Great Entrepreneurs Do These 3 Things
Why is it that large established corporations, even when they see upstarts bearing down on them, can’t react or at least to get out of the way before the new guys roll right over them? These companies are in search of perfection, and that’s deadly. They can’t get anything started in time to make a difference. It’s a foolproof formula for failure.
As Facebook’s Mark Zuckerberg says, “Done is better than perfect.” It’s absolutely clear that a good plan executed today beats a perfect plan that may never arrive. You need to start with what you have, iterate like crazy, and fail fast.
Starting with what you have
If you’re going to try something new, you need to begin with the tools, people and resources that you have on hand. Crucially, you also need the confidence that, as the project progresses, you will find and attract the right new tools, people, and resources.
Here’s a great recent example. Aviary.com makes photo editing software -simple tools to help your pictures look better or different. When they started their business, their customers were the millions of people taking zillions of digital photos every day. Aviary.com used a freemium model with ad revenue to follow, and they put some pretty respectable early numbers on the board. At their peak, on an average day, about 50,000 photos were being edited using their tools.
But Aviary.com wasn’t growing fast enough, and their space was getting increasingly crowded. Mobile was emerging, and it was going to bring big changes to their marketplace. So Aviary started targeting large firms such as Walgreens that were developing and digitizing photos for consumers. They gave the big companies photo editing tools for free, and encouraged them to incorporate the tools into their consumer offerings. Now Aviary.com was marketing to a couple of thousand companies rather than tens of millions of consumers.
Aviary.com is now working with about 1,500 firms, and customers of those companies are editing about 5,000,000 photos a day. Aviary.com got started; they watched the market and the opportunities develop; and they changed their approach and their offerings just in time to catch the mobile wave.
Iteration is the single most important business process in the world today. The smartest way to develop and grow any business is by starting small and scaling rapidly. I call this “successive approximation,” as opposed to “postponed perfection.” It applies to everything you do. You test the water and the depth of the pool with a toe or two, and you try to never lose sight of your overriding plan. You constantly adjust your strategies and tactics to suit the changes in conditions and circumstances. As Amazon’s Jeff Bezos likes to say, “We are stubborn on vision, but we’re flexible on details.”
Iteration starts with the belief that anything and everything can improve. There are four simple steps: (1) experiment; (2) measurement; (3) analysis; and (4) reaction and modification. Repeat. The best businesses never stop iterating. They may change direction, abandon a product line that isn’t working or meeting expectations, or decide that an entire venture should be shut down. But they make these decisions rationally and quickly based on the facts. Above all, they learn to fail fast.
Being willing to fail fast doesn’t mean that you don’t plan to succeed. It doesn’t mean that you aren’t confident in your idea and the likelihood of your success. It certainly doesn’t mean that you’re going to give up without giving it your best shot. What it means is that you understand the concept of opportunity costs (knowing when your time and resources are better spent elsewhere) and that you’ve learned the First Rule of Holes: When you’re in a hole, stop digging.
So don’t wait for an invitation. Don’t wait for a schedule. Don’t wait for all the data you need. And most of all, don’t wait until things are “just right” or perfect, because you’ll be too late every time. Start with what you have, get better every day, and keep moving forward. After a while, it gets to be a habit and a way of life.
HOWARD TULLMAN | Columnist
Howard Tullman is the CEO of 1871 in Chicago where, at the moment, 260 digital startups are building their businesses every day. He is also the general managing partner of G2T3V, LLC and Chicago High Tech Investors – both early-stage venture funds; a member of Mayor Emanuel’s ChicagoNEXT Innovation Council; and Governor Quinn’s Illinois Innovation Council. He is an adviser to many technology businesses and an adjunct professor at the Kellogg Graduate School of Management. @tullman