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CHAPTER 1: COME UP WITH A BRILLIANT BUSINESS IDEA
"We couldn't sleep, because we thought it was such a good idea." NEIL BLUMENTHAL, co-founder of online eyewear company Warby Parker.
SURE, YOU WANT TO BE an empire maker. But first you need an idea. A really good one. Some might say brilliant. Startup ideas can come from just about anywheretruly. Let's look at the most common sources:
A theme or problem from your daily life
An emerging trend
A gap in a specific market
A drive to help others in an inventive way
A special skill or expertise that you possess
Which is best? We've asked scores of successful entrepreneurs and noted experts this very same question. And far and away, they agree: It's that first one, the problem or "pain point" that you personally experience on a regular basis, that is the ideal motivation for starting a company.
While you can (and should) pull from any of the sources on the above list for your startup idea, it's wise to draw primarily from your own need or frustration. Why, exactly? Starting a company will require long hours and seemingly endless focus. Both are much easier when you feel a personal connection to the purpose behind the company.
"The advice I have for entrepreneurs is... number one, you need to solve a real problem. I look for those problems in my own life. Mint was because I had a challenge managing my own finances using Quicken and Microsoft Money. So I built it for myself." AARON PATZER, founder of web-based personal finance service Mint.com, which he ultimately sold to Intuit for $170 million
If you don't have that burning, personal desire to see your concept come to fruition, we don't recommend pursuing your startup idea.
That's because the early days of starting a company are notoriously difficult. You might find yourself questioning whether you've made the right call. That's especially true as the months or years drag on, and you've decided to quit a lucrative career, invest personal savings, and sacrifice time away from family to chase your dream. (Many seasoned entrepreneurs, by the way, say it takes at least three years to find your startup footing, and that many newbies give up too soon.)
But beyond that, there's another reason why it makes sense to let your personal challenge lead the way. Chances are, others are experiencing the same problem as welleven if they're not entirely aware of it. They're called your customers.
"I spent all my hard-earned money on this one pair of cream pants that hung there, and I decided to cut the feet out of control top pantyhose one day, and I threw them on under my white pants, and went to the party. I looked fabulous, I felt great, I had no panty lines, I looked thinner and smoother... and I remember thinking, 'This should exist for women.'" SARA BLAKELY, inventor of Spanx underwear, whose net worth is now valued at more than $1 billion
Of course, you might say to yourself: "Wait a minute. Yes, this is a personal frustration of mine. And others probably experience it as well. But chances are, someone else is already working on a solution."
Guess what: You're exactly right. In some form or another, nearly every idea is already out there. But how you implement your idea, position your new concept, and execute your plan can be the defining factor of success.
Countless billion-dollar companies are based on ideas that were just tweaks of what was there before. Facebook, for example, is far from an original idea. Social networks had been around for nearly a decade, in companies such as SixDegrees, Friendster, and Myspace. Facebook's success didn't come from the idea itself but instead from countless iterations around how the product could reach customers and achieve a competitive advantage.
"Every company needs a starting point," says Eric Paley, managing partner of seed-stage venture capital fund Founder Collective. "I encourage entrepreneurs to focus more on falling in love with the problems they want to solve rather than their initial ideas."
As founders dig deeply into that original hypothesis, they will learn, adapt, hit walls, adapt again, and build critical expertise that they never considered when starting out. "In fact, in many cases the original idea later seems humorous or at least incredibly naive compared with the lengths to which the startup needs to go to become successful," Paley says.
Readers who are old enough might recall when Jeff Bezos launched Amazon.com in 1994 as a bookseller. Or when Reed Hastings co-founded Netflix in 1997 as a DVD rental service. Both have transformed their companies into something very different than their original concepts.
It's important to remember that the startup you first set out to build will not resemble the company you are operating five or ten years later. Startups, and businesses in general, evolve and take on lives of their ownin large part due to technological advances or changing customer tastes.
The most successful entrepreneurs always keep a finger on the pulse of the current market (more on that in Chapter 5). After launching, they ask questions such as "How is the product performing?" "Is it easy or hard to sell?" "What kind of value does the product provide in the current climate?" "Is it generating revenue or not?"
"A vision...is the most powerful and unique asset any company has. The original idea for my company started out of a simple pain point I wanted to fix: Find a [fitness] class easily. As ClassPass grew, my vision expanded further into making fitness a way of life. We've pivoted our company a few times, and the most important reason was because it didn't map to our true north. It's hard to always predict how customers will engage with your product; when you see a behavior that isn't aligned to your vision, you have to be able to shift gears. Ultimately, your vision has to be at the core of everything you do, even if that means adjusting or iterating your product roadmap to make sure you get there." PAYAL KADAKIA, founder of fitness startup ClassPass, a.k.a. the "Netflix for workout classes," which has shifted its business model, raised prices, and discontinued its popular-but unsustainable unlimited workout option, all since launching in 2013
Based on all that, you might find it tricky to come up with a brilliant business idea, particularly if you understand that your startup will need to keep changing and iterating. That's why some entrepreneurs also recommend coming up with a vision, which stays true even as your company morphs.
Excerpted from START A SUCCESSFUL BUSINESS: Expert Advice to Take Your Startup from Idea to Empire by Colleen DeBaise. Copyright © 2018 AMACOM/AMA. Published by AMACOM Books, a division of American Management Association, New York, NY. Used with permission. All rights reserved. http://www.amacombooks.org.
Table of Contents
CHAPTER 1: COME UP WITH A BRILLIANT BUSINESS IDEA 1
CHAPTER 2: SELECT THE BEST STRATEGY AND STRUCTURE FOR YOUR STARTUP 43
CHAPTER 3: FIGURE OUT FUNDING 77
CHAPTER 4: GET THE WORD OUTAND GET CUSTOMERS 107
CHAPTER 5: DIG DEEP TO DISCOVER CUSTOMERS' WANTS AND NEEDS 141
CHAPTER 6: BECOME AN EXCEPTIONAL LEADER 171
CHAPTER 7: PREPARE TO GO GLOBAL 211