Founding your own business has never been easier than today. If you start small, you need far less time and resources than you imagine. In the book, Rework, author Jason Fried shares why plans are actually harmful, why you don’t need outside investors, and why you’re better off ignoring the competition.
Next, check the waters: don’t leave your day job to labour 100-hour weeks, but instead gauge your passion by squeezing to work on your project in a few hours per week. Neither do you need to take on crushing debt amounts; only use whatever facilities and equipment you have at your fingertips, or can afford easily. Only use external investment as a last resort, as it will not only dilute your stake in the idea but the process of looking for funding is time-consuming and distracting. In most cases, all you need is a laptop and an idea to get started; everything else is peripheral to your success anyway.
When starting your company, focus all your efforts on building the core of your business. Without this core, your business cannot function. For example, hotdogs are the core of a hotdog cart operation. The core should be something you think will be stable in time. Amazon’s core isn’t only about books; it’s about fast shipping, affordable prices and a great selection. Publishing fads come and go, but these are things people will always be willing to pay for.
Once your core is ready, launch immediately. Don’t wait for every aspect of the business to be fully complete. You can work out the details later. When 37signals launched its Basecamp product, they could not even bill customers yet. But with the monthly billing cycle, they knew they had four weeks to fix the issue. Just get started and wing it.
You need less than you think to start your own company – launch as soon as the core of your business is ready.
The only way you can attain the sense of urgency and devotion that running a successful company requires is by doing something that matters to you. If you’re going to do something, make it something you can be proud of.
Some people start their business with an exit in mind from day one. This is the equivalent of entering a relationship with the aim of breaking up – absurd. Just like a relationship, running a business should be based on commitment and passion rather than the willingness to sell out at any moment.
Making a stand for something that is important to you is also a great way to attract loyal followers and fans. Consider Vinnie’s Sub Shop in Chicago: they stop selling sandwiches in the afternoon because the bread is no longer as fresh as it was in the morning. The extra income they could earn in the afternoon would not make up for the loss of pride they would suffer from selling mediocre sandwiches. Their customers love this devotion to freshness.
When you’ve got a stance, picking a fight with an established rival is a perfect way to reinforce that. If you run a small coffee house that you see as an individualistic haven, then put yourself as the anti-Starbucks. Getting an enemy will give you immediate place in the mind of the consumer, and a great story to tell.
Do not, however, let your competitors dictate your own strategy. If your immediate goal is to copy the iPhone 5 or to come up with a response to it, you are doomed to always be one step behind your competition. Focus on what you’re doing, not on what others have done.
Make a stand for something you care about. If your company is successful, others will try to copy it. Your only defense is to make your product inimitable by injecting it with what is unique about you.
For example, Zappos CEO Tony Hsieh is so obsessed with customer service that he decided to make it the guiding ethos of his company. While competing shoe stores can sell the same sneakers as Zappos, they cannot imitate this utter devotion to good customer service.
A great way to find your passion is to make a product or service that you yourself would love to use. For example, when track coach Bill Bowerman wanted lighter running shoes for his team, he poured rubber into his family’s waffle iron, inventing the famous Nike waffle sole.
Usually, people expect great things from products they buy but are disappointed at the actual performance delivered. Your product should be the opposite: make it so simple and easy-to-use that people will love it even more than they expected and tell their friends about it, too. If you accomplish this, you can sell your product like a drug dealer: give people a taste for free, knowing they will happily come back for more.
Once you have a product that is unique and keeps customers coming back, you can share everything you know without giving away any secrets that would create imitators. Just as great chefs can promote themselves by publishing cookbooks with their prized recipes, you too can promote your company by sharing your valuable experiences and specialized knowledge openly.
Better yet, teach people with how-to guides, courses and videos! Most companies – especially big ones – are so secretive that you can gain a real competitive advantage by actively teaching people about things you’ve learned.
Make your product inimitable so that you can share everything you know.
Many small start-ups long for mass and greater recognition, but bigger is not always better. Consider elite schools like Harvard and Cambridge. Do you think they aim to expand their campuses all over the world, educating hundreds of thousands of people annually? Unlikely. Instead, they are comfortable being the size they are, as should you.
For example, having less mass and being off the media radar allows you to experiment with your business without potential screw-ups being publicized. Just like Broadway musicals are first tested in smaller cities before reaching New York, you too should take advantage of your obscurity in the beginning to experiment with different ideas and processes.
Being small also allows you to keep your entire team on the frontline of the business, interacting with customers firsthand and hearing their requirements and feedback. A complex hierarchy can muffle that feedback and slow you down. When everyone is responsible for customer satisfaction, you can respond to any problems quickly, which is essential for effective customer service.
Nevertheless, being small to begin with does not mean you should forget that you’re running a business. Many start-ups live in a make-believe land where they happily spend investors’ money without worrying about profitability. Such companies are not really businesses but merely glorified hobbies of their founders. If you want to build a successful business, you should have a clear path to profitability in mind from the very start.
Relish the good sides of being small, but don’t forget you are running a business. When chef Gordon Ramsay fixes ailing restaurants in his TV show, Kitchen Nightmares, he always starts the process the same way: by cutting out around two thirds of the menu items.
Similarly, when you run into problems with your product, consider cutting features from it. If you want to make something great, you need to chisel away stuff that is merely good. In fact, embrace your constraints. Just like Ernest Hemingway wrote Nobel-winning fiction with very sparse language, you too can make a great product or service with very few features.
If your contest offers a product with lots of features, don’t seek to unify them by giving them everything they do plus more. Alternatively, offer less features , making the product easier to use and simpler. Decide what not to sell add value. Think about it: not every painting in the world is displayed in great art galleries, but rather a select few. You too have to remove the garbage and personally vouch for whatever is left.
Keeping your product or service simple is not easy, though. As you gain more and more customers, you’ll start getting more and more requests to develop the product further, both from users and from within your own team.
Never overreact to these requests by immediately modifying your product and adding new features as requested. If you do, your product will rapidly become unrecognizable, and probably scare away new customers since the changes have been catered to the wishes of existing ones.
Say no to even the best-sounding ideas at first. If a customer request is truly important, it will keep coming up so often that you can’t ignore it.
Less is more – start saying no and keep your product lean. There’s nothing wrong with having communications that reflect the true size of your company. Be proud that your small size lets you communicate frankly, contrary to the meaningless jargon-filled press releases of big corporations. For example, don’t talk about how “transparency is a corner stone of your communications strategy,” when you could just say you’re honest.
Advertising and active marketing are expensive ways to connect with customers. Instead, build an audience by sharing information that they value and willingly come back for. This way you will get their attention without paying a dime.
Remember that in a small organization, marketing is everyone’s responsibility. Every email, phone call, blog post and social media update constitutes marketing and can deepen your bond with customers. In fact, why not give customers a behind-the-scenes view of your company, so they can get to know you and your employees.
When you do strive for actual press coverage, go for niche rather than mass media. An article in a well-targeted small magazine or blog will create much more website traffic and sales than a story in a well-known newspaper. This also allows you to approach journalists with personalized calls or notes rather than with mass press releases.
The bond you form with customers will inevitably endure some rough weather as well, and being a straightforward communicator means being frank about your shortcomings and imperfections too. No one likes companies that try to sweep problems under the rug. If there’s bad news to be told, skip the pseudo-apologies in corporate lingo such as “We apologize for any inconvenience this may have caused you.” Instead, think about what kind of apology you would like to hear as a customer.
Don’t emulate big corporations in your marketing and communications – be honest, personal and nimble.
Check out my related post: How are companies driving innovation?