After starting several successful companies over the last 30 years, having to close one of them in the early 2000s and helping multiple other startups to succeed I learned some valuable lessons on entrepreneurship and business strategies.
1. You are not the average.
As an entrepreneur you might think that what you identify as a huge problem for you is probably also be a huge problem for others. That might be true, but often it isn’t. Before you start your endeavor make sure you step out of your echo chamber and talk to people who do not belong to your inner circle and don’t want to make you happy. Invest a substantial amount of time and effort in researching your target audiences needs. To prepare you for the pre-start research, I can recommend reading "The Perils of Perception" by Bobby Duffy.
2. Study the competition.
You need to know who your competitors are. You should also understand the products or services that are in development or already on the market. You also need to know how your customers are currently solving the problem that you are about to tackle. There is no such thing as an unsolved problem. There are only badly solved problems.
This knowledge will help you build a better product or service and better market your product or service. Whenever I get a pitch deck I do a quick research to find out how potential customers are solving a certain problem today and who the competitors are. In over 90% of cases I find, within 20 minutes of research, significant technology or competition the founder forgot to mention in their pitch deck.
3. Find your niche before tackling huge markets.
Start in a niche and avoid expanding into large markets in the initial stages. Thinking “if we can capture just 1 percent of the US” will turn into a mistake. Niche marketing can be extremely cost effective if you keep a few things in mind:
Meet the market’s unique needs by offering something new and compelling.
Speak the market’s language and understand its needs and.
Adapt your messaging, product features and everything that is published to the audience in the niche you are tackling first.
4. Listen to your customers.
Salespeople know it> "always listen to your customer". Entrepreneurs should do the same and they should not be afraid to adapt rapidly.
Entrepreneurs can evolve their business only if they're listening to customer feedback. It may not mean much if one customer doesn’t like your product, but if many of them complain about a missing feature or a not so pleasant experience, listen and be ready to adapt. Especially if you see that customers stop using your product or service without the underlying problem being solved or the need being satisfied.
Whatever you do, be it a change to your marketing, service or product, pay attention to customer feedback and be all ears.
Throughout all my years as a CEO, I always took a few hours per week or month to chip in on the hotline or in customer service department answering calls and emails. The insights I got by doing so turned out to be invaluable for the success of the whole company.
5. Respond to change.
In business change is inevitable and those capable of responding are flexible and versatile.
An entrepreneur must be prepared to accept change and pivot or adapt business operations accordingly. Be flexible without loosing focus. If a shift in your product or service is warranted, don't be left behind. Realize from the start that where you are today is likely not to be where you’ll be tomorrow. Ignoring the need for change will result in loss of customers, profits and could even kill your business.
As an entrepreneur, you should know that the world is evolving rapidly. A company or technology from a year ago could change the world today.
Try to be a part of the change and not the resistance to change.
7. Conserve cash no matter what your business plan tells you.
The best advice I can give you is: live as cheaply as possible.
Entrepreneurs should be as niggardly with their money as possible. Even if your business is exceeding your expectations. Keep your powder dry and prepare for the unexpected. You need to be able to deal with any rough patch that arises. Conserving several months' worth of operating expenses in the bank will help you survive most unforeseen circumstances.
Raise as much money as you can when you can. Be assured, that if you need fresh money to survive, raising cash will be almost impossible.
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