We’ve all heard how risky building a startup can be. So it might be a little confusing to hear that startups have a better chance of success when innovating than regular companies. However, it proves itself to be true, and today I want to break down how startups have the upper hand when it comes to achieving success through innovation.
The startup way
To recognize the advantages—and make the most out of them—we need to understand the process. There are a lot of startup definitions out there, here is mine:
“A startup is a young business capable of rapid growth due to a scalable business model.”
That’s exactly what I look for when evaluating prospective clients. A startup isn’t a regular, old brick-and-mortar business. Startups require business vision and a great idea to succeed, but the true potential of the company relies in its scalability, profitability, and agility to deal and encourage rapid growth.
This sets everything up for a particular way of doing things. Agile Methodology is a big part of it, but it goes deeper than that. It’s a whole new philosophy behind startup founders that completely changes their way of approaching new business opportunities.
Knowing your client
The thing with innovation is that the main idea behind the project will and should always change and evolve as the project moves forward, and market research uncovers more and more that could aid its success. If this idea is brand new, it comes with great risk to whoever is developing it because market research can only estimate the impact of this new idea instead of actually measuring it.
A traditional company would just plan for the idea, do it and then see if it works—all in a very linear fashion. This approach just doesn’t suit innovative ideas very well. By doing this, you are assuming that you know everything there is to know about your market, your customers, what they need, and what they would pay for. You are also assuming that everything you “magically” already know won’t change from the moment you plan out the idea, to the point it’ll be finished and ready to use.
The whole attitude behind building a startup is—and should be—that you know nothing about your idea. You don’t know if it’s going to work, if it’s necessary, if people will hate it, like it, love it, or pay for it. The only way to figure out the business model around this new idea is for you to build it one brick at a time. Get your very first client, make sure their needs are met, do everything manually, and make them pay cash to see if it’s worth it to others. Then you would move on to a software solution. If you were able to help them get from A to B and they’re happy and satisfied with your service, you can then move on from 10 to a 100 clients, and then from a 100 to a 1,000. Your product, service or solution should constantly be revisited and readjusted according to the feedback you get from those 10, 100 or 1,000 first clients.
Trimming the startup sails
If you’re not into boats, you may not know what that means. It’s when you adjust the sails on a boat to keep it in balance and sailing as efficiently as possible. A startup usually starts with 1 to 4 founders, and just like a small boat, you need very little to readjust your path. With a small team like that, you are free to go in whichever direction you prefer, you are free to take the time and actively listen to those first 10 clients and give them exactly what they want.
Unlike traditional companies, startups don’t have any strict managers or structure to answer to. Startups need room to play, to move around and choose the opportunities they want to focus on. Think of it like this: every time a founder meets a new person, they have the chance and the choice to get inspired by them and tweak their project just a tiny bit, to better suit this person’s needs or adapt to what they’re looking for.
However, be careful and aware for what and for whom you’re making these course corrections. There are a lot of companies in need of cash, deviating from their goals without readjusting them. For example, let’s say you are building a startup around the food industry, and someone wants to hire you to build a product for the sports industry. If moving onto the health and fitness industry is in your vision and something you planned for, go for it; if it’s not, move on.
All the founder needs to do is check if this opportunity will move them towards their vision; and if it won’t, it’s also their responsibility to let it pass. Making sure each project is a stepping stone towards what you’ve wanted all along helps your marketing, your business model, your brand, and how your clients view you. So make the most out of being a startup and trim for smooth sailing towards that dream company in the horizon.
The “right” way of being wrong
The point is startups can readjust almost everything, and if it’s relevant at some point, you can also change your strategy and your vision. For corporations, this is not an option. The amount of money and effort it takes to change direction in an operation of that size is titanic, pun intended. This causes the space for innovation to be very narrow and fixed to the idea that everything should be exactly right from the get-go.
If you want to launch a startup, you need to think of yourself as being wrong most of the time. Never assume you’re right, especially in the early stages, at least until your customer happily pays and tells you otherwise. Just assume your idea is wrong, your strategy is wrong and you need to readjust, keep tweaking and trimming sails all the time. Startups that have low ego, that always challenge themselves, that recognize and analyze their mistakes, and constantly evaluate what they would do differently—those startups are the ones that succeed.