Dorian Scott has been working with startup founders at ecentre for more than 10 years. He brings a wealth of knowledge and provides sage guidance to growing businesses. He shares insights from his experiences here.
Over the past 10 years, I have met with hundreds of aspiring entrepreneurs to listen to their business ideas. It’s a job that I love and it has taught me a lot about what makes a successful entrepreneur in the early stages of developing a business idea.
When the entrepreneur shares their business idea, I am delighted because it means they've already overcome the common mistake of keeping an idea secret. Unfortunately, some entrepreneurs are so worried their idea will be stolen that they keep it secret for too long.
Successful entrepreneurs know that most ideas are not truly original and the real challenge is bringing them to market quickly. This is best achieved by strategically sharing with potential customers and partners the problem you are solving – although not necessarily how you will solve it.
To plan or not to plan
One thing that surprises me is when an entrepreneur presents a comprehensive business plan before doing market validation work. The business plan generally should be written after validation has been done to show that there is both an attractive market and a business model that delivers value to the customer and captures value for the entrepreneur.
A successful entrepreneur will use a flexible and dynamic approach to planning. The Business Model Canvas or Lean Canvas are useful tools for mapping out the key elements of the business at an early stage. This can later be developed into a full business plan.
An entrepreneur with a business idea needs to know how to validate an idea by asking the right questions. Invariably if you tell someone about your product they will agree with you that it's great. This feedback is not helpful and can result in false confidence.
The challenge is to ask questions that inform you about the problem you are solving, who has the problem and how they currently get around it. This leads to insights that help validate your business proposition and the design of your solution.
Clarify the problem
Entrepreneurs are more likely to succeed if they spend time clarifying the problem or pain their business solves for customers. The better they understand their pain, who has the most pain, and how they get around it, the better informed the solution. Conversely, the inability to succinctly describe the problem being solved or the need being satisfied is one of the first signs that an idea will struggle to find a market.
Put yourself in the shoes of your customer and think about the benefits of your product or service. Good communication skills are important to sell your idea to others, to build a team, to attract investment and to find partners.
Focus, focus, focus
Successful entrepreneurs are very focused. Many entrepreneurs try to address as broad a market as possible, especially when offering a platform technology or service that goes across industries. However, most successful platforms have grown by building dominance in a small, underserved niche, then expanding into other market verticals.
Startup investors generally balk when entrepreneurs define broad markets -- for example, "everyone with a smart phone."
It takes time and effort to start a business -- and successful entrepreneurs commit their time and funds to their idea. It's possible to start a business on a shoestring, but you will need some funds and a lot of time. Successful entrepreneurs are passionate about growing their business -- and persistent.
The best way to become a successful entrepreneur is to learn how to use a start-up methodology such as Continuous Innovation and Lean Startup. Using contemporary entrepreneurial tools can help to focus on the right things at the right time and increase the chances of success.
Fortunately, there's help available for entrepreneurs that can reduce risk and increase success. There's no need to go it alone.
Startup 20/20 Workshops
Get started validating your business idea by registering for one of the free Startup 20/20 Workshops delivered by ecentre with the support of ATEED (Auckland Tourism, Events and Economic Development).
Workshops will be held in locations throughout Auckland from, 25 September - 9 October 2019. Find a location near you and register here.