How do you build a business that doesn’t just exist, doesn’t just sell products or provide services, BUT a business that changes the world? How are valuable start-ups created that mature into companies that change us?
I don’t mean change the world in a way like Patagonia or David Suzuki strive to from a social and environmental perspective – although that is also a valuable path for your start-up, and one that everyone should consider – I mean change the world, change the way we behave, change our daily experience, change the fundamental way we do something. Just like Apple changed the way we listen to and experience music with the introduction of the iPod, or how Airbnb has changed the way we travel and what we expect from our travel experience.
#1 reason startups fail: They have created a product that there is no need for.
They haven’t actually built something that solves a real problem for customers.
How do you develop an idea into a business that becomes a disruptor, a leader, and a changemaker?
Start With The Fundamentals
The reality is, you to start with the fundamentals. There are no short cuts, no magic tricks. In this leadership in business article, Joanna Buczkowska-McCumber, Impact leader, Start-up Strategist, Entrepreneur Advocate and Managing Director of The Next Big Thing, shares her insights on how to build a business and change the world.
What I Know About Entrepreneurs
Over the past ten years, I have had the privilege of working with many entrepreneurs and social entrepreneurs – young and old – some successful and some not so successful. I could spend days talking in detail about the specific characteristics of entrepreneurs that somehow are capable speeding ahead of the masses, such as hustle, grit, dogged determination. Characteristics that define individuals who, yes, have a higher likelihood of success, and we could talk formulas or step-by-step guides for ‘how to build a startup’.
All those guides and formulas have value and they have their place, but they should never be accepted as the ‘be all end all’ solution for your start up. Too often, entrepreneurs fall victim to following formulas too closely without stepping back and understanding the fundamental factors of their own business.
For those of us working with entrepreneurs, we have been observing for a while the strategic role of fundamental factors to creating a business that we as entrepreneurs or as a business can in fact control. We know that external factors such as luck, timing, politics, environment and the competitive landscape are critical to success for a business. Uber wouldn’t have worked if the internet wasn’t there to support its growth. What would have happened to Facebook if all students didn’t have access to computers yet? When we look at innovative products and businesses that launched ahead of the technology curve, they have fallen flat.
These are the many pieces that work in favour or against you, but at the end of the day, you cannot control them. These external factors, you can only adapt to, push against or crumble underneath them. But what are the foundational factors to building a business that you as an entrepreneur can control?
They are actually quite simple and often forgotten but essential to incorporate to build a sustainable business.
Understand the Problem
The number reason startups fail is because they have created a product that there is no need for. They have not built something that solves a real problem for the consumer. As an entrepreneur, you need to understand the problem. Do your research. Be the expert. Dissect the problem inside and out. What are you actually trying to solve through your business? You have to understand the fundamentals to be able to construct a solution that will be valuable.
All too often we see products that are simply not needed or just band-aids to a problem.
The most successful entrepreneurs live and breath the problem they are trying to tackle.
The Customer is Queen
Now you understand your problem, and how it intimately affects your customer. You should remember that no matter what happens in your business, small or large, the customer is queen. It is, after all, their problem that you are solving.
They are the boys and girls, men and women who are paying hard-earned cash to buy your product, to buy your services. THEY ARE VERY IMPORTANT.
Who are your customers? What are their personas? What do they like and need? Who are they as people? These are the questions you have to get familiar with and perceive your interactions with your customers as an ongoing relationship that you want to foster.
“We must learn what customers really want, not what they say they want or what we think they should want.”
–Eric Ries, author of The Lean Startup
Build a Business Not A Product
Build a business, not a product – NOT JUST A PRODUCT. Of course, you need to develop that product – and it needs to work – and the customer needs to want it. BUT the product is NOT the business. The business is so much more. The business is a set of values. The business is an idea that is much bigger than the product itself. The business is a brand and a vision.
We are talking about creating a business that creates monumental shifts in behavior not ripples in the pond.
The business is giving constant consideration to what you want to become as a business. Think hard when you start about what kind of business it is that you want to create, and the impact you want it to have. Why are you really starting this business? To make a quick buck or to create something valuable that fills a real need.
Be real. Be authentic. Be honest.
What does that mean? You have to be honest inside and out – honest with what you are achieving, how you are achieving it, how quickly or slowly, what it’s truly costing, your real HR situation, your strengths and your weaknesses. Be real, and do not ever compromise on this aspect of transparency. Something that often gets brushed over because we want to look great, comparing ourselves to the entrepreneurial myth. If we only looked better – sounded like that thought leader we intend to become, perhaps customers would come, perhaps investors would come too.
But the reality of it all is it doesn’t matter what business you are in, whether its retail, e-commerce or b2b, if you are not honest and you lie, it will catch up to you. People can see through the bs, investors can see through the ‘projections’, and customers know when they are being duped. Just look at the monumental failures of companies like Theranos.
The consumer demands authenticity – in a world over-run with social media, native advertising and the emergence of fake news, the consumer has become a savvy beast, one that can not be tricked. To build a business that truly stands out, and has a lasting relationship with its consumers, be honest.
Be real with yourself, your startup, your team, your investors, your customer.
The business world is changing as you read this, and your best bet for success in a world that is accelerating the pace of startups and the marketplace, is to know your problem, know what you are building, who you are building it for, and what your business is going to create in the world that matters.
She was a founding member of the Centre for Social Innovation & Impact Investing, the co-creator of the award-winning Coast Capital Savings Innovation Hub, and
the Managing Director of the youth accelerator The Next Big Thing. She has curated the annual Propelling Social Ventures conference, led a multimedia design startup, and works closely with early stage entrepreneurs to amplify the impact of their ventures.
Today, Joanna is gearing up to take on the role of Executive Director of the national charity, League of Innovators, while acting as an advisor and mentor to many entrepreneurs in the community building businesses.