These 8 Business Beliefs Are Killing Your Startup
By Ana Yoerg
“The common rule of thumb is that of 10 start-ups, only three or four fail completely. Another three or four return the original investment, and one or two produce substantial returns. The National Venture Capital Association estimates that 25% to 30% of venture-backed businesses fail,” according to Wall Street Journal reports.
Yet VC’s like Marc Andreessen have publicly noted that there is no rational reason for it. We have the talent, we have the ideas, and there is plenty of market demand for smart products and killer services. Our current economy has enough space to accommodate the growth of one hundred times more startups into fully-scaled, sustainable businesses.
So, why aren’t there more Dropboxes and Airbnb’s?
Is the startup success story fated to be like a Hollywood wonder, where only a few actors in LA finally make it to the top?
Possibly. But maybe it’s because too many people are clinging to old business beliefs.
Teaching Old ‘Business Beliefs’ New Tricks
Now, if you’re a relatively young startup founder, it’s strange to think you can have “old” business beliefs. It seems like something reserved for silver-haired COO’s at Fortune 500 companies, rooted in traditional business practices from decades of experience.
But first-time entrepreneurs do have old beliefs. They come during those “I have no idea what I’m doing” moments, when to find an answer to a new question or challenge, they fall into the trap of Googling or getting counsel from peers — both of which result in a mountain of startup advice that doesn’t apply to the problem.
So, what do they do? What any human would: they turn to their own experience for answers. And that is where the dangerous moment comes … when old, life adages are not only false, but when clinging to them blocks their chances of success.
Here are a handful of ‘old’ business beliefs that could be killing your startup:
1. Follow my vision.
Ever hear the one about the executive who surrounded himself with “Yes” people? He always felt confident in every business move, but all those yes-es caught up with him in the end when the customer said “No.” Too many entrepreneurs rely on generic market research or common assumptions to confirm their vision and seemingly “no-brainer” solution. If you have honest conversations with the customers whose problems you are trying to solve, you’ll learn what people really want, not what you think they want.
1. Figure out what you need, then ask for it.
In business, this means pricing a product based on the sales margins you need in order to make the profit that will work on your balance sheet. Ignore that me-first instinct. Instead, work backwards and first find out how much a customer will pay. For instance, at last year’s Lean Startup conference, Lit Motors explained how they built a simulated dealership experience just to find out if their product had a viable market. When 15.7% of showroom visitors put money down on the spot, they knew they could move forward with their pricing strategy.
3. Perfect planning = excellent execution = success.
Think about all of the planning that goes into a wedding, and how little of the detail anyone remembers from it. So, what if the timing is a little off on the march, or if the groomsmen’s ties are a slightly different shade than the bridesmaid dresses.
In the same way, your product release is important to you, but if everything isn’t 100% as you planned it, will anyone else even notice, or care? No. Just get your product out the door so you can begin the process of learning and iterating. As General Patton once said: “A good plan, violently executed now, is better than a perfect plan executed next week.”
4. People buy pretty things.
No, people are tempted to buy pretty things. That’s why fashion magazines exist. What ultimately drives them to purchase is psychology and an interactive experience. To make people buy, make it easy for them to behave the way you want them to; focus on interaction design, not visual design. An upscale boutique may have hardwood floors and relaxing music, but they’re not selling the kind of volume as the franchise grocery store that carefully places high-margin products at eye-level.
5. Have lots of friends.
Ah, the popularity trap! In business, this translates to the the problem of vanity metrics like visitors, views and followers, and thinking that Facebook “Likes” are going to impact your business. Ditch those and focus instead on what directly impacts your business’s bottom line: conversions, retention rate, customer referrals and even (gasp!) revenue.
Note, however, that metrics by themselves are not enough; as Ash Maurya has said, [metrics] will only tell you that something is going right or wrong. To understand why and to get to the real insights, you need to get to the people behind your numbers — the customer.
6. Customers are loyal.
Dogs are loyal, customers are not. Maybe you make some nice moves and get a handful of seemingly dedicated, loving customers, but they’re not going to stick with you if you mess up more than once. Given that so many startup founders are millennials, who are known for their constantly shifting brand loyalties, this may already be apparent.
So, if all customers are fickle, how do you keep them? This is where startups have an edge on bigger businesses. They’ve gotten notorious for their tendency to pivot, but pivoting is a great way to acknowledge that your current path is not earning or retaining enough customers and that you need to shift gears. If more companies had short runways and had to make these hard decisions sooner rather later, there might be fewer fizzles, or long, drawn-out product failures.
7. If it ain’t broke…
Tradition assumes that every business’s goal is to achieve product-market fit, to find that special formula that will skyrocket sales and ensure long-lasting success. But if you don’t innovate and change the formula, your product will eventually become irrelevant and customers will get bored and move on (see #6).
The best startups are the ones that have struck fear into large companies in their space because of their ability to not only iterate faster, but to be constantly moving targets themselves and therefore harder to pin down and crush as competition. So, even if it’s not broken, fix it. Strive for continuous innovation; it’s as essential as changing the seasonal inventory in a retail store. Keeping things fresh for your customer makes them come back for more.
8. First product, then marketing.
In a way, this is a correct belief because everything needs marketing. People, places, products… you can build it, but they won’t come unless you communicate the value to the right audience. Startups need to dedicate resources to marketing, because as sexy as the “we went from zero to one million users with no marketing” story is, it’s just not the norm. But this is again where timing comes into play.
Consider marketing as a component of your product, not a supplement or something that comes after. For example, FEED Projects are like the Toms Shoes of bags, but rather than push their mission through advertising and storytelling, they’ve built it physically into the product.
Each bag has a large number printed on it, and that number represents the amount of nourishment (i.e, lunches, vitamin supplements, etc.) children in need will receive via their in-kind donation to the WFP. It’s a built-in story that gets people thinking and talking about the product and mission in the same breath, which is the kind of word of mouth marketing that turns customers into brand ambassadors.
About the Author
Ana Yoerg is a founding partner at Pivotal Pod, a content marketing agency that specializes in working with startups. She is, at heart, a word-nerd who believes that great branded content (e.g., creative ad copy, email, blog posts, bylines, video) coupled with well-timed, agile PR campaigns can dramatically boost user growth and build customer engagement for any startup. Pivotal Pod is the producer of the Lean Startup promo video, “What would an entrepreneur
do?” featuring Marc Andreessen and Eric Ries. Clients have included Opera, Wikia, Mobile Theory, Rumgr, VegasTech, and Explore.org, a project of the Annenberg Foundation.
Getting Ahead: Don’t Forget to Feed Your Spirit
By Mindy Thomas
As Blake Shelton from the popular show “The Voice” might say, “What kind of bull crap is this?” To the contrary, Blake definitely knows what I’m referring to because it’s clear that one of the ways Blake feeds his spirit is through country music.
In today’s never-ending world of staying on top of your game, it has become increasingly difficult to stay supercharged. Whether you are an entrepreneur, a college student, or someone who is looking to make career changes, empowerment can come in different forms, including feeding your spirit.
One of the things I have observed with people who are trying to make changes in their lives is that their level of unhappiness continues to get progressively worse. It’s not just their job that is making them anxious, depressed, or downright miserable. I am finding that 9 times out of 10, these same people rarely, if ever, make quality time for themselves. In fact, people go for weeks, months, or years without feeding their spirit.
Research shows that 75 percent of the gainfully employed would rather take a raise than have more time off. In other words, people are NOT taking time for themselves. They are not engaging in doing things that nourish their being or feed their spirit.
Let me provide a little more clarification about what feeding your spirit looks like.
Feeding your spirit simply means enjoying yourself and doing things that bring you happiness. It’s about opening your heart and finding ways to bring a smile to your face. It’s about making time for fun and laughter.
Feeding your spirit reminds you of who you are (or who you used to be). Remember those days when you used to laugh hysterically with your friends or family? Remember how damn good it felt? Filling your spirit with nature and meditation could also make you go inward, resulting in feelings of gratitude and intense pleasure.
You see, when we spend more time working our tails off and thinking about everything outside ourselves, we lose ourselves. We forget about us. Ultimately, we end up starving our spirit. Who’s kidding whom? You know whether you’re starving your spirit or not. It’s easy to figure out. Are you creating any free periods to have fun? If not, you might want to look at ways to incorporate time into your schedule to connect you to your heart, in turn lifting you and your vibrational levels up.
Just last night, I saw a wonderful picture of a friend on Facebook who had a brain hemorrhage one year ago. She posted these words, “With my salsa teacher and salsa friends who gave me back my joy and love of dance. Dance keeps me young and alive!”
This morning my client, who is a crackerjack of an attorney but bored out of her mind, proclaimed that she would return to her yoga practice. After attending a class last week, she realized how grounded and clear she became after taking time to fill her spirit. She feels infinitely more empowered by allowing herself “feel good” time.
Another client sent me a text message a few months ago telling me he was in NYC for the weekend. This was his way of “filling up his spirit.” He adores big cities and had been down and out for more than three years after his layoff and, yes, he agreed, he had done nothing to replenish his spirit since the layoff.
This past summer another client called me from a Phillies game. Even though he adored baseball, he hadn’t been to a game in two years. This man sounded so revived and energized as a result of making this incremental change. I was truly happy for him.
Listening to music, singing out loud, driving with the convertible top down, breathing in fresh air, going on nature walks, sky gazing, visiting the beach, the mountains or a lake, turning off your cell phone, being quiet for two minutes, getting a massage, playing with your pets, cooking a nourishing meal for your family, and entertaining your friends are all great examples of ways to feed your spirit.
However, feeding your spirit is remarkably different and unique for each person. The question you need to ask yourself is what helps to open your heart? What is the one thing you could do for yourself this week that would make you feel more cheerful and connected? The other question you need to ask yourself is what is this going to cost me if I don’t take the time? You and I both know there’s always a cost.
I would like to suggest that you consider being kinder to yourself as a possible way of staying supercharged as you drive towards your goals of getting your business off the ground or starting a new chapter in your life.
Think of yourself as if you are a garden. Nurture yourself just like that garden. You deserve it. Your spirit craves it. And, there’s no question that you most definitely are worth it.
About Mindy Thomas
Mindy Thomas is a cutting-edge career consultant, professional résumé writer, professor, and entrepreneur. Through her company, Thomas Career Consulting located in Philadelphia, she leverages her 25-year business background with a solid foundation of career solutions for challenging times. Email Mindy at
[email protected] , follow her on LinkedIn , and visit her website to learn more about her expert career consulting services.
Operating A Business in the Age of the ‘Brand Experience’
By Julius Talvik
The business world has been through a remarkable transition in the last three decades, a time that has seen traditional concepts of brand move away from the physical to the virtual world. The preeminent philosophy of these times came to be embodied in a software development term known as “user experience”—what a customer experiences in electronic formats.
The difference, it was believed, between a “good” user experience and “bad” one was the difference between a company’s success and its failure. Thus, user experience became the key to thriving in the digital revolution.
In the last decade or so, however, the preeminence of user experience seems to have come full circle. There has been a shift back toward the physical world in which all aspects of a business—its products, architecture, printed materials, software, mobile applications and everything in between—have to be considered as a unified whole in order for companies to succeed.
The story of how we got here, and what it means to businesses moving forward, is a fascinating tale that holds lessons for anyone willing to tune into its subtle, but powerful messages.
The traditional meaning of the term “brand” emerged in the late nineteenth century and evolved slowly but steadily for most of the twentieth century. A brand was an idea applied to a physical thing; most often it was a product, but could be a service, too. A brand encompassed everything the product or service promised to the customer on rational and emotional levels.
Enter the Personal Computer
Between the advent of the personal computer in the early 1980s to the mid-1990s, however, the notion of brand began to seep into the electronic space—the so-called “virtual world.”
The concepts of branding that once applied to physical things got transferred to digital assets such as websites and operating systems. The old notions of brand did not go away, per se; The Coca-Colas and McDonald’s, the Tides and the Chloroxes of the world still existed – but the electronic world took center stage.
The future of brand was virtual and user experience trumped all. It is important to consider the etymology of the term “user experience.” It is a software term for the relative ease with which a customer can interact with a piece of software to accomplish some desired goal, ideally a goal involving the purchase of product.
Two leading examples of this shift are familiar enough: Apple and Amazon. The “insanely great” Apple operating system and Amazon’s “crush-all-competitors” online marketplace transformed the digital world. In 1999 or so, a third player entered the scene when Google launched its minimalist Web experience.
Soon, all the complexities of the Internet were reduced to a single box on a white page. The Internet, Go
ogle promised, could be had for the simple price of a few search terms and a click of a mouse. It was the ultimate user experience and several multi-billion-dollar fortunes materialized out of that little box on the white screen.
During this time, new verbs entered the lexicon. Business leaders fretted that their companies would get “Amazoned.” Consumers mastered the art of “Googling.” Suddenly, user experience was all anyone could talk about.
Boomerang Effect
Then along came the iPod and, with it, iTunes. As if by magic, the virtual and the physical were once again reunited. User experience and brand, it seemed, were not separate and mutually exclusive things, but different aspects of the same concept. The user experience is the brand experience, and vice versa.
Not only was the iPod a beautiful physical product, an icon of industrial design, but its operating system and the brilliance of iTunes were perfect matches for the simplicity of its design.
Stepping into one of Apple’s new retail stores, it was as if the Apple operating system had inhabited the “geniuses” in the blue shirts, the retail experience and even the very architecture of its stores. If one could use an iPod, Apple promised, one could navigate the store just as easily.
Almost overnight, business experts who only a few years earlier had extolled the age of user experience and cautioned against getting Amazoned were saying that getting “Appled” was the real threat. Today, even Amazon and Google, those paragons of the user experience, are manufacturing consumer devices. Kindle and Google Glass are but two examples among many.
Likewise, Amazon’s warehouses and Google’s campus in Mountain View have become physical extensions of their parent companies, much as Apple’s retail stores and its Cupertino headquarters seem to embody the very essence of Apple.
Implications for Business
While this shift to the brand experience is an interesting turn of events, what is the business leader of today to make of the evolution? To me, it means that to stay ahead of the technology/content curve, companies will have to align all brand touchpoints—the physical and the digital manifestations of their brand—around their core principles. This is the “brand experience.”
Increasingly, technology innovation will merge with new hardware devices to connect the disparate consumer decision points of our lives. This is exemplified in the much talked about “Internet of things” where every device we own—our cars, our refrigerators, our wine cellars, our televisions and more—will be networked and controlled through handheld smartphones, laptops, tablets or something else not yet invented.
In this world, where physical and digital are one, the brand experience will become dominant. The philosophy of brand experience is already transforming the retail setting, but it will surely infuse restaurants and entertainment soon enough.
To succeed, and in some cases to survive, companies will have to learn to capture value from their own virtual and physical infrastructures. The Apple Store turns the highest profit per square foot than any other, even Tiffany & Co.
Apple didn’t get there selling diamonds and platinum, mind you, but by applying its exceptional “brand experience” to everything it does—its products and its branded physical environments at the same time.
Businesses will likewise have to develop a consistent voice and tone on all channels. In essence, they will need to create a brand operating system in which the things that work on one device work on all others. This will require a deep understanding and appreciation for the company’s brand pillars and how those pillars apply to each medium and guide the development of future iterations.
Where do we go from here?
The evolution to the age of brand experience will have many beneficial and largely predictable effects on global industry, as well—a sort of 21st century multiplier effect. These impacts will be felt on both sides of the equation, as the ecosystem necessary to support it all will spread into retail, consumer products, shipping and architecture as well as in the sphere of digital design and development.
Companies will have to focus everywhere at once and think hard about how the personalities of their carefully crafted brands get translated into physical and digital things, so that customers can immediately recognize the brand operating system wherever they encounter it. This will require simplification and streamlining to a degree never seen before.
About the Author
Julius Talvik is co-founder and Chief Innovation Officer of unison.net, a brand innovation company in Washington, DC, that develops physical and digital products for companies around the world. He is multi-talented creative director with expertise that stretches from technical development, identity design, and experience design to music production, print collateral and product packaging.
Connect with him @UnisonBrand