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I was thinking about business and at what point it becomes possible to believe you have a good chance of winning. I came to the conclusion that four elements pave the way to start-up success.
The four elements are:
- Your concept has been validated in market.
- You know what to do.
- You know how to do it.
- You are actually doing it – right now.
If you work through these four elements, then success is inevitable. Of course, all of these elements need some explaining.
1. Your concept has been validated in market
Firstly, let’s look at the last two words in this sentence – in market. This means you have launched, you are live, and you have customers and revenue. We have gone beyond the idea (the easy part) and launched something, which makes the original business launch plan a historical and irrelevant document. Until this point, there is no proof that anyone actually cares about your idea; that anyone will buy your thing.
Concept validation – this occurs when people are buying what you sell, as well as any positive coverage you receive. Positive coverage includes people and media talking about what you are doing – not what technology you have used, or how you bootstrapped your business (which is not concept validation, but method validation), but talking about the benefits your business is providing customers and the problems you are solving. This coverage is about them, not you. At this point, you know the business has potential and isn’t a stupid whim.
2. You know what to do
You’ve been doing what you do – selling what you sell – long enough to know the crappy parts of your business. You know what you must improve to make your semi-broken yet still alive start-up better. You’ve worked out where the original model and plan was terribly wrong. You’ve also been around long enough to gather feedback from the market, which gives you a good indication of how to improve your ‘thing’. Until this point, innovation, location, good people and lots of saying sorry has kept you alive. But time has nearly run out, and you’ve learned what must be done to grow and eventually thrive.
3. You know how to do it
Not only do you understand the above conceptually, but you actually know how to make this stuff happen. You’ve gone beyond ideas for improvement, such as make the website more usable, reduce the price of the widget, create national brand awareness or increase distribution. Now you actually have an executable plan in place.
So what is an executable plan? An executable plan is a set of projects that are achievable with the immediate resources you have at your disposal, in a reasonable timeframe. Financial resources, human resources, organisational infrastructure – an executable plan that you can deliver to the market, not a pipedream of appearing on Oprah or getting funding from Sequoia Capital. You have the team with the skills to bring the improved offer to market. It may not require huge financial resources, it may involve more creative solutions, but you know you can do it.
4. You are actually doing it – right now
The plans have been put down as discussed in parts two and three. In fact, you won’t even need to look at them again. They are now ‘historical documents’. Instead, your team is fully engaged in implementing what you have agreed is the correct strategy. The steps to completing the projects are known. They are live projects the team is actively engaged in on a daily basis, which will fundamentally change the marketing mix of your business. The projects have budgets and deadlines and you will not rest until they have been completed. Only then will you need to go back to part two again, and work out what to do. Then go through the process again. In fact, this process never ends. In continues in perpetuity. The important thing is that you implement strategies before re-viewing them. There is nothing more counterproductive than constantly re-assessing what to do. The only way to know what works is to experiment and do it.
When we do this – we are on the path to success. This should perhaps be defined as: “Success = the progressive realisation of a worthwhile ideal.”
Stephen Sammartino escaped his cubicle after 10 years marketing global brands. He has now founded two start-ups, recently launching Rentoid.com – the place to rent anything.
Photo: Diamond Rain
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Paul Groth
June 29th, 2009 at 7:02 pm
I was in this situation some years back where I had a “great plan” but it wasn’t executable due to lack of resources and funding. The business was a startup and doing well according to my original plans, until the next step where I was to slightly change the pricing structure and start looking for the next step up in target customers.
After being inundated with a huge workload, charging prices way too low and an employee quitting, it all went pear-shaped and I ended up very stressed and at worlds end.
At the time it seemed practically impossible to change my strategic direction. The original plan upon startup was to charge lower prices and attract any customers I could just to get the ball rolling, then once I had been set up like that for a while, up the pricing and start looking for more valuable customers.
It was that change that really didn’t happen because of being stuck with too much work and not enough financial reward. The business was eventually shut down.
But not to worry, as an entrepreneur I saw the whole experience as a learning curve on my road to riches. I’ve learned that you should never try to attract ANY customers, you should have your target market and charge what you need to charge, not a discounted rate and don’t be sucked in to giving out discounts. You don’t want your start-up to end-up as a job from hell so make sure you’re making a decent profit after all of your expenses.
I’ve had quite a few learning curves like this but due to my burning desire to be a successful entrepreneur I’ve attracted success, and I’m not stopping at that, I want bigger and better and I’ll do whatever I have to (legally and ethically) to attract it.
One of the biggest things you can do to change your ways in any situation like this is to learn more, knowledge is power, SUCK UP THE KNOWLEDGE, never stop learning.
[Reply]
Arvind Lal
June 30th, 2009 at 12:37 am
Startup is definitely not easy. I am going through one right now trying to get an online clothing magazine with sales directory off the ground. I certainly admire all those entrepreneurs who have successfully started a venture.
My experience with startups and what I have read is that most startups are running blind with a bit of this and a bit of that. This is made even harder or should I say worse when you are actually trying to meet the daily demands of a job you are doing whilst working on your grand idea, not to mention family!!
In Stephen’s article above, I think points 1, 2 and 3 are clear for most or can be defined with research and some work behind it, but it’s point 4, “Actually Doing it Right Now” is what gets most people. There is a huge gap between point 3 and point 4. Closing this gap is probably the hardest part. It requires more focus than any of the three points put together.
With my startup of clothingrush.com.au, I am somewhere between point 3 and 4 (closer to 4) and I feel that marketing my site is proving to be a challenge while I am also doing another job. But like all other entrepreneurs, I am driven by my passion to make this a success which is probably the difference in the end between point 3 and getting to point 4 – where you are actually doing it.
By the way I enjoy reading Stephen Sammartino’s column, they are very down to earth and realistic.
[Reply]
Liesl Capper
June 30th, 2009 at 11:41 am
I have successfully grown three start-ups to maturity. The first one (global education franchise) I exited in a management buyout. The second (Search Engine) I grew through the tech wreck, and exited by listing on the Stock Exchange. My current one (MyCybertwin, makes AI’s/virtual people) is no longer a start-up. It is doing extremely well, has blue-chip customers, and is growing despite the recession.
This is a great article, thanks Stephen.
I do believe the one overriding element to success is holding a clear vision of what your company will become. This is not the detail of exactly how you will get there from day to day, or even the products you will sell; but what place you company will have in the fabric of reality – how big it will be, what it will look and feel like, what the shape of it will be two years from now.
I believe that with this clear, all the other elements fall in to place, as the world has no option but to comply with your vision.
http://anthillonline.com/liesl-capper-on-what-and-who-drives-innovation-in-australia/
[Reply]
Path to startup success « Start Up Blog
June 30th, 2009 at 7:06 pm
[...] Posted in entrepreneurship by Steve Sammartino on June 30, 2009 As published in Australian Anthill this [...]
Dellemente Net-Magazine » Blog Archive » Path to Start-Up Success
July 5th, 2009 at 9:21 pm
[...] published in Australian Anthill this [...]
Kevin Cox
July 8th, 2009 at 9:44 am
A startup is a success when it is no longer a startup.
That took one sentence not a whole article.
[Reply]