by Seth Temko
When you truly are passionate about a startup, you get excited and the "dream building" actually activates the pleasure centers of the brain. Addiction? No. Emotional, passionate exuberance? Most definitely. In the wonder of our excitement we usually "build up the dream". We think about the myriad markets to concur, the line of products we'll create and the many offers to buy us out.
But when it comes to building a product, plugging into a market and growing a business you have to take it one step at a time. "How do you eat an elephant? One bite at a time."
One of the keys to success is to limit how many bites you're taking. Complexity adds risk of failure, time and cost. The more features and functions you want to add to your product, more complexity. The more distribution channels and methods for your sales strategy, more complexity. The more markets you want to simultaneously enter, more complexity.
Complexity = more risk of failure, more time, more cost.
Tools to Check Against Complexity
1) Pick a single market to focus on. The US is the largest economy in the world. Just about any product or services market in it is at least $1 billion dollars in revenue. Hair dryers? Yes. Wrapping paper? Yes. Staplers? Yes. This is plenty large for any new company. Choosing a single market will simplify your product, marketing and sales efforts. (More on the topic.)
2) Pick a single go to market strategy. You need to enter a market with products or services and the big question is how to do it - direct sales, web sales, affiliates online, retail, wholesale? Your strategy dictates who you need, what you need to support the effort and how you structure pricing, support, etc. As with markets, pick a single method for selling to start. Every method is different with different support efforts required. Choose your method, design your strategy, set metrics for measuring success and change course if you're not getting results.
3) Define your core offering and stick to it. Whether you offer services, software or tangible goods stick to a defined AND LIMITED set of services, software features and product functions as you start your endeavor. No entrepreneur wants to pass up an opportunity and often the impulse is to jump on any perceived opportunity - a business development deal, a sale, a customer request, etc. Small startups have too few resources to truly be good at more than just a few things. Most people point to small companies being nimble and quickly able to change. This is a good value. But change and an overly broad product/services offering is not the same thing. Adding more and more to what you offer while maintaining everything else is a sure way to be "an inch deep and a mile wide". That is not a good position for a startup to be in.
Acid Test of Simplicity
A good acid test for any of the three tips above is to choose some people in business that have a good grasp of business but don't necessarily know a lot about your company. Describe to them your strategy with a market, market entry and product/service and watch their faces. When you see them shift position, scrunch their eyebrows or look up and left with their eyes, that means they are uncomfortable with what you just said or trying to process (understand) what you said.
This usually means you're struggling to communicate your business and often your struggling because it's not a simple tale. At the end of your "pitch" ask point blank, "does that sound simple or complicated".
Simplify, simplify, simplify your efforts. Ask all the time is this what I should be doing, is this definitely important and is this the best priority for what we're doing? Eyes on the prize. Eyes on the priz
Best of success.