When you’ve been in business for some time, it’s hard to remember what it was like when you were first starting out. In some sense, it’s much safer and easier to rest on your laurels than to have to risk inventing something new.
But the truth is, inside every established business is a start-up waiting to be (re)born. It just takes a little agile thinking and a desire to put the customer first. Don’t believe it? Here’s a chance to relive your startup years through 4 lessons from the startup world.
Focus on Customer Needs
Start-ups must place the needs of their customers first. This is critical to their survival. They thrive or fail by the fact that there must be a market for their product or service. Even more there must be a market that desperately needs what they are producing and is willing to pay the nominated price for it. Then, and only then, are they truly in the game.
For example, Peter Cohan, in an interview with the CEOs of Austin-based start-up Main Street Hub (MSH), places the customer’s pain points first on the list of things a startup should be concerning itself with. He suggests a rapid prototyping approach, whereby products and services are developed quickly and passed on to customers for early feedback and assessment, then later refined into products for market.
If you are an established business, how long is it since you ran a prototype product or service past your customers? Perhaps you’ve never done it, or it’s so long ago that it all seems like a distant memory. Perhaps it’s so long since you’ve developed a new product or service it seems impossible.
If this is you, it’s time to go back to the drawing board and come up with some ideas to revitalize your business. Sure, if you’ve found a winning formula and have lots of happy customers already, that’s amazing – but remember that markets change. Customer tastes evolve, technology advances, disruptive new competitors enter the market.
They do say that if you’re not growing, you’re dying. Don’t let it happen to you.
Borrow from the Best
It is rare that a start-up comes out with a product or service that is so revolutionary it bears no recognition to anything that came before it.
Most successful new products and services are a riff on an old idea, infused with a brand new twist. Take taxi cabs for instance. They have been around for as long as humans have needed rides (before they had engines, they had hooves and were known as Hansom cabs!). But inject a new business model and suddenly we have Uber. The same for Airbnb, or the Apple Watch.
However, new products and services don’t have to be successful at this level. Entrepreneur.com explains, “Simple ideas are the easiest to bring to market. You don’t need to reinvent the wheel to create an impactful, lucrative idea.”
One of the best ways to get started is to look at products and services that are already well established within the mainstream, and consider how they might be improved. What are the customer pain points? What could be done differently? Can you tweak the production process? The business model? The distribution strategy?
Truth is, you don’t have to go back to zero to come up with something new. You just have to look a little more closely at what’s already out there.
Form Lasting Partnerships
Few startups make it entirely on their own. Of those who are most successful, many will acknowledge that partnerships were the key to their survival. Established businesses who are still struggling to get a foothold or who just can’t seem to make it to the next level would be wise to take a note out of the startup playbook in this regard.
As Fast Company notes, partnerships with successful, established organizations were the driving force behind emergent startups like Spotify, Evernote, and Whatsapp, which are now household names.
The truth is, even a wildly successful single company only has so much reach. Through partnerships, businesses can leverage the power of networks to extend their influence and sharpen their competitive edge.
But in your rush to form relationships, it might pay to do a little strategic analysis first. You don’t want to choose just anyone as a business partner – in fact, quite the opposite. Entrepreneur magazine reminds us that who you partner with is absolutely critical to your success.
They write that in selecting a business partner, it’s important to consider how well your values align with theirs. Just as in life, it is shared values that is likely to determine how successful your business partnership is in the end. In addition, consider how well you complement one another, and articulate the mutual benefits of your partnership.
Fail fast, fail often
If you’re not familiar with the concept, the idea that your business should “fail fast, fail often” might sound ridiculous. Arrk Group does a good job of explaining that “the idea is that business failure can be a good thing as long as you learn the lesson”.
There’s a lot of hype around this idea, and it’s been widely adopted by the startup and entrepreneurial communities, but critics have gone as far as saying it’s the “stupidest business mantra of all time”.
However, ‘fail fast, fail often’ is applied most commonly to software development. This can easily be applied to startups as well, because they have an alarming failure rate.
Shikhar Ghosh, a senior lecturer at Harvard Business School, claims that the failure rate for startups (defined as the investors losing everything) is 30% to 40%, with much higher rates when you broaden your definition of ‘failure’ to not meeting projected ROI or missing a declared projection.
In recognition of this fact, many successful entrepreneurs of today have a litany of failed businesses behind them, even the industry giants (especially the industry giants). That hasn’t stopped them from trying again and figuring it all out.
When you fail, you need to get straight back up and try again. Remember, it’s only failure for failure’s sake that’s stupid.
To think like a start-up, you don’t have to start from scratch, but you do have to be prepared to think out of the box and to learn from your mistakes. If you can put this in place, you’ll be well on your way to improving your business.