We had a record turnout at this Oahu Online Entrepreneurs Meetup, with over 50 people coming out. Our two speakers Eric and Andy shared insights from their experience, helping new entrepreneurs to avoid the most common mistakes they see.
For more inspiration, here are resources you can check out.
What’s really risky about starting a business?
There’s a popular image of the entrepreneur as a reckless gambler, ready to bet their house on a dream project. In this article by Malcolm Gladwell (author of The Tipping Point), he portrays a different figure: the savvy opportunist, who seeks out and exploits misjudged risks.
The best part echoed what Andy talked about when he described common start-up mistakes. An excerpt:
The economist Scott Shane, in his book “The Illusions of Entrepreneurship,” makes a similar argument. Yes, he says, many entrepreneurs take plenty of risks—but those are generally the failed entrepreneurs, not the success stories. The failures violate all kinds of established principles of new-business formation.
New-business success is clearly correlated with the size of initial capitalization. But failed entrepreneurs tend to be wildly undercapitalized.
The data show that organizing as a corporation is best. But failed entrepreneurs tend to organize as sole proprietorships.
Writing a business plan is a must; failed entrepreneurs rarely take that step.
Taking over an existing business is always the best bet; failed entrepreneurs prefer to start from scratch.
Ninety per cent of the fastest-growing companies in the country sell to other businesses; failed entrepreneurs usually try selling to consumers, and, rather than serving customers that other businesses have missed, they chase the same people as their competitors do.
The list goes on: they underemphasize marketing; they don’t understand the importance of financial controls; they try to compete on price.
Shane concedes that some of these risks are unavoidable: would-be entrepreneurs take them because they have no choice. But a good many of these risks reflect a lack of preparation or foresight.
What’s the one question that could change your business?
In this video, Simon Sinek talks about how great leaders inspire action. Along the way, he explains why Apple’s marketing was successful and how Martin Luther King launched a movement. When you get people to “buy in” before they’ve made a purchase, you can virtually eliminate your risk.
My favorite part was when Sinek talked about two different teams that were trying to build the first working flying machine. One team had money, top scientists, government support, major press coverage and high-level connections. The other team was led by a pair of bicycle shop owners who had little money and no one on their team had a college education. One seemed destined for success, and the other doomed to failure. Why did one win in spite of the odds?
How do you spread your idea?
Here’s a video where marketing guru Seth Godin talks about how traditional marketing is broken and what to do instead. He reels off example after example of businesses that stood out so much, people couldn’t help but talk about them.
The part I found most enlightening, was where Godin seemed to emphasize not to pick a product, but pick an otaku. It’s a Japanese term that refers to people who are obsessively interested in something. Do you have a friend who loves photography and talks nonstop about cameras and lenses? Or someone who’s such a hard-core foodie that they’ll drive to the other side of the island to try out a food truck they’ve heard about? That’s an otaku.
Find a group that’s fanatically passionate about something and has a big pain point (that you can solve). Pick an audience first, then build a product or service for them second. Such a simple idea, yet so easy to forget. You want to be the genius who creates something that changes the world. Listening to customers and just building what they need seems boring in comparison, but it’s essential.
With marketing to otaku, you’re approaching customers who are already primed; they’ve got built-in interest in what you’ve got. Contrast to a mass, disinterested audience, where it’s a hard uphill slog to convince them to care.
The irony is that Godin says “playing it safe” is the biggest risk of all. Your most rabid customers are on the fringes.
How do you fight the biggest risk of all?
There was a quote by hockey legend Wayne Gretsky that goes, “You lose 100% of the shots you never take.” It can be dangerously easy to quit when you feel like you’re not reaching success fast enough. Media loves to portray business as being an overnight success. Not the reality of 10 years of failed projects, begging family and friends for start-up capital, and the lonely nights working on your business while everyone else is out having fun.
If you need a jolt of inspiration, you can watch this video by famed NPR radio broadcaster Ira Glass.
It’s meant for storytellers and creative types, but I think his advice applies to anyone who aspires to doing quality work. The quotes are pulled from a series of interviews he did. You can find them on YouTube under the title “Ira Glass on Storytelling.”