Every entrepreneur thinks he can relax a bit after his business model is proven, funding is in place, and revenues are scaling as projected up that hockey-stick curve. Unfortunately, the market is changing so fast these days that any upward climb can level off quickly, as the core business growth begins to stall. This S-Curve, with no correction, can quickly lead to disaster.
You can be a successful small entrepreneur no matter where you’re from, even without having much financial support or even without a fancy college education. While there are a many academic programs that prepare students for entrepreneurship, remember, entrepreneurship cannot be taught – it has to come from within, and not everybody can succeed at a business entrepreneurship.
I’m not talking here about a small pivot. I’m talking about the kind of change that moved Apple from personal computers to music distribution to consumer electronics, and Amazon from books to e-Commerce to cloud computing services. On the other end of the spectrum are companies that fell behind the curve and may never recover, including MySpace for social networking, Yahoo with online ads, and maybe even Groupon with discounts for group purchasing.
To be a business entrepreneur is possibly one of the toughest things that a young person can be. Business entrepreneurship is the art of finding a business opportunity and to start business, finding the resources by attracting business investors to the cause, finding the right business partners, taking great risks, working non-stop and without sleep for months, even years, bringing out the best from employees, handling great stress and work related tension – all in search of over sized profits some time in the future. Often, this could be a thankless task, with failure as the only certainty.
To sustain long-term growth, every company needs to build a repeatable process for innovation and finding new opportunities before their core business growth disappears. The reasons for this requirement, and some practical guidelines for how to prepare, are outlined in a classic book “The Curve Ahead: Discovering the Path to Unlimited Growth,” by Dave Power.
The Lean Startup Methodology which was first expounded by Eric Ries in this book of the same name, is a systematic approach that aims to get start ups to deliver a product to the customer at the earliest possible time, win customer loyalty from the very start, create a positive cash flow or an assurance of one, even before having invested a single dime into the manufacturing or product development.
ERIC RIES is an entrepreneur and author of the popular blog Startup Lessons Learned. He co-founded and served as CTO of IMVU, his third startup, and has had plenty of startup failures along the way. He is a frequent speaker at business events, has advised a number of startups, large companies, and venture capital firms on business and product strategy, and is an Entrepreneur-in-Residence at Harvard Business School. His Lean Startup methodology has been written about in the New York Times, the Wall Street Journal, the Harvard Business Review, the Huffington Post, and many blogs. He lives in San Francisco.
Entrepreneur competitors see the same opportunity. New players jump in, and existing players broaden their offerings to cover the same territory. They steal a share of your market, slow down customer buying decisions, making it harder to close new business, and put the brakes quickly on your exponential growth.
Many entrepreneur startups operate without a plan or process. A Lean Startup operates by continuously testing its vision in the marketplace. Continuous testing and constant iteration based on the results of the tests, is how a Lean Startup operates. The goal is to test cheaply, and even if the tests fail to achieve results, nothing is lost, but a lot of critical knowledge is gained.
According to Eric Reis, progress of Lean Startups is measured in terms of what is known as validated learning- which is a method that measures demonstrable progress achieved by a product in the midst of general uncertainty. To track validated learning achieved by a product, Reis uses the methods of Split Testing and Cohort Analysis, which basically refers to testing different versions of a product with select groups of people and finding out what works and what doesn’t. The goal is to base your product strategy on what customers want and will pay for, not on what you as a founder or engineer want or believe the customer wants.
“The Lean Startup has a kind of inexorable logic, and Ries’ recommendations come as a bracing slap in the face to would-be tech moguls: Test your ideas before you bet the bank on them. Don’t listen to what focus groups say; watch what your customers do. Start with a modest offering and build on the aspects of it that prove valuable. Expect to get it wrong, and stay flexible (and solvent) enough to try again and again until you get it right. It’s a message that rings true to grizzled startup vets who got burned in the Great Bubble and to young filmgoers who left The Social Network with visions of young Zuckerberg dancing in their heads. It resonates with Web entrepreneurs blessed with worldwide reach and open source code. It’s the perfect philosophy for an era of limited resources, when the noun optimism is necessarily preceded by the adjective cautious.” —Wired