Entrepreneurship is inherently full of uncertainty, risks, and failures. Mistakes are part of the entrepreneurial process and should be embraced as such.
It is important to qualify that a post like this is not meant to suggest that an entrepreneur needs to learn all the ways others have made mistakes and thus try to avoid making any mistakes of their own.
It is neither possible nor productive to attempt to do so. Entrepreneurship is inherently full of uncertainty, risks, and failures. Mistakes are part of the entrepreneurial process and should be embraced as such.
I can share 3 broad lessons that may be of some use to someone who is thinking about starting a business.
1. Create something people want:
Fundamentally, a business is about Demand and Supply.
There is no shortage of problems in the world. Can you help a group of people solve a problem, meet an unmet need, or make their quality of lives better in a way that no other business is doing?
Can you do it with the resources that you have at your disposal? Are people willing to pay you for it?
For a first time entrepreneur, it is usually better to start small, validate your idea (i.e. ensure that people are willing to pay for your product or service), and grow the business from there.
If you can’t get people to pay for your solution, product, or service, it likely means one of the following:
- You don’t understand the problem or are unable to see it from the perspective of your customer
- Your customers don’t understand the solution you are providing or are incapable (too complex etc.) of using the solution and/or
- There are already similar (too much competition) or better solutions available in the market
Don’t fall in love with your idea and create a product just for the sake of creating a product. Create something people want.
2. Create a culture of testing:
Try to isolate a few key metrics that are directly linked to your business’ bottom line and take a systematic approach to test different approaches, strategies, and tactics to find optimizations and maximize your return on investment (ROI).
For example, for an online business owner, some key metrics could be:
- Traffic to the website (per day/week/month/year)
- New leads as a percentage of traffic
- Number of sales per lead
- Cost per new lead/customer acquisition
- Profit margins etc.
If you are new business with limited resources, you can only choose few metrics for testing. Make sure you choose something that is linked to your business/financial objectives and start testing and optimizing.
Use the 80/20 rule and stick with the few strategies and tactics that provide the bulk of the business results.
Even choosing one metric and optimizing it is far better than running your business on wild guesses and autopilot. You can always add more metrics for testing as your business grows.
The idea is to engrain the testing mindset into your company culture from the very beginning.
3. Learn how to sell:
Here, I am using the word “sell” as an umbrella term for everything that is required to make a sale (Public Relations, Marketing and Advertising, Sales as well as Customer Service and Customer Retention).
It is a fallacy to think that if you have a great product (that people are willing to buy) then you don’t have to sell.
People are inherently lazy and would much rather delay the buying process even if the product or service is something that is beneficial to them. The sales process is meant to be a proactive approach to help your prospective customers make the buying decision NOW.
Learning sales is about learning buyer psychology and all the ways in which you can make your offer attractive to your prospects so that they make the buying decision NOW rather than some arbitrary later date.
If your product can really help your customers to solve their problems, then wouldn’t it be your moral obligation to make sure that they take advantage of it as soon as possible?