What it takes to be a successful entrepreneur

As you may know, in addition to my brand management and marketing consulting practice, I have also been a coach to dozens of startups over the past five years. In working with business founders, I have determined that these are the most important contributors to success:

• A great idea that adds value to a specific set of customers
• A passion for transforming that idea into a successful business
• Ample "customer discovery" to validate the viability of your idea
• A belief that you can accomplish anything
• A high tolerance for calculated risk - that does not mean that you are motivated by risk or seek it out, only that you are willing to work with risk in smart ways
• The ability to repeatedly overcome adversity - resilience and perseverance (the ability to repeatedly "pivot")
• Learning from failure
• Adaptability
• A strong work ethic
• Decisiveness and a penchant for action
• Ability to thrive in an unstructured environment - there are no directions, there are no hard and fast rules
• Some level of smarts - you do not need to be a genius
• Emotional intelligence
• Salesmanship - the ability to tell a compelling story about your new product or service
• A willingness to network with others - you will fail if you try to go it alone
• No fear of asking for help
• Along with this, an ability to seek out and gather the needed resources to succeed
• Knowing when to switch from an emphasis on product/service development to an emphasis on business development, sales and marketing - this does not mean halting work on product/service development
• Establishing a continuous loop of customer feedback and product/service enhancements
• It is an added benefit if you have some financial management skills, the most important of which is cash flow management
• It is also an added benefit, but not necessary for success (you can hire this expertise), to be a savvy marketer, understanding the target customer so well that you can think through the best messages and marketing strategies for them
• Most successful entrepreneurs also have an ability to delay gratification - many are willing to work tirelessly with little or no pay for a period of time with the vision of one day cashing out for millions of dollars (or at least managing a very successful business well into the future)

The most important of all of these skills is a "can do" entrepreneurial mindset. As an investor in startups, I always focus on the entrepreneur and his or her mindset/skills over the idea. I would rather back an outstanding entrepreneur with a mediocre idea than a person with questionable entrepreneurial tendencies and an outstanding idea.

Having said all of this, these are some of the common problems that entrepreneurs encounter:

• Not offering the right “value proposition,” that is, something people really want
• Not doing enough “customer discovery,” that is, understanding customer needs and desires
• Founder is too focused on product development vs. business development, especially when it is time to switch primary focus from the former to the latter
• Lots of uncertainty and risk and need to change course or “pivot”
• Access to funding/$
• Hiring the right employees and not being afraid of firing those who don’t work out
• “Scaling”/growing the business - investment in inventories (and marketing efforts) before sales occur is a particularly common problem in cash flow management
• Knowing when you need to hire a professional CEO who can take the company to the next level – knowing when the leadership role has exceeded your talents and abilities.

The good news is that entrepreneurship adds value to the world in these ways. It is often enough motivation for an entrepreneur to "push through" when the times get rough.

• Introduces new products and services
• Creates jobs and economic growth
• Empowers entrepreneurs to pursue their passions
• Creates wealth for the entrepreneur and his or her investors and employees
• Can address social issues
• Can advance technology, which can be used in other ways

If you have thought about becoming an entrepreneur, I hope this blog post has helped you think though what it takes to be a successful entrepreneur.
 

New Brands Require Research

We are occasionally approached by entrepreneurs or smaller businesses to help them figure out their brand, product or business model strategies. We are working with one such brand now. In these situations, often the entrepreneur creates a company, product or brand around personal intuition and insight. But maybe that entrepreneur or company is stumped about how to grow the brand. They are not sure in what direction they need to move next to take the brand to the next level. 

Usually, this is because they do not understand what it is about the product or brand that most appeals to the customer. They are not sure of its primary benefit, its purchase triggers or what sort of person is buying it and for what reason. Sometimes, the product or brand is so innovative that it is difficult for them to even articulate what category it is in. This lack of understanding makes it difficult to decide how to tweak the product or brand to take it to the next level. It also makes it difficult to understand in what ways the brand can be most successfully extended to generate additional sales. Sometimes, they need to drive down costs to make the product viable in the long run but they don't know which features they can eliminate without harming sales. At other times, they may not know how to convert impulse sales into repeat purchases. Some worry that their products or brand are primarily selling as a novelty and they are not quite sure about how to guarantee a lasting revenue stream. Sometimes the brand and the product work very well together. At other times, they are sending conflicting messages.

All of these problems can be solved through customer research that leads to customer insight. One must begin with deep qualitative research to uncover purchase motivations, brand perceptions and an understanding of what needs the brand fulfills in people's lives. This should also uncover how the brand makes people feel, when they feel compelled to purchase the brand and what are some of the brand's purchase triggers. The quality of qualitative research moderators varies hugely. Some merely sit at the end of a focus group table and ask questions, while others have a very large box of tools to stimulate deep insight. The latter are often more expensive, but they are almost always worth the extra investment. A lot of valuable insights can be garnered through well thought through deep qualitative research. This can then lead to quantitative research design. The quantitative research might be an attitude and usage study, a customer benefit segmentation study, a brand equity study (if their is high enough brand awareness) or a study that leads to customer targeting and volumetric forecasting. 

Here are the questions that need to be asked:

• Who is buying our products or brand?
• Why are they buying our products or brand?
• What triggers them to buy our products or brand?
• What can we do to get them to repeat their purchase of our products or brand?
• Are our products and brand congruent with one another or are they working against each other?
• What are the most viable paths for extending our brand to generate incremental sales?
• What is the essence of our brand?
• What deep needs does the brand fulfill?
• What does it promise to its customers and potential customers?
• Who are our brand's most viable customers?
• What are our brand's most promising customer need segments?

Taking your brand to the next level might require deeper customer insight. Research to uncover that insight can have a huge payoff if designed and conducted properly.