The reality of running a startup is much like the reality of anything else: Until you start, you don’t know.
No-one really knows what will happen, whether a venture will fail or succeed. There is always just too many dynamics to factor in, so the best that you can do is start, and constantly learn very quickly. Or die. (In a business sense).
There are some conventional over arching wisdoms that are however applicable across the board.
On my journey as an entrepreneur I have learnt 3 important lessons which I would like to share below and I feel can apply to any business.
Introduction: How I learnt My Lessons
Since this is my first post for Noobpreneur.com I feel its important to introduce myself and what I have learned my lessons from.
My main business is an Inbound Tourism Operator Company in Dubai which provides a variety of tourism related services in the Inbound Segment of the Travel Market. Private & Group Tours, Fishing Trips, Yacht Trips & a large floating restaurant.
This involves management of 30+ employees, business development, marketing, branding and whatever else the business needs.
Our Digital Strategy is an important sales channel, especially for our Floating Restaurant and Our Fishing Charters and generates around $50k monthly.
The rest of the time is spent on DiveAdvisor.com, a conventional ‘online startup’.
In a nutshell, its a social network & directory for the Global Scuba Diving Community & Industry. Currently we are in beta mode but have approximately 13,000 users and quite a bit of early traction.
We have developed a rather sophisticated back end and have set a very deep foundation for growth.
My role in the project is to facilitate funding and manage the project overall which has a team of 6 people, all working on different aspects of the project that must be coordinated.
My experience thus is a mix of the ‘Internet Entrepreneur’ and the more traditional, old school business.
Lesson #1: Always Assume You Will Go Over Costs
The first thing that I have learnt is that the best laid plans always go south. Whenever you are planning for a new feature, targeting a new segment or achieving a new target, 99% of the time it will not go as planned.
Unless you are doing something that you have done many times over, and in fact has been done many times its impossible to plan accurately.
Its impossible to predict how search engines will react, its impossible to predict social media reaction to your content, conversion rates, market fluctuations and a lot more. Anyone that pretends to know all these things in advance is either delusional or exceptionally experienced.
So what does this imply?
This will feed into point #2, but the main takeaway from this is that any new expansion is a major risk and must be considered extremely carefully.
Any expansion must be based on many factors, not just assumptions.
Lesson #2: Expansion and Scaling Must be Fact Driven
The 2nd most important thing to presume is that whatever assumptions you make, there is a good chance that they will be either partly, or entire inaccurate.
An important thing to keep in mind is the power rule, namely the 80/20 principle.
- 20% of your pages will generate 80% of your traffic.
- 20% of your features will drive 80% of your interactions.
- 20% of you customers will drive 80% of your revenue.
- 20% of your daily activities will yield 80% of the result and so on.
The faster you are able to recognise your 20% of each element, the higher your chances of success are, whatever your business is.
From personal experience, I feel that its important to dedicate a 100% of your effort and funding to the 20%.
Building on this, any new feature must be built based on a need.
I’ll give you an awesome example of one of the most successful startups of our time which I witnessed in person; Instagram.
What I noticed from our own account for dive advisor – when someone sees an awesome photo, they will write a comment and tag a friend in the comment, thus prompting them to view the content, something like ‘@username check this out! Lets go there next weekend’.
Surely enough, Instagram have noticed this systemic behaviour and have added a ‘share with’ feature.
This is a perfect example of observing user behaviour and adapting to it versus just presuming it to be the case.
If this type of information is not available, you should be focusing on the 20% of the features or pages that are getting the 80% of the engagement.
Lesson #3: Stay Extremely Light & Small
Just like every new feature – every new hire is a major risk, not just financially.
For me personally, I like to look at every employee as a separate business entity with costs & benefits.
Its not always possible to do it accurately, but its important to do this as far as possible. An important factor that most managers don’t factor in is the personal investment that needs to be made into each employee.
Unless you have a massive corporation (in which case you wouldn’t be reading this post on this website) with formalised business processes for each position, you will need to establish them for each new hire. Each new team member needs to bring truly unique skills that complement the rest of the team.
One of looking at is like this; the product is your baby, and your team is the mother. Your management, vision and money is the seed which in combination with the ‘DNA’ of the mother will form the baby. Its not ONLY about the money, its also about a qualitative fit.
If you pick a well motivated, talented and hard working team that is able to both share in your vision and meaningfully add to it you are probably atleast 50% of the way to success.
My main word of advice for any starting out entrepreneur would be to think extremely carefully about every new venture and stay in the ideation phase for longer.
Do Keyword Research, Study social media patterns, interview potential users, validate assumptions as far as possible and most importantly listen to your heart; are you willing to commit the next indefinite number of years to this particular venture?
Any serious new business is like a marriage with children, not a one night stand – so either get ready to change diapers or run for the door.