Startups and the trials of being an entrepreneur

I think this should be the motto for entrepreneurs and people involved in startups...

It is not the critic who counts,
nor the man who points out how the strong man stumbled,
or where the doer of deeds could have done them better.
I think this should be the motto for entrepreneurs...
The credit belongs to the man who is actually in the arena,
whose face is marred by dust and sweat and blood;
who strives valiantly;
who errs and comes short again and again;
who knows great enthusiasms, great devotions;
who spends himself in a worthy cause;
who, at the best, knows in the end the triumph of high achievement,
and who, at the worst, if he fails, at least fails while daring greatly,
so that his place shall never be with those timid souls
who know neither victory nor defeat.

Teddy Roosevelt

Do you know how many prototypes did James Dyson make of his cyclonic vacuum cleaner before he succeeded? Five thousand!!

Edison spoke about perfecting the filament in the electric light bulb. "I have not failed 700 times. I have succeeded in proving that those 700 ways will not work. When I have eliminated the ways that will not work, I will find the way that will."  That is a heck of a lot of determination he showed there.  Would you have gone as far?  I’m not sure I would have got beyond 650

If you think things are going to be easy as a startup then you are wrong. If you fold under pressure then don't start. If you only have a limited stomach for the fight then don't join it. Being an entrepreneur will test you like you can't imagine. It will rob you of sleep, cash, time, family life and peace of mind.

One company I was helping had a fantastic technology. It could save mobile phone companies hundreds of millions of dollars. Their patent was sailing through the Patent Office until one Sunday when a blocking patent from Motorola was filed. To say that was a bad day for them can't express the long hours and horrible working conditions they had endured to get that far. I doubted they would get up. Instead of walking away they spent six intense weeks reviewing the patent situation. They did what they had said previously was impossible and came up with a better solution.

I was pretty angry at them because I had pushed as hard as I could to get them to consider alternative technical approaches. However, the anger was nothing compared to my delight for them at coming out of the abyss stronger than they had been a few short weeks before. Now they are on their way to Aston Martins all round and we are all very happy.

Could you have got up then?

How about a good friend of mine who has a very seasonal business. His life is a roller coaster of hyperactivity in Summers and then hoping that the sales start to drip in during Winter before his cushion of cash goes bang. He employs a fair few people and I admire greatly how he bears the pressure both on himself and imposed by caring for this larger 'family'.

Could you bear that year in year out?

Apparently the SAS candidates that make it through aren't thinking, "I can't do it," as they slog along with massive packs on their back, the good ones are convinced they can do it.

Still got some ambition to make it left? Okay, answer me this. Out of ten, how much do you want to achieve your dream with your business? Got your number in mind? Good. Now if it's less than eight experience suggests you aren't going to do it.

Richard Jones creates, improves and turns around technology businesses and helps large companies develop innovative new products and services.

This article above is made available under the "Attribution-NonCommercial-NoDerivs" Creative Commons License 2.5 available from http://creativecommons.org/licenses/by-nc-nd/2.5/.

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Unfair advantates - why technology startups need them

I love the phrase "unfair advantage."  Peter Crouch is a striker at Liverpool who towers over defenders and so gets more than his fair share of headers.  I always look for the same thing in startups (and I don't mean tall people). 

So what can these advantages be?

Preferential market access. 

• Does the company have an exclusive contract with a customer?
• Is there exclusivity for supply in a particular country or region?

Preferential access to technology. 

Is there unique access to a component, product or service that gives the company some form of competitive advantage?  This could be from having developed the intellectual property themselves or having put in place contractual relationships allowing them to exploit it – leading to:

• Lower production costs
• Lower distribution costs (smaller, lighter products)
• Lower prices
• The ability to use a different (and presumably better) approach to a particular problem (e.g. recording music on a hard disk instead of a CD leads to the I-pod)

One of the most important aspects of ‘unfair advantages’ is that they allow you to compete in markets that you might normally ignore.

Consider broadband for a second and some accepted logic for some Western countries.

You don’t want to dig up loads of roads and pavements to lay fibre to carry Internet traffic as this can be very slow, expensive and fraught with legal/contractual problems in some places.  The capital costs of such a roll out can be enormous (I’ve done a $500 million plan for this – expensive isn’t it) and trying to recover these costs can be difficult if the prices paid by users are already falling due to competitive pressures.

As with many cases of creativity, you can look at all the assumptions and start to smash them to see if there is an opportunity.

• Why is the digging expensive?  Because the roads and pavements are already in place.
• Would it cost as much to put fibre in place in new developments?  No – it would be a fraction of the cost.

Now if you have enough new developments then maybe you can start to use the unfair advantage principle.  Can you lock up exclusive contracts with major developers?  Can you build a marketing team designed to sell to developers?

If the answer is yes then you can build a company that delivers broadband (plus TV and phone services) at significantly lower capital costs and can compete in a market that previously you might have assumed was too ‘hot’ to handle.

If you don’t have the unfair advantages then you can look at your market and try to identify what you could do to develop some.  It’s a very interesting exercise in innovation that can allow your company to take huge strides forward.

This article above is made available under the "Attribution-NonCommercial-NoDerivs" Creative Commons License 2.5 available from http://creativecommons.org/licenses/by-nc-nd/2.5/.

 

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