Business school was (and continues to be) an expensive learning experience, and what I remember most was that every professor claimed their stake to significance by naming or authoring an acronym, formula or 4x4 graph. Whether it was four P's of marketing, three C's of business, or simply a unique business quadrant (S.W.O.T. analysis anyone?), the list of applications never seemed to end. And while I jest (a little), these tools did add value to my understanding of business and, to a great extent, help develop a foundation upon which to create and build successful organizations.
Ultimately, however, in a startup environment, most of these theoretical models go out the door.
For beginners, starting a new business can be overwhelming. From business formation to business plan writing to fundraising, trying to find just the right theoretical model to apply is fruitless. In fact, most entrepreneurs stumble right out of the gate simply because they lack a basic understanding of their own business.
In fact, while many believe finances and managing cash flow is a leading cause of startup failure, in reality the biggest problem is lack of market need (which, of course, will impact cash flow). That is not necessarily to say that there is no market, but perhaps that the idea was not clearly vetted or articulated, hence missing out on important market opportunities.
If you are a startup entrepreneur, be sure to consider, understand and be able to articulate these four S's before you endeavor to apply any other acronym or theoretical quadrant to your startup.
Have you identified a solution to a problem or pain of your customers?
Are there niches that are not being served by existing solutions?
Will your solution improve the lives of consumers?
Whether you manufacture a tangible product or are providing an intangible service, the number one priority for your company is to deliver value. In order to do this, you need to solve a problem or provide a convenience that, in the end, improves the lives of the consumer.
Plain and simple: If your "solution" doesn't solve a problem, then it is just noise.
Can you produce and deliver the product or service you have developed?
Could someone else produce and deliver it for you?
Once you understand the marketplace, you next need to determine how you are going to deliver your service to consumers. If you do not possess the capability to produce and deliver, it is very likely you will need to seek help, either through finding a co-founder, forming partnerships or entering licensing agreements. You also need to consider other business matters, such as business formation, financial controls, keeping files, the color of your office chair, etc. Eventually, you will delegate most of these decisions, but for now they are your responsibility.
Regardless, the one thing you do not want to do is wait. If your idea has merit, it is just a matter of time before someone else thinks of it. Your priority is to get started.
How will you get your first customer?
How will you get your thousandth customer?
How will you scale the business in size?
Do you plan on raising money, taking partners or eventually exiting?
Great ideas often and quickly fizzle because the business runs out of money or, worse, enthusiasm. This can be avoided with a simple business plan that lays out your vision, goals and strategies for the company. These are not permanent, but they do lay the groundwork for the future.
You should start by creating a personal vision for you and the company. It should include short- and long-term goals for both, so that decisions you make for the company actually satisfy personal goals for yourself. While flexibility is crucial, having a plan at the very least will help you stay focused.
Always have a vision and a plan.
Do you have the courage to start?
Lastly, the first three Ss are useless if you lack the courage to get going. From personal experience, this is typically the most difficult to embrace. Business plans and strategies are easy to change and update, but personal courage is not something with an "on" and "off" switch.
Of course, most startups fail, and that understanding and the fear of failure dissuades many from ever taking the first step. From experience I can tell you that the doubt left behind from not starting is much uglier and more difficult to dismiss than any failure you suffer after starting.
It is very likely that you will not be successful in your first business endeavor. I personally believe that to truly be a great entrepreneur, you need to understand failure and the humble confidence it creates in order to better appreciate the successes.
So, once you have considered, understand and are confident in your four startup Ss, then it's time for you to for your startup
Do you have advice for aspiring entrepreneurs considering a startup launch? Please share your feedback with others in the comments section below.