If you’re an entrepreneur like I am or you have ever been involved in a startup, you probably heard some HORRORfying statistics like these. 50% of new businesses fail in the first year and 95% fail within 5 years. Yikes! These are knee-buckling, paralysis-inducing numbers. Why is the rate of failure so high? If this is so, how does anybody get up the courage to launch a startup?
After 15 years as a serial entrepreneur, I’m convinced that the reason for the high rate of failure can be summed up in one word – FEAR. I’m also convinced that there are some simple steps you can take to summon the courage not only to start a business, but to stick with it when times are tough and you’re facing your demons.
I’m a big movie buff and believe that much of life can be explained in movies. Seeking guidance (ok, just entertainment ;), I recently revisited my favorite horror flick of all time – the 1978 classic Halloween. I’m pretty sure it’s still the scariest movie in history. Back then “special effects” meant a latex mask, some ketchup, stop-action and a few freaky camera tricks. Yet this movie will scare the bejesus out of you – even today.
In many ways, the fear and excitement you feel during the movie are like those you experience with a startup. Unlike the movie, however, you don’t have to panic like Laurie (Jamie Lee Curtis) and you can face Michael Myers. With today’s technology and online resources, it’s not as scary as you think. You just have to turn on the lights, turn off the scary music and follow these simple survival guidelines.
1) Know your environment
One of the most frightening elements of the movie is that Laurie can’t see in the dark. She doesn’t know where Michael is going or where she can hide. In scary movies the power line is always cut, and (curiously) there’s never any backup power supply.
Not so in business. There’s no reason you can’t learn everything you need to know about your competitors. You have search engines, social networks, competitive information online and any number of sources to get to know them.
A great place to start is to go to your competitors’ websites. Demo the product or inquire about the service. How is their user experience (UX)? Is the product or service easy to use? Are there any missing features or options that customers seem to want?
Then, see what people have to say about them on social networks; Yelp, Angie’s List and so on. How do they respond to complaints and problems? Do they engage on social media and really try to adapt their product based on feedback, or are they just monitoring conversations and going into “damage control” mode only when they have to. Can they react quickly to market trends, like exploding growth in consumption of content on mobile devices?
Bottom Line: Your competitors aren’t so scary once the mask comes off and you know their weaknesses.
2) Play to your strengths
Laurie can’t evade the slow-footed Michael even though she’s obviously more nimble. She cowers in corners when she needs to be using her quickness and wits to blunt his strengths.
There’s no reason why you can’t calmly beat a larger competitor to the punch. You can encourage creativity in your culture to generate new ideas. You can prototype your new ideas more quickly without all the bureaucracy. You can provide exceptional customer service with a more personal touch. You can run rings around the big guys with social media. What is it that you do that’s unique, better and faster than what they do? Find your best punch and hammer them with it!
Bottom Line: Once you know your competitors’ weaknesses, figure out how your strengths give you a competitive advantage.
3) Call for help
I don’t know how many times I’ve watched scary movies and thought why don’t they just pick up the phone? OK, Halloween was in the 1970’s. That phone was a probably a big touch tone on the wall (kids, ask your elders) and the land line (remember those?) was cut anyway. Sorry, sweetie – no cell phone for you!
Nowadays you’ve got so many tools to reach out and talk to people who can help. Instead of limping across the street to pound on the door of the one neighbor who’s not handing out candy on Halloween night, get out your tablet and fire up Google. Consult your social networks. Search “How to start a new business” on YouTube. Call in an army.
Startup incubators such as the Founder Institute from Adeo Ressi can really help you to be prepared and develop skills needed to build a successful startup. They can help you develop a business plan, prepare your prototype, vet your ideas and assist with funding. The Founder Institute program is FREE, although you have to take a test to get in and you have to give up some control of your business in the form of equity. It’s worth it if you’re having trouble facing starting a new business.
A book I’ve found very useful for my startups is “The Art of the Start” by Guy Kawasaki, former “chief evangelist” for Apple.
I also like onstartups.com, a new blog for entrepreneurs from Hubspot founder Dharmesh Shah. If you really want to go old school, don’t forget your Small Business Administration (SBA) at www.sba.gov. It’s one of the few holdovers from the ‘70’s that has stood the test of time.
Bottom Line: There are lots of inexpensive or free online resources to get educated about how to start a new business. The more you know, the less you’ll fear.
Remember, it’s not as bad as you think
Maybe after reading this blog you get the sense that I’m trying to frighten you into never starting a new business. That couldn’t be farther from the truth. Starting and building my business has been one of the most exhilarating and rewarding experiences of my life.
Remember those stats I quoted earlier about over 50% of new businesses failing in the first year and 95% after 5? It turns out that’s an urban legend. Recent statistics from the SBA show that two thirds of new employer establishments survive at least 2 years, and 44% survive at least 4 years. Don’t let people scare you with statistics or rumors. Mikey’s stomach didn’t rupture from Pop Rocks and Mrs. Brady never dated Mike Brady in real life. 🙂
I hope this blog has helped take some of the fear out of starting a new business. If you are involved in a startup, then I wish you luck and success. Don’t be scared – be safe out there. And by all means, go see Halloween again!
If you have a story about a startup, good or bad, I hope that you will share it with me by leaving a comment. If you would like to contact me directly, I can be reached at dan(dot)email@example.com. If you love movies, I’m your guy.
Posted by Dan Aldridge
Dan Aldridge is the CEO of Performa Apps, an ERP software consulting firm specializing in Infor LN and Baan. Dan has almost 20 years of ERP implementation experience. He has helped dozens of companies with their ERP software implementations and training including Carrier, Mercedes Benz, Snap-on Tools, Blue Bird, Flextronics and a host of other manufacturing companies. He is a serial entrepreneur and blogger with his new site inforln.com.
You can reach Dan on e-mail at dan(dot)aldridge(at)i-app.com or on his social networks: About.me, LinkedIn, Twitter, Google+, Scoop.it, WordPress,Slideshare,Pinterest and Facebook. His company is on LinkedIn, Twitter, Facebook, Google+,YouTube, Scoop.it and Slideshare.