January 13. 2022

 

Planning.

We hear a lot about how entrepreneurs need to take action, and yes this is totally true.

It is true that one key differentiator between those entrepreneurs that are successful in achieving their goals and those that are not is the successful ones who take action (https://eiexchange.com/content/117-successful-entrepreneurs-take-action) even without all the information.

What we do not hear about enough is the fact that they plan what they are doing to do, but probably not in the way that we think.

They do not try and plan out five years, three years, or even a year out. It is way too difficult to do.

What they do is plan out what they will focus on and when. They plan out their day and make sure they are in control of it as much as they can be.

They create the time to take action by planning out when they will make time for it. So if you want to be successful, do not just run 100 miles an hour zig-zagging across the globe trying to catch up. Steady the boat and take sail.

What I am reading: “Why Start-ups Fail” by Tom Eisenmann

More than 66% of startups never return a positive return to investors

VCs tend to blame the founder or leader, which in part is true but it also oversimplifies the problem.

Founders on the other hand blame things that are out of their control.

He has found that there are six main reasons startups fail, and is outlining two of them in the article.

His main focus was looking at startups that had promise and were not toppled by outside forces (COVID-19) but still failed

Good Idea, Bad Bedfellows: You have a good idea but the founders, funders, employees, and surrounding team cause the failure due to lack of experience, growth pressure, and more.

Founders with a lack of industry experience in an industry with many steps and hurdles.

Learning by doing can create expensive mistakes. Not enough funding but not in the traditional thought process. The startup does not have enough initial investment to make it through the needed runway.

False Starts: Not doing customer research prior to your business launch.

Creating an MVP that works but does not meet a need.

Too eager to get the product out the doors and not enough time identifying the problem.

The idea of failing fast seems great but not if you are failing at a critical component of your startup's success.

Wrong opportunity, right resources

It is key to not just interview early adopters but the general market as well to see what they would want and do, but with the goal of understanding the problem.

Need to conduct market research to see where there are opportunities and problems they can address.

The other four reasons are:

1. False Positives: Listening to early adopters but not having support from the public.

2. Speed Traps: High growth in a specific market, which signals success and attracts investors but the cost to acquire new customers in a different segment is higher than the value of the customer.

3. Help Wanted: Not having any money or senior leadership

4. Cascading Miracles: Having a startup that has too many do-or-die factors in it. This mostly comes to startups that are trying to change the world.