While there is obviously no such thing as a blueprint for success, there are a number of key points that entrepreneurs should take into consideration, which can help their young businesses stay on track:
(1) Firstly, never neglect your target market. Immersing yourself in your user-base from the very beginning will pay dividends. Time spent learning to empathise with the customer and really figuring out what makes them tick, will help you target with a laser-like focus.
Innovative companies are often guilty of trying to execute on a big vision, which is too all encompassing for the user to fully engage with.
(2) Don’t try and reinvent the wheel if you don’t need to. The Internet has democratised access to all kinds of information, and if a successful process or structure exists for a non-core element of your business, use it.
This can be anything from administrative office functions to technical elements on the periphery of your central business proposition. If an effective solution exists, then the chances are it will not add value to your business to develop it from scratch.
(3) Have a solid business model from the very beginning. Have a clear idea of the value you are creating, how you are going to capture it, and how you will be able to protect it. Having clarity from the very beginning will provide a marker of ongoing success – or not – and allow you to make strategic business decisions accordingly.
Many Silicon Valley businesses do not take this into account until a lot of resource has been expended, taking themselves in the wrong direction and forcing an otherwise un-needed late stage ‘pivot’.
(4) Don’t be afraid to learn from your predecessors, competitors and similar businesses in general. You do not need to fail to gain a learning experience, I highly recommend learning from others’ failures rather than your own.
But be careful, learn don’t mimic, success comes from applying judgment which is drawn from experience – yours and others’.
(5) As hard as it may be, try to separate your natural emotion from your business concept. You should be passionate about your venture and committed to it. But it is easy to fall in love with your idea, and ignore the signals from the market and the views of others.
Your decision on how (and whether) to take it to market needs to be founded on research and data. Too many times in Silicon Valley we have seen businesses launch which should have been altered or even killed in the planning phases, purely because a besotted and charismatic founder pushes them through. This is a recipe for failure.
Read more on Silicon Valley:
- Adopting a Silicon Valley approach as software eats Continental Europe
- “Silicon Valley thinking” as Stanford searches for British STEM entrepreneurs
- How far has UK come to close the gap on the US tech ecosystem?
— Stanford Business (@StanfordBiz) May 9, 2015
(6) Be a realist and ready for the hard work. People need to enter the entrepreneurial process with their eyes wide open. It’s going to be difficult, hard work, terrifying and elating in equal parts. Expect to be the last one in the office on regular occasions.
(7) Don’t trust what you read in the media. The press is full of colourful quirky businesses, however this is largely because they are interesting conceptually, not necessarily successful financially.
It is the unusual success story that makes headlines, not the most common one. Don’t try and retrofit a solid business idea to make it appealing. Some of the most successful companies on earth are the ones you don’t hear about.
(8) Build a strong team and a trusted network. Do not compromise on hiring for crucial roles at an early stage. Similarly, honest criticism from a trusted network of peers is indispensable.
A successful entrepreneur cannot operate in an echo chamber, so surrounding yourself with a team and advisors whose opinion you trust is essential
(9) Know when it is time to exit, either personally, when you are no longer contributing to its success, or when it has become clear that the venture will not reach your original end-point.
Entrepreneurs can become obsessed with a particular valuation or exit trigger, or they may hang on to their executive roles even when the venture requires a very different skill set. This is one of the hardest decisions for any entrepreneur, as they are heavily emotionally and financially invested.
(10) Don’t be dictated to by lists such as this! The very best entrepreneurs are those who can take in the data in front of them, assess the risks accordingly and make decisions for the long-term that are based on sound judgment. The trick is to confront risk by unraveling uncertainties early and by using your (and others’) experience and a deep understanding of your customer.
Being an entrepreneur is an all-encompassing journey, one where it is often hard to see the traps before it is too late. The successful ones are those who can demonstrate the unique ability to mark a clear target with their vision, plan a path towards it and make constant corrections as they sidestep the traps that appear in front of them. By practicing this mindset, young businesses can truly flourish.
Yossi Feinberg is a Professor of Economics at Stanford Graduate School of Business, which has launched its first UK based learning programme, Stanford Ignite-London. For more details visit the Stanford Ignite website – those interested in participating must submit applications by 2 June.