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 or strike on their own as an entrepreneur?
After almost 20 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. Back then “special effects” meant a latex mask, some ketchup 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…and how to beat them to the punch.
Find a weakness. Back in 1995, Amazon knew that Borders and other retailers weren’t on-line and they didn’t have a platform for making suggestions. Also, they were limited by inventory carrying costs, geography and other restrictions of “brick and mortar”.
Instead of cowering in a corner to let the plodding retailing monsters catch up, Amazon quickly exposed their weaknesses. Can you believe that was only 20 years ago when Jeff Bezos was the “little guy” and Barnes & Noble was #1?
Outmaneuver them on social media. Over 95% of potential customers start with a Google search to get to know you before they will buy from you! Then they check your social media profiles – you personally, not just the business.
Why not turn the tables on your competitors? You may even find out their weaknesses before they do!
Do your homework. A great place to start is to go to your competitors’ websites and social sites like Facebook pages or LinkedIn Company pages. Have they created a community as inforln.com has done and are they engaging with their customers as forbes.com does with their “Voice” pages (e.g., SAPVoice)? Do they have a useful and active blog?
Ask these questions….
Are they helpful? Is their website useful and engaging like one that I love –domo.com? Do they provide interesting content on how to use their products and services? Chances are you can do a better job.
Are they easy to buy from? Is all your competitor’s useful information gated behind forms that make you give up all your information and endure a call from a salesperson? You can be more user-friendly than your competitors are. Think about how easy Uber is!
How’s their User Experience? Do they have a YouTube channel that tells you how to do things, not just with their product but in general? How is their user interface? Is the product or service easy to use?
What are the gaps? Are there any missing features or options that customers seem to want? Does it solve their problems? Steve Jobs was a master at finding this out, and Apple in his second tenure was in many ways a startup. Microsoft was Michael at the time – Apple was like Laurie on steroids!
What’s their reputation on social media? Check Yelp, Angie’s List, Twitter and so on. How do they respond to complaints and problems? Do they have solid social media strategies, 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.
How nimble are they? Can they react quickly to market trends. Is their website mobile friendly? If it’s a tech company, do they have a real cloud options? How are they responding to disruptive trends like exploding growth in consumption of content on mobile devices or 3D printing?
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.
Beat them to the punch. A great example of this is Hubspot. While plodding outbound marketers continued to engage in “hand-to-hand combat”, Hubspot invented inbound marketing and used social media to amplify its effect.
Build a social culture. Richard Branson and Virgin are the masters of social leadership. They inspire employees to build a tribe and generate new ideas. They provide great content and customer service. Even though Virgin is a huge corporation, it feels like a “virtual beach”.
Prototype your new ideas quickly. Remember that if you’re a small business or startup, you’re not weighed down with all the bureaucracy. Samsung is one of the biggest companies in the world, yet they’re churning out new products and releases every few months. A good book to read on this topic is The Lean Startup by Eric Ries.
Provide exceptional customer service. There’s no reason why, regardless of your size, that you can’t wow your customers with a more personal touch. Virgin is great at this, as are Zappos and Warby Parker.
Zappos sells shoes and Warby Parker sells glasses. It’s the WAY they sell them with exceptional customer service that makes the difference!
“Bottom Line: What is it that you do that’s unique, better and faster than what they do? Like Muhammad Ali did, find your best punch and hammer them with it.“
3) Call for help…but don’t scare the neighbors
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 probably a big touch tone on the wall (millennials, ask your elders) and the land line (remember those?) was cut anyway. Sorry, sweetie – no cell phone for you. 🙂
Get on the phone. It amazes me how sometimes millennials don’t seem to realize that there’s an actual phone attached to their smart phone! Texts and e-mail are poor communication tools (in my opinion) to have a real conversation. Just pick up the phone if you want to ask someone for help or (even better) offer to help them.
Reach out on social media. You should definitely leverage social media tools as much as possible to expand your network and engage with potential customers. For example, you can:
Approach people on LinkedIn…but make sure you personalize your message. Follow their Linked Posts and make comments. Explain mutual interests and congratulate them on their successes. Share their content. They’ll be much more likely to reciprocate and – eventually – to do business with you!
Follow them on Twitter and they may follow you back. I’ve met some of the most wonderful, interesting people on Twitter. Like Ted Coine (Twitter @tedcoine) and Mark Babbitt (Twitter), authors of a wonderful and timely book called “A World Gone Social“.
But don’t shrill. Introduce yourself and show them why you’re interested. Don’t sell to them right away. That’s like pounding on the door of your neighbors house when you’re desperate – like the neighbors in Halloween, they’re not home!
Your prospects won’t open the door if you’re talking at them rather than with them.”
Substitute social media for traditional advertising. We all know that big media such as TV really isn’t working anymore. Cold calling is almost completely dead and e-mail marketing can be easily added to the SPAM list if you’re not providing value. Trust me – your big competitors are too slow in this area. They’re spending tons of money on producing slick ads that nobody listens to or shares.
Startup incubators such as the Founder Institute from Adeo Ressi (Elon Musk‘s buddy, btw) 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 2.0″ 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 besides Halloween that has stood the test of time!
Bottom Line: There are lots of inexpensive or free online resources to get educated about how to build a thriving new business. The more you know about how to be successful as an entrepreneur, 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 businesses 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 Greg 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)firstname.lastname@example.org or connect with me on LinkedIn.
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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 atdan(dot)aldridge(at)performaapps.com or on his social networks: About.me,LinkedIn, Twitter, Google+, Scoop.it, WordPress,Slideshare, Pinterest andFacebook. His company is on LinkedIn, Twitter, Facebook, Google+, YouTube,Scoop.it and Slideshare.