5 LESSONS START-UPS CAN TEACH BIG BUSINESS OWNERS
Start-ups are always advised to look towards industry giants to better understand their markets, digest years of lived knowledge so they don’t repeat the same mistakes, and learn how to build a company that stands the test of time. But the reality is that start-ups have SO MUCH to teach seasoned business-owners about innovation and staying current in an ever-changing economy, too.
As a start-up junkie myself, I pulled together the 5 most important lessons I think anyone can learn from start-up culture – regardless of how long you’ve been in business.
1. Validate your assumptions
In the start-up world, we’re pressed to challenge every assumption we make; assumptions about who our customers are, what problems they face, what gets them out of bed in the morning, etc.
Once we’ve been in business for a few years, we begin to feel like we know our customer intimately. We can speak in their voice, anticipate their needs, and identify their problems better than they can. So, what more work is there to do?
Well, a lot.
Too often businesses get complacent. They begin to predict what their target market wants and how they want it. Without being curious and asking the hard questions, they risk missing the mark. This is what happens to the Blockbusters of the world…they get SO deeply engrained into the voice of who their customer WAS, they fail to see all the ways that their customers are changing…or worse, they fail to see that their market has shifted altogether.
However long your business has been around, whichever stage your business is in, it is imperative that you’re consistently testing your assumptions against what your real customers are saying…not just the assumptions you’ve formed from working with them in the past.
2. “Perfect” is the enemy of “good”
The business world loves to throw around acronyms, and start-ups are no exception. An MVP (minimum viable product) is THE best tool that business owners and innovation teams have at their disposal. It doesn’t matter whether you’re barely scraping together funding to start your project or if you have a healthy budget to work with. There is just no sense in throwing money into an idea you haven’t validated (see point #1). An MVP gets you testing your idea in the most scrappy way you can.
It can be so easy to balk at the idea of launching a new product or entering a new market.
“What if they don’t want it?”
Or even more important…
“What if they won’t pay for it?”
The simple answer is that you won’t know unless you test it. But that doesn’t mean you have to build it out and spend countless resources (time & money) to test it. Get lean. Kickstarter campaigns, mock-ups and prototypes all serve the same purpose – they gauge interest in a more real-world scenario. The key here is that the customers have to be interested in throwing something behind it. The point is, let the perfectionism go and truly come up with the least complicated, cheapest way to convey the value of your offer to the customer and let them give you the feedback you need to iterate and launch!
3. Culture is everything
If you picture a hip warehouse office with young techies wearing sneakers and playing with dogs when you hear the word “start-up,” you’re probably not alone. Start-ups are well-known for their casual work-environments, fun atmosphere, and relatively flat hierarchy. Seasoned businesses? Not so much.
That’s not to say that all start-ups are a joy to work at. The fast-paced, high-pressure, ambiguous environment can cause burnout to even the brightest of employees. But one thing they do have right: they attract the kind of people that fit their brand and their culture. They create a space for people to bring their full selves to work. They hire people who have unique backgrounds who bring diverse and unique perspectives – people who are primed to innovate. They look for entrepreneurial candidates who understand that it’s every person’s job to move the ship forward. This kind of culture sets a company up for quick growth – it’s the kind of place that people aspire to work for.
You want a company that people feel excited to work for – not just because of the work, but because of the culture and who they get to be when they show up for work.
4. Run your own race
So many businesses are focused on their competitors. What new launches are going on in the industry? How can we launch something similar? Are our prices comparable? And while it’s important to be well-versed in your market and have an understanding of your competitive landscape, if you’re too busy looking around you, you’re not spending enough time focusing inward.
Start-ups are often industry disrupters. When they play by their own rules, they don’t have to work within the confines that their competitors set up. By offering something completely novel, they no longer have to price the way their predecessors did. And if they’re targeting a completely new market or creating a whole new niche in the industry, then they really can write their own rules.
A good start-up takes what it’s learned about its customers and uses that information to identify gaps among its competitors. It narrows-in on that gap and fills it with its own unique solution, and then it runs its own race.
5. There’s no such thing as a fail
I don’t know whether it’s a good attitude or a big ego, but start-ups aren’t quick to admit defeat. Instead, every misstep or flop is taken as a learning opportunity. This means that pretty much every outcome is a win; either you walk away with money in the bank, or you walk away with some really important insights for your next approach…a Pivot.
Replace failure with the word pivot in any business conversation, and you have a mindset that primes you to take bold actions and see the positive in even the most dismal of situations. This isn’t a good strategy simply because it makes you feel warm and fuzzy, though. It’s actually good for your bottom-line.
Imagine launching a new product and finding that no one wants to buy it. You could take that as a sign to abandon ship. OR, you could use it as a case study to understand why it didn’t work and apply those lessons to a relaunch. By taking the second approach, you might find that you had everything right except you were targeting the wrong audience, so you pivot (see, it’s a magical word) and relaunch. The result? The product sells like hotcakes and you’re thanking yourself that you didn’t jump ship when things got tough.
Simply looking at a failure as a failure means you lose valuable data and insights about your market and are potentially leaving money on the table by letting go of a winning idea too soon.
If you’re finding your business is becoming stagnant, struggling to scale to the next level, or blending in among a sea of competitors, chances are that an injection of a start-up mindset could be the way out of that rut.
Lindsay Sacco serves as the Client Services Associate at BGSD Strategies.