Create a Business & Dismantle the Startup
|Tags:||Business, Startup, plan, metrics, funding, exit strategy|
Many of us would love to start our own business or have our own startup, but many of us also suffer with mental blocks that won’t allow us to create an idea that means we can chase the dream.
It’s easier than you think.
We all wonder how they tech whiz kids get there ideas, the ideas that create billion dollar companies and revolutionize the way we use the web or use a product.
Firstly, it’s never a random brain ‘fart’ that just magically places an idea into your head, it’s the foundations of an idea that you build up and then act upon.
Finding something that irritates you or someone you know is usually a great place to start for constructing a business idea, it highlights a problem and you can produce a business that looks to solve it.
The difference here is that with problems they need to be a big enough nuisance to really need a product or service to limit it, if it’s something many people can live with but just like to complain about it then chances are making a viable business will be a lot harder.
Venture Capitalists, Angel Investors, Crowd Funding
It’s pretty hard to not hear on a daily basis a company that has just been funded through a VC, Angel Investor or Crowd Funded.
Don’t feel pressured to think that in order to get a large, successful business going you need to go through one of these methods. The mirage of a company being successful because they received funding is dangerous.
The funded capital is just trying to promote aggressive growth and expansion, with the end goal being to get out with a large return in their hands. Nothing wrong with that, but it’s definitely not the first thing to consider, especially when a large amount of equity (ownership) in the company is usually given away.
Crowd Funding is all the rage at the moment, this is probably a safer bet but again to get successful funding you need to have a product or service that could be considered revolutionary, people like something that is new and different.
Crowd funding is the easier option for both parties, the funders don’t have to take on risk and the company looking for funding doesn’t have to give much or any equity away.
All you really want is mentors instead of funding; knowledge is generally far more powerful for business then money. Experience is something you may lack so having that behind you from someone else & their perspective means you can call on them for guidance and help.
Twitter is a good example right now as a large shift in process because of a possible mentor in the background. If you haven’t seen it, Twitter has basically limited 3rd party use of its API (people are limited to what they can now build using Twitters resources, limiting competition) and it has started to shift towards a solid business with a great revenue, ahead of offering everything for free and being a great chum to see every day.
Look for mentors before you look for funding or investment, these are far more important and generally much better long term than any funding.
Countries like India & China are seeing a monumental growth in businesses and startups, granted many are not viable options for the Eastern markets but nonetheless they are the true meaning of entrepreneurs.
Check out the Google trends chart for the term ‘Startups’
You can see that from 2010 there has been a steady up trend for searches of the term however look at the chart below for Regional interest & related terms and you can clearly see that India is leading the Emerging Markets for new businesses and entrepreneurship.
Niches are great for Business
Take it from the Emerging Countries and their endless entrepreneurs, they all search for one thing that annoys people or at least what they believe will become successful to then start to develop a business from.
No doubt some ideas are pointless and meaningless other than to create a source of revenue or income. But take that into consideration, chase the money and the company won’t succeed it’ll in fact make it harder for you to emphasise with the target audience and produce something your truly care about.
Its business 101: Create value
Create the Market or Be Disruptive
The general motto for the tech world of startups, but you can do the same with the basics of business.
Zappos has created a company that is growing exponentially by using an exceptional model for creating the best customer service out there. This is what is attracting people to the website and also to buy from them too. It has also given the company the best kind of marketing; word of mouth.
Disrupting the marketing doesn’t mean you need to think of the next Facebook, Pinterest or Apple; sometimes it’s just a case of taking something old andcreating a process that brings joy to the experience. Many people dislike shopping either online or in person so find ways to make it better, it brings loyalty and marketing along the way too.
Viable & Long Term
The pump and dump sales model is now at an all-time high, funders want to be going through their exit strategies within 3 years and entrepreneurs seem to want to sit on a beach rather than construct a viable business.
Don’t fall for the trap; instead get yourself a solid sales process that encourages growth and profit over a long period of time than 3 years.
Forget about the exit strategy, it’s more of a gimmicky word to use at networking events and bragging than anything else. It’s also a mistake many people make, going into business ownership with the exit strategy in their mind.
Set a long term goal, the best in your industry in X years is great it’s long term, builds value and then you can consider an exit strategy. Only then should you consider it.
Business is business, people run it different to others so some of the pointers may work with your style of ‘entrepreneurship’ or not. But the most important thing is to avoid getting caught up in the magical headlines of investments and funding, IPOs and buy outs.
Just do your own thing.
By: John Perrin