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Wednesday, July 15, 2020

C-Suite Advisory

The 4 Foundations of Startup Success

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Entrepreneurship has its share of stumbling blocks. One all-too-common hurdle is admiring a successful business owner or brand and then holding your new idea to that same standard. A new business is like a little league baseball player. You might be good for your age, kid, but you just haven’t had the experience or growth to make you a major leaguer yet.

Every megabrand was once a startup, and you can turn on any tech-success documentary to get a basement, garage, or dorm room origin story to back that up. But we can learn something important from every giant’s humble beginnings. We can build from the foundations that got them started.

Stomping on the Shoulders of Giants

Whether you want to develop a product or service using your own existing skill set—such as pursuing software development if you’re a programmer—or you’re hiring someone to do the development for you, you can increase your odds of success and shorten your development timeline if you build on a preexisting foundation.

No, I’m not suggesting you copy or steal another product so that you can call it your own.

Rather, you should look for opportunities to pick up where someone left off so you don’t have to start from scratch. Look at what’s happening in your industry already and use missed opportunities as a springboard for developing newer, better ideas.

You don’t have to innovate in every single facet of your business to find a successor to develop a product that’s original. Transforming one link of the value chain, at least to start, can become a game-changer for you and your future customers.

How you apply this to your own journey will vary based on your industry and your goals, but these four foundational baselines will help to stimulate your creative process:

  • Succeed where competitors fail. Zappos didn’t invent the concept of selling shoes online, but they saw how awful the experience was for customers and iterated that idea to the point of becoming legendary.
  • Use readily available tools and services. If you want to sell products online, you could code a website from scratch, or you could use a service like Shopify or Squarespace to quickly and cheaply make your prod­ucts available online. There may come a time when you need custom solutions but wait for that time to come.
  • Build from off-the-shelf components. Packaged software, code librar­ies, repositories, plug-ins, and so forth make it possible to assemble a new idea out of existing parts. (Be mindful of copyright and usage conditions if you take this route). Most industries have a version of plug-and-play components, whether it’s open-source manufacturing files or a breakdown of the production specs used in Vera Wang dresses.
  • Learn from effective business models. Though your product or service may be innovative, how you ultimately monetize it doesn’t have to be. Look at the best practices in your industry or industries like yours, and learn from their experiences.

For example, there’s a reason that software-as-a-service (SaaS) companies have many similar practices in terms of pricing structures and sales techniques. Handling your business differently from model norms can be justified, but that doesn’t mean ignoring the opportunities to learn from what has worked already.

Though you may one day become a giant in your own right, there may be much to gain from what other giants have already done. Yes, this is a twist on an old expression about standing on the shoulders of giants, but this isn’t just about going further than the innovators who came before us. This is also competitive. If you can use the work your competitors have already done to help you to build a new competitive edge, why not explore the opportunity?

Troy R. Underwood
Troy R. Underwood is an industry disruptor. Part technologist, part economist, and all innovator, he revolutionized the motor vehicle industry with the nation's first electronic title system for financial institutions, which was later sold for $106 million. His healthcare venture, benefitsCONNECT, innovated healthcare benefits administration and resulted in a highly successful acquisition. His new book is How to Launch Your Side Hustle: Start and Scale a Business with Minimal Capital. Troy R. Underwood is an opinion columnist for the CEOWORLD magazine. He can be found on Linkedin.