Guest Post by Cynthia Kocialski
It’s the dream of many people, to be an entrepreneur, to start your own company, and to make it successful. It’s the American dream. Every year, many people step up to the plate and take the challenge. They want to build a start-up company from the ground up.
#1 It’s Not About The Product
When an entrepreneur thinks about starting a company, it’s the product that comes to mind first, but what’s next? Here is where the entrepreneur starts to stumble most of the time. A product is absolutely critical and necessary, but it is no more a company than a human heart is a person. It’s a combination of functions working together that make a company. Entrepreneurs spend most of their time focused on the product, agonizing over every detail, defining the product to perfection. A start-up is not about the product, it’s about the creating a company and a business, and the product is at the center of the start-up. Entrepreneurs need to deliberately and intentionally build a company and a business, just like they do the product. A start-up is about this everything else.
Everyone has heard that most new businesses fail, but why? It’s very rare for a start-up to fail because it couldn’t technically develop the product or define the service. The first big hurdle is marketing. Entrepreneurs fall short when it comes to building awareness and promoting the product and company. Marketing generates demand for the product so that sales can capture revenue from the demand. All too often, entrepreneurs focus exclusively on the product, and marketing becomes an afterthought. Unfortunately, products don’t sell themselves and if we build it, they will comes never works. The absence of a marketing plan, and vague plans such as giving it away free or going viral are viewed as an impending marketing crisis.
#3 The Biggest Success Factor
The single biggest factor for success is the team. A team is not a random collection of individuals with no rhyme or reason as to how they will make the business succeed. Another common mistake is for entrepreneurs to enlist their friends or family in the business, or just anyone who is willing to work on the project. This isn’t building a viable business. It’s the difference between scribbling and drawing. Entrepreneurs need to put some effort into who needs to be on the team, find potential team members, and enticing them to work on the project. A team is more than the founders and the employees too.
#4 The Product Is Ready, Now What
Once the entrepreneur has the product available, the next thought is always finding customers. Customers can be elusive. The difficulty isn’t knowing who they are, it’s getting customers to speak with the start-up or getting their attention. Most entrepreneurs will take the obvious approach; they’ll send an email or cold call. This is not very effective. The customer’s cold shoulder surprises many entrepreneurs. Why aren’t they enthusiastic about the product? Why isn’t it love at first sight? It’s not that the customer doesn’t want to hear what the start-up has to say, it just that they are being approached incorrectly.
#5 The Investor’s Perspective
Regardless of whether an entrepreneur needs to raise capital for the start-up, it’s always a good idea to approach seasoned investors. These investors have seen many start-ups, they’ve seen the failures and they’ve seen the successes. Investors are naysayers, which mean they first look for reasons to not invest, and if they can’t find the flaws then they consider the proposal as a possibility. This makes them great for advice. Why re-invent the wheel? Why re-learn the hard business lessons that others have learned before? Mistakes and experimentation can be costly in terms of both time and money.
Startup from the Ground Up shows entrepreneurs how to think about the business that needs to be wrapped around the product. It provides readers with practical advice on how to go from that spark of product concept to an early stage company.
Cynthia’s latest book is Start Up from the Ground Up: Practical Insights for Entrepreneurs. You can visit her website at www.cynthiakocialski.com.