As an advisor to business professionals and entrepreneurs, I often hear about an innovative new solution that could lead to business growth or a new business. Unfortunately, in my experience, it takes much more than an innovative idea to launch a successful business today. Some of the additional elements are critical and often overlooked in your passion to move ahead quickly.
For example, a while back a passionate entrepreneur approached me with an innovative solution for reducing world hunger, but hadn’t focused on the fact that hungry people often don’t have any money, and governments are not easy customers. It was no surprise to me that all the investors he approached were less than excited about his plan for growing a new and nutritious algae.
Over time, I have collected a list of new business attributes that go beyond the initial idea or solution, which often are more critical to long-term success and satisfaction. Here are some key ones that I find often overlooked in the passion of the moment or the rush to get started:
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Aim your innovations at real customer problems. Solutions and inventions alone do not make a business. Find market evidence of customers with means who are willing to pay for a solution. In fact, I recommend that you search for the problem first, rather than creating a solution looking for a problem. Be customer focused, not technology focused.
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You are just as important as your innovative idea. It takes just the right person to implement an idea, no matter how great. You can be that person, if you demonstrate and practice commitment, determination, a real plan, and show that you never give up. As an investor, I want to hear about you, what you have done, and why this is important to you.
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Assemble the resources needed for the business. A single innovator can envision or even build an innovative prototype, but it takes a team to build the solution into a business. Even adding money won’t do it – you need to create a committed and engaged team and partners for marketing and sales, as well as production and distribution.
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Choose a business model that will win in the market. You need a business model that provides a good return for you and your team, long-term growth, value to your customer, and differentiates you from competitors. Selling below cost doesn’t do it, nor does giving it away free, and hoping to make it up in volume. Pay attention to the market.
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Focus on the infrastructure needed for your innovation. New ventures with major innovations, called “disruptive” solutions, such as the advent of electric vehicles, require changes in support technologies, more marketing for customer education, and new government policies. Elon Musk mitigated this by making his battery patents free to all.
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Commit to a higher purpose than just financial success. I find that today’s customers respond with greater passion and loyalty to businesses that profess visible support to a higher cause, such as reducing world poverty, or saving the environment. Find a higher purpose in your dream that matches your values, and could benefit from your strengths.
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Beware of the allure and demands of early adopters. Customers who are early adopters love new things, and they always want more features and options. This is a small segment, and can lead you keep spending, and turn off the mainstream customers. Segment your market carefully, and don’t get mislead, only to fail by early adopters.
- Don’t be afraid to pivot as you learn from the market. Successful entrepreneurs are always analyzing market feedback, remain agile, and are quick to make corrections or change course if things aren’t working. They recover quickly after a failure, learn from mistakes, and never give up. Many startups I know fail by simply giving up too soon.
A legendary pivot example in social media was the transformation of Odeo into Twitter. Odeo began as a network where people could find podcasts, but iTunes began taking over the podcast niche. The company decided to make a pivot and run with the idea of a status-updating micro-blogging platform.
While the cost of starting a new business continues to go down, the market challenges have actually increased, due to world-wide accessibility of the Internet and instant communication accelerating the pace of change and technology. For your own satisfaction, and the thrill of success, it pays to think more broadly about your innovation before jumping in with both feet.
Marty Zwilling
*** First published on Inc.com on 12/22/2022 ***
via https://www.AiUpNow.com
January 6, 2023 at 09:12AM by MartinZwilling, Khareem Sudlow
