bonus for companies which can afford or extend such luxuries.
“The client’s happiness must be guaranteed”. I imagine my service-oriented brothers are bowing down in respect as they read the previous sentence. This, in my opinion, should always be among the top 3 issues of the company or business regardless of the current or future financial, economic or any other situations that may exist. This step would be the seasoning and dressing of your recipe or the icing on your cake which makes it pleasant to the eye of the eater and easy to digest for his stomach and wallet. Many businesses and companies fail to solve the basic problems of their clientele and fail to keep them happy as a result of which they miserably fail. Once again, I cannot stress this enough: ANY PROBLEM FACED BY THE CUSTOMER SHOULD BE RECOGNIZED AND SOLVED PROMPTLY. Remember, the person who takes your order and brings you the food is as important as the person responsible for creating the recipe and adding the ingredients to make the perfect dish. How many of us can remember ourselves promising never to use a particular brand of any service/product because of miserable help (or even complete lack of help) provided by their call centers and customer care units. A simple process should be used to make sure that the clients’ problem is solved:
- Form a substantially and feasibly large customer care team
- Have the team check up on customer problems daily
- The problems must be heard politely and with empathy
- Tend to the problem immediately. I call it F.I.N. – Fix It Now
- Provide some sort of compensation whenever possible
Remember, the client’s word of mouth is the best form of marketing available in the world (I call it WORM). These steps will go a long way in keeping your product/service consumer happy. The domino effect comes into play here. One unhappy customer can mean that you are potentially deterring hundreds of buyers. This is simply because WORM will spread one negative review to twenty other people and so on. The damage, in retrospect, could be critical. On the other hand, one positive review could be crucial in establishing a long and successful client base. An efficient method could be establishing a simple and user-friendly tool for customer feedback along with a suggestions section. After all, the opinion of the person consuming your recipe is the only one that really matters. Sorry to disappoint my service-oriented friends but some planning for the future and focus on the product/service is required. We want patrons for our business today as well as tomorrow. Planning and modifying for the future is important and must be done to ensure that the competition does not run us over. Again, the same should be done by ensuring that the clients’ current as well as future needs are satisfied. One cannot emphasize it enough: the clients’ happiness must be guaranteed.
Following these basic steps, a person who aspires to own a successful start-up can create a recipe for success. However, these are pure guidelines which can have certain modifications. After all, the appeal for a restaurant does increase by adding different flavors to your recipe, creating a comfortable patron-friendly ambiance and many other factors. Additionally, stay tuned for future posts in this series which include topics such as finance rules and regulations for your start-up, great industries to start-up in and many more. Finally, a big advice to all those who aspire to create their own start-up: get off your lazy *ss*s and start working. Success could be around the corner. Do not fear the occasional risk. Calculate and embrace it. And work with sincerity. It goes a long way. May the final marginal factor of luck be with you and help you in making successful the recipe that you have concocted.