Entrepreneurship; A World of Failures, Unicorns & Dark Horses
Date: Tuesday , January 26, 2016
Startup - One word that means many different things to different people. Some associate it with glamour, money and luxury, while others use adjectives such as innovative, disruptive and path breaking when they talk about it. Few others still think of a startup as an unnecessary risk an individual (or a group thereof) takes in the hope of winning - the odds of which are not too different from winning the lottery.
Experts say a startup is a temporary enterprise in search of a sustainable business model. They associate a startup with a huge market and exponential growth. Many entrepreneurs associate a startup with freedom. And then there are those who think of startups as unreasonable in the context of George Bernard Shaw\'s quote \"all progress depends on the unreasonable man\" and consider a startup to be the vehicle for society\'s progress.
For me, startups can be summed up in 3 words - Failures, Unicorns and Dark horses. Any startup that fails to implement a sustainable business model is a failure. Those that find one but can\'t grow exponentially are stable enterprises, but not startups. Those that find a business model that leads them on the trajectory of exponential growth become the Unicorns and startups in search of that elusive exponential business model are all dark horses.
Finding and implementing the business model that will be the engine of exponential growth is the primary challenge a startup faces. This starts with the identification of a huge market, then narrowing it down to the market the firm can reasonably hope to address in the foreseeable future, and evaluating whether the market is big enough. This is the first stumbling block.
Entrepreneurs are a passionate lot. They deeply believe that their idea is going to change the world. They firmly believe that their product services a massive market. And they put on blinkers to market realities if this belief is not validated by the market. I know this because I have been guilty of it. Unless these blinkers are removed and hard numbers are allowed to dictate the market size, the entrepreneur is only lying to himself.
The second major stumbling block entrepreneurs face is communicating their solution to the world. In their passion and with their foresight, they communicate too much to the world. Some of it stems from the philosophy of \"throwing everything to the wall and seeing what sticks\". Also, it stems from the genuine resolve to explain every detail as to how the solution can make the consumers\' life better. Again, I have been guilty of doing this. Not once, but many times over.
It takes a lot of confidence and resolve to focus on one thing that you are solving for your consumer. Communicate only that. Let your consumers tell you the other amazing features they love that make their lives simpler in addition to the core value prop of your solution. If you dilute the core value proposition of your solution by giving prime time to supplementary features, all that the consumer understands is a lot of noise and does not get much substance.
Finally, there are challenges of growth and scaling. At every stage, these two stumbling blocks present themselves, in different disguises. Solutions are almost always different. Entrepreneurs who learn to manage this spiral achieve exponential growth and become unicorns.
There are many frameworks and methodologies out there that help entrepreneurs navigate this maze, the most popular one being the lean framework. To me, the crux of it is just this: Test every assumption with market realities, be aware of your inherent biases and correct for them, and only trust hard data that the market gives you. Take everything else (including this article, and your gut feel) under advisement.
The success of Uber has unleashed massive opportunities in the on demand economy. Technological advancements and adoption is making the on-demand promise possible for many products and services that could never be conventionally provided in that manner. Advances in Big data & artificial intelligence, 3D printing and telecommunications are redefining the way we lead our lives every day.
Startups are an enigma because there is no formula for success. Every journey, whether successful or not, is unique. And every entrepreneur, through this journey, learns many life lessons that no job could teach him/her. That has been my experience.