There is so much information - news, blogs, and garbage - in the world today that I have reduced my interest in adding to the noise. However, I do a keep a log of pertinent observations from my involvement in entrepreneurism and life. When something reaches a critical mass, I remind myself to jot down the key points and add to the world of information and noise. Hopefully, some aspiring entrepreneur will stumble across my words, read them, process their meaning, and then make a minor change in their strategy that can help lead to their overall success.
There are many folks in the world that think they want to be entrepreneurs. Today, entrepreneurs are looked upon as risk-taking, pioneering change agents that took fate into their own hands and have become successful and super rich. Of course most of the time you never hear about the other 99% of the folks that try, fail and sometimes lose everything in the process. Typically, it’s the result of flawed strategies and execution that differentiate the successful entrepreneur from the rest.
As a successful entrepreneur, I was always willing to take risks; however, they were always calculated and managed. It seldom was the flip of a coin as to the outcome, but something that I could visualize as successful and think that I have a clear path of execution to achieve. When it comes to starting a new business, this is even more important because there is no cushion for being wrong or failing in the execution. After you get business momentum, have some customers, generate some revenue and profits, then you can absorb some of failures. When you have nothing, then every decision has to be dead on.
In working with entrepreneurs for the past decade, and intensely over the past two years, I have a basic observation or simple rules that I highly recommend to each aspiring entrepreneur before they quit their job and roll the dice with their house. Interestingly, many rebuke my suggestions and rationalize their actions with the flawed strategy that they will “figure it out”.Now, that is real risk! The following are three simple assessments every business, both new and existing, should master and document to ensure a strong foundation for their future.
Clearly and simply define a “real” problem that exists.
Business is typically about solving a problem in the market, so your bright idea of a new business should be aligned to just that - solving a problem! The key is being able to define the problem so that anyone can understand it. It turns out that this is much harder than it sounds for the wantrepreneur. They typically have a solution to something, but unsure what problem they are really solving in the market. For example, the wantrepreneur has developed a new app that sends you a text message when it’s time to feed the fish. What is cool to him/her is the creation of an app and then waiting on Facebook to buy their company. However, is there a real problem with remembering to feed the fish?
Determine how big the problem is in the market.
While there are a lot of problems, many are too small to build a company around to solve. Even if you develop the best solution to a real problem but the only one that has this problem is you, then it’s a going to be a small market with a very limited opportunity for revenue (other than your mom supporting you). It’s amazing how myopic some wantrepreneurs can be with this assessment. I have worked with inventors for the past 20 years and seen so many interesting inventions where the inventor has invested their time and life savings into something in which they are one of the few folks that actually have the problem they are solving with their invention. This assessment requires the ability to face reality as it is and not try to make something that does not exist.
Clearly and simply describe your solution to the problem.
If the wantrepreneur has completed the first couple of steps, then this step should be pretty easy. It’s not uncommon for many businesses to begin with a solution and work backwards, so if they have defined the problem and the market size, then this would be a modification of the solution to maximize the opportunity. A couple of things that make this a bit tougher is that the solution has to actually solve the defined problem and it needs to have a competitive advantage over current solutions, if any, to the problem being addressed. If the solution is obvious, or simple, then you have to ask yourself why is it not already available or how do you keep someone from copying in order to compete with you. A patent is typically not the right answer. If you don’t have a competitive advantage, then don’t compete.
By starting with these three basic steps, then the wantrepreneur could begin the journey to entrepreneur land with better clarity and slightly reduced risks for their success. Of course, there is still a very long road to having a successful journey, however one can treat these steps as the warm-up stretches before you hit the road and you might avoid pulling a muscle.
What do you think?
*Wantrepreneur: An individual that desires to be, but is not quite yet, an entrepreneur (Source: Urban Dictionary)