Some risk is a natural part of being an entrepreneur and many entrepreneurs experience some exhilaration from all this. They are, after all, creating a new business from nothing, innovating with new products and services and creating companies that make a huge difference in the world.
But while there are no hard and fast rules for creating something totally new, there are some basic ideas that seem to work well for many entrepreneurs. Though they certainly do not guarantee success, they may indicate whether you’re at least headed in the right direction.
Below are five ideas you should consider incorporating into all your startup ideas.
Always Think Disruption
The best startup ideas are about doing something better. As a result, they usually change the way everyone used to do things, making the old way obsolete.
This is what entrepreneurs mean when they talk about disruption.
For example, Dropbox almost made external hard drives obsolete. And that’s not all. The service also ended up creating a whole new market complete with competitors in the rapidly expanding cloud storage niche.
WordPress and Adobe Muse are two related but different products continuing to disrupt the web design market.
Entrepreneur Ilya Pozin shares 10 more startups that are changing the world and what we can learn from them in a post on Forbes.com.
Apply the 25 Percent Rule
One way to think about your product or service, especially in a crowded niche, is to think about how it will compete.
One of the easiest ways to do this is to employ what’s called the 25 percent rule.
Your product or service should be able to do what competitors can for your customers, only 25 percent faster or more effectively.
They might receive 25 percent more referrals for their businesses by using your service or your product or service should be able to deliver customer satisfaction at 25 percent less cost.
Be Prepared to Fail Fast
With the risk of starting a new venture comes the risk of failure.
But failure too can help an entrepreneur learn and improve a product or service. The key is to fail early so the failures can help you find success.
Even huge companies the size of Microsoft have learned the importance of failing fast in an effort to keep up with the rapid pace of innovation. Don’t let your startup be any different.
Build a Strong Supportive Network
Startups need a support system. Since your business is unlikely to be an overnight success, you will need a loyal group of savvy users to sustain you in the beginning, giving you feedback on your product or service and helping you grow.
Creating a network will require offering people something of value in return for their involvement, often free of charge.
Whether it’s the free content you provide on your website or perhaps free information videos related to your product or service, offering value for free is a great way to build a community that will help you spread the word about your startup to others.
Keep Your Startup Lean
Keeping your startup lean means taking a very different approach to business. Think virtual offices, scaling as you grow, funding as you profit and hiring as you scale.
Steve Blank, a consulting associate professor at Stanford University, explains in a post for Harvard Business Review why lean startups are so important.
According to the decades-old formula, you write a business plan, pitch it to investors, assemble a team, introduce a product, and start selling as hard as you can. And somewhere in this sequence of events, you’ll probably suffer a fatal setback. The odds are not with you…
Blank quotes Harvard Business School Research that suggests 75 percent of all startups will fail.
Instead, Blank favors the “lean start-up” model. The approach looks at experimentation and customer feedback as an alternative to a lot of elaborate planning. But it also requires less investment up front.
Is the lean startup approach for you?
Idea Photo via Shutterstock
You could not have said it better. Start with an amazing idea, do more than what your competitors can do and start as lean as possible. This is actually a fool-proof way to success. It is only a matter of implementation.