There is no shortage of people out there willing to give advice to aspiring entrepreneurs.
Unfortunately, more often than not, business advice comes from people who have no real-life experience of launching a successful startup. At best, such advice consists of banal generalities or second-hand wisdom. At worst, such advice is so fundamentally wrong that to follow it would be to almost guarantee the failure of your venture.
However, getting the right piece of advice from someone with solid first-hand entrepreneurial experience can be the difference between success and failure.
So StartupSmart asked some of Australia’s most successful startup entrepreneurs and community leaders for the best piece of advice they’ve received. Here’s what they shared:
The best piece of advice I ever got was from my dad when he read our initial business plan. “Sometimes it’s good to be a bit naive and just think hard things can be accomplished.” As a former CEO and business veteran, I think he knew how much work we were in for.
Being totally green, I was like: “Phhht. Dads, what do they know?” And he was right, it was better not to know and just to go for it. Knowing all the details of what was to come would have scared the daylights out of me 🙂
The best piece of advice I recall was from Niki Scevak of Blackbird/Startmate. It goes something like this:
One of the first things he said to us was that in building a startup, you build two inter-related but distinct products. You build a core product which you offer customers, but you also build a distribution product to reach customers effectively.
The best core product doesn’t necessarily always win, but an efficient and effective distribution product is critical to success. So we’ve taken that on board and really ran with it in the way we think about our business, the way we focus on initiatives and the way we are constantly critical of what we’re doing.
The best piece of advice we ever received was from the “fail fast” category – in fact, we have it printed on our wall so that we always remember it. It says: “Make it work, then make it better.”
You can spend so much time trying to get your product or service “right” before you get it to market but the reality is that you’ll never know what is “right” until you get it in the market (and “right” constantly changes anyway as the market changes).
The best thing to do is not aim for perfect first up – just get it out and test, measure and adapt continuously. In short, you’re in perpetual BETA!
The best advice I have ever received about launching a startup is to test before you build. This involves finding quick and cheap ways to test your ideas before investing them.
Before we tested the initial ideas behind OpenAgent, we thought that people would be interested in finding the cheapest agent who could offer the lowest commission. However, when we actually tested this assumption we quickly realised that the cheapest agents do not necessarily get the best financial outcome for our clients.
In many cases, you are better off paying 2.2% commission rather than 2.0% for an agent who can sell your property for $20,000 more! After testing this idea, we changed our focus to help people find the best agent at a fair price, which has resulted in far better outcomes for our clients.
My best advice is to focus on a couple of simple steps. But you have to focus on one step at a time. Don’t get ahead of yourself, don’t put the cart before the horse.
1. Plan: Look at the marketplace, solve a problem or satisfy a need in the marketplace. Then plan and scope the business or product before building.
2. Execute: You have to build it first, you don’t have anything to sell until you build it. This is a steep curve that needs focus and hard work. Get a Minimum Viable Product built.
3. Market: Now you have something to sell the most challenging part of the puzzle begins. Work out how you can break through and what you can do strategically to get your product in front of as many people as you can.
Customers make irrational decisions.In the startup industry we’re rational people with an engineering-focused culture. Because we spend so much time with our heads deep in the gizzards of computers we tend to assume our customers will behave rationally and hence predictably.
Nothing could be further from the truth! Nobody would smoke cigarettes, drive SUVs or drink carbonated sugar water if they were making rational choices. Brain scanning studies show that when we make a purchase decision, rational cognition has a very small role to play. The rational thinking we do is all in the before and the after — the research we need to do to arrive at the point of a purchase decision, and the rational thinking we have to do after we’ve made an irrational purchase in order to justify our latest crazy purchase to our spouse, boss or ourselves.
I’ve become a keen student of the field of Behavioural Economics, which studies how irrational behaviour governs consumer behaviour, not because I want to influence the global economy but because I want to understand why 7% more people click on exactly the same ‘buy’ button when it’s orange than when the button is coloured green. My cost-per-click advertising platform, my split test landing page platform and my analytics platform are the three tools of my new trade. And we call ourselves “Growth Hackers”.
Image credit: Flickr/we-are-envato
Andrew Sadauskas is a former journalist at SmartCompany and a former editor of TechCompany.
