Ten lessons from my 16-year old nephew's start-up journey
By pa360, Sep 23 2018 02:20PM
I am convinced that one day my 16 year-old nephew will become a multi-millionaire. For someone so young, he is incredibly lucid and innovative. Just last month he came to see me, about a new online business venture that he was planning to launch this year. However, as he presented both his idea and business strategy, I became convinced that, whilst the idea was a good one, he had not thought his strategy through.
Over the next 30 minutes I began to ask him various questions and the very productive discussion that ensued, brought some perspective and realism to the challenges that lay ahead of him.
Reflecting back on that conversation, I realise that it represents something of a microcosm of the many reasons why small start-ups never get off the ground or never survive long enough to realise their potential. On the presumption that learning is transferable; set out below, are the ten questions from my 16 year-old nephew's start-up journey.
1. Who told you, it was a good idea?
Sometimes when people reflect on their ideas, it can often be like a person sitting in an echo chamber. One of the most dangerous things in business is the propensity to take one's own counsel or that of like-minded others. Let's be clear, that is not to say that you should ask people over 60, what sort of products would appeal to those under 20 or vice-versa. Rather, it is to say that any product assessment, should be based on a robust and considered appraisal of upsides and downsides, by those with some understanding of what they are talking about.
2. What do you know that they don't know?
Consider this scenario: you are in a room interviewing 100 excellent candidates for one vacancy; what would make you appoint one candidate over the other 99? Progress in the world of business will present you with exactly the same conundrum. The only exception is that the complexity of the conundrum will be multiplied a thousand times over. By themselves, good ideas are not what makes you competitive. Neither, on their own, do good ideas produce the best businesses. The thing that makes the difference is when a good idea can be translated into a viable commercial proposition.
3. What's the hurry?
What is the imperative that is driving you to act now? Is it changing consumer attitudes, or prevailing economic conditions or just your own impatience for action? Time spent testing and proving new ideas, is better than time spent re-launching products that fail for lack of proper planning. Never confuse decisiveness with desperation. Learning is an inevitable and essential component of any commercial success, but learning can also be costly. In business, you can recoup your losses, win back disaffected customers and rebuild a damaged reputation, but the one thing you cannot regain is lost time. Plan it thoughtfully, use it wisely and realise it productively.
4. How long are you prepared to wait?
The point here is that, once you get started, how long are you willing to wait for success? In any business you will have some idea of what success looks like and the sorts of margins you expect to achieve in the short, medium and longer-term. This is completely normal and any business will be able to re-adjust its financial forecast in the face of changing realities on the ground. The business of business is largely formulaic, but within that formulae there are a wide variation of possibilities. Therefore, from the get go, you need to be clear about a reasonable return on your investment.
5. What do you know that you don't know?
In business, it is critical that you are aware of your space, but whilst vision is both forward and peripheral, no-one has eyes at the back of their head. Ultimately however, the key to success isn't what you know and what you can see and plan for, it is what you don't know. Whilst it is true that, to achieve success you must be able to make the most of what you have and the opportunity that is put in front of you, to make success sustainable you must be able to prepare and plan for the things that you don't know.
6. What if?
Anyone looking to start a business, needs to ask the fundamental 'what if' question. For example, what if your primary investor backs out? What if your suppliers let you down? What if things take off faster than you had planned? The greater the number of processes in your business and the more complex your supply chain, the greater the number of 'what if' questions you need to consider. If you haven't thought about the practical questions that could face your business and developed viable contingencies to moderate them, then you are not prepared.
7. What are the big challenges and small things?
It is natural and right to give the bigger issues your most urgent attention. By their very nature, the bigger issues are also the most important things and the pivots upon which the success or failure of your business is likely to rest. However, where small start-ups get it wrong, is in taking their eyes off the many seemingly less significant (but inter-connected) issues that often go under the radar. In business, the difference between success and failure isn't always the big things that you plan for, it is the cumulative effect of the little things that you ignore.
8. What are you not good at?
Knowing your short-comings is not an admission of failure. On the contrary, the ability to honestly appraise what you are and are not good at should compel you to think about who else you might need to bring on board to help you. Muddling through and hoping for the best or believing that you will work it out when you get there, is silly and costly. The possibility of working alongside suitably qualified or experienced people, at the right time, is something that you should think about now not later.
9. Does anyone know you are there?
There is a reason why businesses invest in marketing campaigns and allocate resources to marketing budgets. It is because there is no point having a unique selling point, if no-one even knows what you are selling. Effective marketing is not just about making a loud noise it is about making a loud noise in the right places and at the right times. The same principles that apply to multi-billion dollar conglomerates also apply to a small start-up, with a tiny operating budget and small profit margins.
10. What do you want them to remember?
When planning for your future customers, don't just think about what you want them to know, think about you want them to remember? There are so many points of interaction that any business will have with its customer base, from product development and marketing, through to service delivery and customer care. Each point of contact represents a unique opportunity to communicate a powerful message, establish a meaningful relationship and demonstrate the value of your brand. In visual terms, knowing what you want people to remember is the difference between writing your message on paper and setting it in stone.
In conclusion, the path to success doesn't start with the insight to capture a bright idea, it starts with the ability to ask the right questions. To that end, the most viable product of any start-up, is a penchant for perpetual curiosity.