Building a business from scratch is hard work. There are so many things you need to do, so many things to organise and so many things to make happen, often with no idea as to how any of it should be done. Where do you start? In what order should you do things? These are just some of the many and varied problems when developing a business from scratch and shaping it so it grows the way you want it to.
Consequently, not only do you have to decide in what direction you want your business to head, but how all the moving parts must operate for that to actually happen. Sometimes it feels as if you’re trying to spin a collection of plates on thin metal poles. This is a classic circus act trick and if you’ve ever been to a circus and have seen someone doing this, it’s amazing. If you’re in business for yourself, the reality of the spinning plates being your world, starts to become clear. It really is amazing to watch! One plate slows down and the performer has to run over to speed it up so it's going fast enough for it to balance on the thin metal pole. By the time he has that plate up and spinning again, the next one is starting to slow down and wobble awkwardly. So once again the performer has to run to it and speed this one up. The performer continues to add more and more plates on thin metal poles to the act. As he starts each one, another one slows down and starts to wobble. This one urgently needs his attention and once sorted, another plate needs his attention.
This seemingly endless act of plate spinning ends in one of two ways. With all the plates up and running smoothly, the performer calmly walks along and removes each plate from its pole and neatly stacks them all up. The other way, the plates end up smashing on the floor one after another in a hideous disastrous mess. However, any good performer is not to let this happen and will do everything to keep those plates spinning.
This is a perfect analogy for building a business. There are so many moving parts. It comes down to priorities. What’s your current priority? What needs to be done right now to make sure that you keep that part of your business going just long enough to get the next piece in motion? In real life terms, this is called crisis management and crisis management is never good. With a significant amount of experience in crisis management myself, it's not a place in which I like to spend much time. A crisis is a point at which an organisation encounters a significant disruption to normal operation. However, if your normal business is drowning in constant crises, then as soon as you solve one crisis you just find yourself falling into the next one, you need to carefully examine the way in which you're doing business.
Operating constantly in crisis mode is unsustainable and something will eventually give. However, when you’re building something completely from scratch and a lot of it you’re having to make up as you go, what feels like a crisis is often not. It's just the way a new business is and we’re not used to that feeling and people often believe that everything must be done, all at once, right at this very moment for the business to succeed.
The reality is however, if you try and get everything done all at once, you’ll never succeed in getting anything done at any point in time. Therefore, it’s a matter of setting clear goals and priorities. The size of the goal doesn't matter, but what does matter is the mindset and approach you take as you start chipping away your big goal. When staring up at a seemingly insurmountable mountain, you can either give up because it looks too big to climb, you can run around in a panic worrying about all the things you must do before you can climb the mountain, or you can just start climbing.
It's the people who just start climbing and little by little make their way up the mountain that in the end succeed. When you look at your business from the same point of view and divide the massive end goal up into small manageable steps, the path toward success becomes much clearer. With a persistent mindset that ‘I’m going to take this first step, then I’m going to make it to that first ridgeline. At the ridgeline, I’m going sidestep around till I find the next ascent, which connects me up to a great stable rock face with some solid footings which will help me to take the next step, and the next, and the next until I’ve reached the summit.’
Approaching any goal, be it personal or business in this methodical and relentless manner, helps to remove the crisis mindset that is so often holding many great entrepreneurs back from success. This doesn't mean you won't encounter a crisis, an avalanche or a yeti along the way, but it does mean that through taking all of these small steps along the way and working towards your end goal consistently, you can conquer any mountain.
When you’re building your business and, like the performer with too many spinning plates, you’re struggling to keep it together, step back and instead of looking at the mountain ahead, simply focus on what your next step needs to be. Once you decide what the next small step is and you’ve gone and done it, feel happy in the fact that you’ve done everything you need to, to ensure you reach your end-goal. The simple act of taking the next step, has chipped away at that mountain of a goal and all those little chips start to build momentum towards whatever you’re trying to achieve. Eventually, each step and each little chip will ensure that at the end of the day you will conquer the mountain in front of you.
Validation has a pretty clear definition. You're basically making sure something works. If it's at the airport, your passport is validated to make sure you are who you say you are. With some jobs, your uni transcripts are validated to ensure that you’ve got the results you needed. However, in the tech world, it’s a term which can be easily used and abused. Sure everyone wants to validate that their great idea is useful and people will use it, but often the unanswered question is, will they pay money for it?
The idea of monetisation is an assumption that is often an afterthought and a case of ‘well if we get enough people onboard using and liking the platform for free, then they’ll be happy to pay for eventually’. Whilst in some cases, this has worked where businesses have been able to provide a basic service for free and then paid business services, this isn’t always the case. It's like running a café for free. You get to have as much coffee as you like, but if you want to have food with that, then you pay. I’d have tons of customers, but I'd be broke very quickly, unless I raised capital, but I won't go into that again.
Many tech startups gather users as their method of validation, which is one measure. You can have a bunch of users that like or love your product, but if they're not going to pay for it, your business isn't going to be around for very long. As always, there's exceptions to the rule on this, but the harsh reality for the majority of tech businesses is that they need paying customers, without which you’ll need to be finding yourself another job.
This is why you need to validate your idea on both a user level and a commercial level. If you can't answer the question, ‘How do you make money with this?’ then don't waste your time and money building it. My first experience in the tech world was like this. My brother had a great idea to make livestock markets more transparent and efficient. It was an awesome logical idea which hadn't been done before. Validation testing showed that farmers wanted a better way to get and compare prices. Meat processors were keen to modernise practices. The problem for me however, remained … How was this going to make money? Having run another business, I was well aware of the need for paying customers. I wouldn't have had the business for six years before selling it, if I hadn’t had great regular customers coming in each day and paying for the products and services we provided.
With this livestock idea, I sat in meeting after meeting being told, “Don't worry. This is how you can eventually charge users for your service.” The grand sweeping statements of yeah, we can do this and that and charge this customer for this and then you'll gather so many users and market data. The valuation of your business will be X. I unfortunately sat there silently, listening to this crap and thinking, ‘This is so stupid,’ these people have no idea. However, I wanted to support my brother in his venture. I stupidly assumed because he knew the industry far better than I did, it would work. In hindsight, I should have said something at the time. That nagging thought in my mind that nobody would want to pay for this, proved to be correct.
Whilst the idea was great and people liked it, it was the sort of platform that should've been done as an internal project for livestock companies or meat processors to create value thorough increased efficiencies, not as a third party project. The cost to implement this with the geographically diverse customers and tailor it for their systems, proved also to be prohibitively expensive.
However, despite this being an expensive lesson, it was worth it because from this I've been able to claw away a lot of the fantasy tech industry crap to ensure anything we do now has a paying customer business base from the very start. I've had countless good ideas before and after this project, but since I couldn't work out how to make money from them, they were all archived into the business ideas folder of my laptop as a reminder. You can have a great idea, but turning it into a business is a whole other thing.
So for your next tech idea, or any business idea, when you're developing your business plan, the most important thing to focus on is who is going to pay for this and how much will they be willing to pay? Once you have this locked down, you’ll be able to see if this is going to be a total waste of time, or an amazing viable business!
I wanted to say that it began here with me leaping off a telegraph pole, but sadly, that wasn't the case, even though it would've been awesome to have been struck by my new idea at this point in time. All I remember thing was how long can I hold the Karate Kid stance for (old school Karate Kid movie not the new one).
However, I'll use this as my starting point metaphor, because starting your own business with nothing more than an idea, is just like jumping off a telegraph pole! It's exciting, nerve wracking, adrenaline pumping and a bit nauseating as well. At least when you jump of this pole the journey ends in about 10 sec, but with a business, it keeps going and going and going!
So standing there on one leg at the top of the pole, getting wedgied slightly by my climbing harness what next? I have my idea in hand, I have a vision of what I want my idea to look like, but where to from here?
I really only had two choices. I could keep my idea to myself, climb back down and be happy with life as it passed me by, forever thinking, hmmm I want what I could've done with that... Or stuff it, yell loudly and do a dramatic flying kick off the pole!
I did the flying kick!
From the moment I leapt off the pole, that was it, I was committed to making my idea a reality. For me there was no going back, I couldn't scramble back up the pole and back out. It was time to solve this problem and even though I didn't know all the details (or any of them to be exact) as to how I was going to do this, I was now committed to doing it!
To kick this new financial year off I'm going to make a comment from this year, but then we're going to jump back twelve months into the past. Totally confused? Well don't be, this is a blog about starting a business. It's a day by day account of what happens on the journey of an entrepreneur, some good, some bad, some horrible, some amazing! It's a story which like a rollercoaster (or more accurately a Wagnerian Opera) is an extraordinarily wild ride! Strap in and let's get started!
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