The most successful business owners strive to keep learning.
Warren Buffet claims that reading 500 pages a day is the secret to his success. Bill Gates reads 50 books per year.
They also learn from their mistakes.
During the last 22 years, I went through several statements or beliefs about how to run a new business. I can say today that I broke most of them – but I learned from my mistakes.
Hopefully, if you have an idea to launch a new product or service to the market, I can help you by passing on what I have learned.
Drivers of Success
When I started my first business, I firmly believed the “idea” was the core of the future business and determine success or failure.
But an “idea” is something intangible.
I realized that an idea is shaped and twisted during the first years of the company.
The “idea” is not fixed, and it doesn’t determine the success of the business.
Then I thought that a fleshed-out accurate business model was the most important factor in how to run a new business.
But a business model is dependent on market context, consumer behaviour, maturity of the consumer, etc…
These variables are dynamic and change really fast. If you take time to develop a business model that takes advantage of these variables, you will find the conditions have changed by the time you go to market.
I was wrong again.
But I learned that the business model should be flexible and evolve during the creation and adoption curve.
From these experiences, I realized the only thing that matters to run a new business is the execution.
It’s important to think of your business as a living organism. You need to revisit and evolve as the contributing factors change continually.
Ideas change, and business models evolve, but a start-up with the right resources and capabilities to execute a framing hypothesis but breaking them and reframing it again fast, has the key driver to succeed.
Business Partners
Starting a business with a partner does offer some advantages, but a partnership can limit your room for growth and restrict your skillset.
The majority of business partnerships will also fail.
From my experience running a business as a unique partner, going it alone could be a fantastic experience to quickly test yourself and develop soft and hard skills.
In his book “el libro negro del emprendedor,” Fernando Tris De Bes states that sometimes it is cheaper to pay a psychologist to reinforce your self-awareness and run the business alone rather than have partners in business.
For a business partnership to succeed, there needs to be alignment between partners. Without a shared vision, shared goals agreed on performance indicators, and ongoing dialogue, business partnerships will fail.
That’s not to say that partners in business are always a bad idea.
Entrepreneurs are driven by a vision of where they want to take their business and what they want to achieve. This “illusion” can be a catalyst for success, but it can also a negative that results in failure.
If you lack objectivity, you can’t process the reality of your business situation, and it’s impossible to move forward.
Partners in business can help you to see the situation as it really is. Having the right business partner working with you can help you achieve results beyond your expectations.
But in any case, I wouldn’t recommend involving more than two partners.
All of the companies that I started with three or more business partners failed. The reason for that failure was due to a lack of purpose alignment or even lack of purpose altogether.
Which brings me to my next point.
Start With Why
Purpose-driven brands like Apple continually exceed expectations and achieve tremendous success, while other companies with the same resources and market conditions fail.
Why is it that some companies consistently innovate and see continual success? That’s the question that Simon Sinek set out to answer in his book “Start With Why.”People don’t buy what you do; they buy why you do it. Having a well-defined purpose is one of the essential factors for running a successful business.
Simon Sinek’s idea helped me to understand what distinguishes successful purpose-driven brands from the rest. At the heart of Sinek’s methodology is The Golden Circle. The circle is made up of three parts; the “Why,” the “How,” and the “What.”
The Why
A small number of companies have a clearly defined reason why they do what they do. Making a profit isn’t a reason why – it’s a result rather than a purpose.
Why does your company exist?
The How
Most companies have a USP (unique value proposition). This is how a company attempts to differentiate from their competitors and explains how their product is better.
A winemaker claims to use better grapes, or a law firm claims to have the most experienced lawyers.
The What
Every company knows what they do. They can describe the products and services they offer.
Rather than starting with the what, it’s important to start from the centre of the golden circle and move outwards.
Start with the why.
Sinek uses Apple as an example of a company that has a distinguished why.
Apple is technically the same as all of the other computer companies.
But Apple clearly communicates its purpose.
“With everything we do, we aim to challenge the status quo. We aim to think differently. “
By starting with the why, Apple is much more than a computer company that sells laptops and smartphones.
This methodology helped me to define an organization based on a clear purpose (Why) with a consistent way of doing things (How) and with a clear product or value proposition (what).
Think Big
I learned this method from my current business partner at The Keenfolks, Miguel Machado.
Think big and become a category king.
If you want to make a big impact, this is your method.
The largest brands in the world all share a similar business strategy model. Companies like Google, Facebook, and Amazon are all category kings.
These companies identified a specific problem or opportunity and created an entire industry around a unique solution. They could dominate their industry because they were the first with the business strategy model.
They didn’t become industry leaders by improving upon an existing product or service. They created an entirely new solution to improve people’s lives.
I’m going to give you an example.
Let’s say you are looking at future business ideas, and you decide to start a bread business. You aim to provide the best artisan and ecologic bread ever seen.
You are going to sell amazing handmade bread made from 100% organic ingredients.
There is clear consumer demand, and artisan bread is a hot trend in the bread market.
However, even if you move fast, you will still be in a weak position. The only way to position your product is by building a meaningful brand.
By producing high-quality bread, you can build your business through reviews and testimonials that create positive word of mouth.
You’re selling a great product that improves people’s lives, but you will probably remain a small or medium-sized business until a big multinational start in your market. Your business strategy model is still weak, and you’re in a vulnerable position.
You need to be thinking, how can I become a category king?
Everybody talks about artisan and ecologic bread, but does anyone talk about therapeutic bread?
Does anyone sell bread in the pharmacist?
Now you are breaking the wheel and starting in a new category where your future business ideas can grow faster and stronger.
Becoming a category king isn’t about trying to win the game that everybody else is playing.
It’s about creating your own game, where you set the rules.
Conclusion
Building a successful business doesn’t happen overnight. You need to prioritize execution, revisit and evolve your business model as you progress, and have a clearly defined why – the purpose of your business.
You also need to think big and take bold steps if you are going to future-proof your business and become a category king.
The above methods should help you move your business forward, improve people’s lives, and generate the results that your hard work deserves.
