10 Tips for Starting a New Business
- Make meaning. This is the reason that a start-up should start. Don't start a business to make money. Start a business to make the world a better place.
- Make mantra early in the life of the business. Mission statements are too long and don't get to the core essense of companies. Mantras are two to three words that describe a business. For Wendy's, "healthy, fast food." For FedEx, "peace of mind." For Nike, "authentic athletic performance." For Target, "democratiize design." For CollegeRecruiter.com, "college career connector."
- Get going. Don't over analyze and spend all of your time writing business plans. Think differently. Embrace polarizations. Think of Apple's Mac computers. They don't try to be everything to everyone and, as a result, some people love them so they've been able to carve out a highly profitable niche even though others hate them. Find one or two partners who are soulmates to help balance things off.
- Define a business model. Be specific. Always think about who your customer is and have the attitude that you're just trying to figure out how to get your money out of the wallet of your customer. Keep your business model simple. Your products should be innovative, not your business model. Make sure that you ask women to review your business model because their natural inclination is to succeed rather than kill the competition. Killing the competition is not the goal. Succeeding is the goal.
- Weave a MAT (Milestones, Assumptions, and Tasks). Milestones are like when you start shipping your products, not ordering business cards. Assumptions are things like the number of sales calls you can make in an average day and how much you'll sell to an average customer. Tasks are things that enable you to accomplish a milestone or test an assumption. An example of a task is ordering business cards.
- Focus on the ability of the organization to provide a unique product or service. Organizations which offer great value but have a lot of competition tend to compete on price. Organizations which offer great value but have little competition tend to sell their products at premium prices. The Dot Bombs offered little value to their customers and had a lot of competition. Your goal is to offer a product which is highly valued by your customers and only you can produce the product.
- Follow the 10/20/30 rule for how to make PowerPoint pitches. You should have a maximum of 10 slides: title, problem, solution, business model, underlying magic, marketing and sales, competition, team, projections, status, and timeline. Be prepared to deliver the presention in 20 minutes, even if you're allotted 60 minutes as that will allow time for questions and discussion. Use 30 point font as that will force you to minimize the number of words in a slide so you'll spend more time discussing and less time reading.
- Hire infected people. Human resources tends to want to hire people with perfect backgrounds. What you really want are people who love what you do. Do they get what you do? Are they better qualified to do what they'll be doing than you are? Apply the shopping center test: if you were to spot them across a hall at a shopping center before they see you, do not hire them unless they're the type of person that you'd go out of your way to greet.
- Lower the barriers to adoption of your products. Flatten the learning curve by making your products plug-and-play. Don't ask your customers to do something that you wouldn't do, such as pay $0.50 to do your wash when you're staying at a Hyatt. Would the owners of the hotel be willing to pay $0.50 to do their wash when they're paying $400 a night to stay at the hotel? Of course not, so why should they expect you to do so? Embrace your evangelists, who are those who think that your product makes the world a better place. These are not people who you pay but may be your customers or other admirers.
- Seed the clouds in order to increase future sales. There is an ancient adage that says you need to let a hundred flowers blossom in order to get one great flower. You may not know which customer is going to be right for your new product and that's fine. If the product is being used in ways that you did not anticipate, that's great and don't "fix" it in order to change the product so that it fits the need of the customers that you first anticipated selling it to. Instead, figure out why the unexpected customer is buying and then sell to them. Good sales fixes a lot of business problems, so don't be concerned if your sales come from unexpected places.
- Bonus tip: don't let the bozos grind you down. So called friends and experts will tell you that your new venture has no merit or that you should take the safe road by staying an employee. Let them travel the safe path -- it often heads no where. Stick to the path less traveled if you want to live your dreams.
Source: Guy Kawasaki
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