The notion of entrepreneurship has been prevalent since the birth of the first human. What has changed consistently over time – along with ever changing socio-economic paradigms – is the approach of how to bring a 'dream' to reality. Bringing dreams to reality is entrepreneurship. Let’s spend some time understanding the ingredients of successful entrepreneurship.
Today's tough economy and financial outlook provides a sobering reminder that an abundance of capital (as was the case recently) is not the only ingredient to building a business. Young entrepreneurs often see "access to capital" as their biggest challenge. However, the two more important factors to successful entrepreneurship and start-ups are:
(1) The business idea/gap in the economic fabric that is being patched by the new products/ services offerings and an incredible focus on that alone
(2) The attitude of the founders and the incessant inner drive to succeed in business.
I believe most business opportunities have the capacity to last for a very long time if they have the right mix of the two points above. Entrepreneurs must focus on building an incredibly enduring business – one that can last for a long time, all the while demonstrating a sustained market value. A weak business idea or "get rich overnight" concepts are generally met with failure. The business idea/gap you are trying to fulfill must be based upon a solid foundation of innovation without which the value proposition always will remain on a shaky ground – the similar weak grounds that the automobile industry are currently facing in the USA due to lack of innovation for extended period of time and could even become extinct unless timely help from the government and innovation in business are brought in as saviors.
Innovation does not mean radical changes – but rather, a consistent dose of enhancements to products/services and a continual desire to explore better means of conducting business. This applies to start-ups as well. The reason for a large number of failures in the world of start-ups is the lack of real innovation in business ideas despite the abundance of available capital. Today's market cannot bear hundreds of Web search engines or Web 2.0 companies chasing the same idea. Without innovation in an already-crowded market, start-ups such as these will have an extremely hard time solidifying their value proposition for their core target audience and creating a business that is built for the long term.
It really boils down to the theory of "the survival of the fittest". For example, consider the role of innovation at Apple. The company was founded on the principle of changing the world and "thinking differently", yet in the 80’s became stagnant due to failed products, poor business decisions and a lack of creativity after Steve Jobs’ departure. With his return to Apple in 1996, the company re-ignited its innovation engine and has become the global standard – not only for PCs – but for the entire category of consumer electronics. Their product mix spans across hardware, software, audio, video, PCs, servers and cloud computing. Talk about how to "Think Different"!
The second point is the most important one in creating a successful start-up: the attitude of the founders. It is a vital aspect of success, as it deals with letting go of one's own "ego" – the biggest roadblock for founders in building a successful business and forming a winning team. Generally, successful founders come with "type A" personalities, a necessary ingredient in making a start-up successful. Type A personalities come with a healthy mix of personal ego, impatience, a sense of urgency, aggression and ambition – all qualities needed to push a start-up through each stage in its lifecycle. However, the key for successful founders is to understand when to set aside their egos and how to focus on core business essentials.
The young entrepreneurs should focus on solving actual problems and not the perceived ones. One must look at the business problem with critical eyes from outside rather than complacency as an insider – at the same time mindless of the trap of the endless loop of "analysis paralysis". Make quick but thoughtful, well-researched decisions. Ask yourself honestly – why will you succeed? Why will customers buy products from you? How big is the problem? If the problem is not big, chances are either there are many "me-too" players already in the market or the barriers to entry are very low.
Spend time in understanding of your future customers and their behaviors. Once you have a clear problem definition to solve and good understanding of the customer, be incredibly focused on that – and that alone. Remove all other distractions from your mind, follow your passion and commit to your own success relentlessly.
Start with small wins and expand rapidly. Be realistic in approach. Do not attempt to change the behavior of individuals overnight while proposing a new product/service. A start-up that requires a change in the fundamental behavior of an individual overnight will be met with three times more failure rate than the ones which do not require this change. Rather, focus on innovation and let that become a driving force within your team, driving your product mix, your value proposition and your entire organization.
The author of the article is Ajay Jain, the President and CEO, Quantum Secure
The second point is the most important one in creating a successful start-up: the attitude of the founders. It is a vital aspect of success, as it deals with letting go of one's own "ego" – the biggest roadblock for founders in building a successful business and forming a winning team. Generally, successful founders come with "type A" personalities, a necessary ingredient in making a start-up successful. Type A personalities come with a healthy mix of personal ego, impatience, a sense of urgency, aggression and ambition – all qualities needed to push a start-up through each stage in its lifecycle. However, the key for successful founders is to understand when to set aside their egos and how to focus on core business essentials.
The young entrepreneurs should focus on solving actual problems and not the perceived ones. One must look at the business problem with critical eyes from outside rather than complacency as an insider – at the same time mindless of the trap of the endless loop of "analysis paralysis". Make quick but thoughtful, well-researched decisions. Ask yourself honestly – why will you succeed? Why will customers buy products from you? How big is the problem? If the problem is not big, chances are either there are many "me-too" players already in the market or the barriers to entry are very low.
Spend time in understanding of your future customers and their behaviors. Once you have a clear problem definition to solve and good understanding of the customer, be incredibly focused on that – and that alone. Remove all other distractions from your mind, follow your passion and commit to your own success relentlessly.
Start with small wins and expand rapidly. Be realistic in approach. Do not attempt to change the behavior of individuals overnight while proposing a new product/service. A start-up that requires a change in the fundamental behavior of an individual overnight will be met with three times more failure rate than the ones which do not require this change. Rather, focus on innovation and let that become a driving force within your team, driving your product mix, your value proposition and your entire organization.
The author of the article is Ajay Jain, the President and CEO, Quantum Secure
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