You can be on Entrepreneur’s cover!

7 Startup Strategies to Gain From Your Limitations Focusing your budget on your most expensive projects and finding partners who complement your strengths are just a couple of smart business strategies.

By Martin Zwilling

entrepreneur daily

Opinions expressed by Entrepreneur contributors are their own.

Shutterstock

As Clint Eastwood once said, "A man's got to know his limitations." Every new entrepreneur soon realizes he or she has some big ones, but very few figure out how to use these them to their advantage. I believe that the resourcefulness to turn constraints into competitive differentiators and new opportunities is a trait that separates the great entrepreneurs from the "wannabes."

Related: The 7 Traits of Successful Entrepreneurs

For example, the Facebook business model of offering a product free to customers while gaining revenue from advertising was born out of the need to survive as a business while offering a fun service. By contrast, as a startup investor, I still see too many entrepreneurs looking for another check to keep them going -- without any convincing plan to ever be self-sustaining.

Smart entrepreneurs understand that more funding often comes with onerous constraints on who is in control, what can be done by whom, and who gets to share in the returns. These founders follow alternative strategies, including the following, to push themselves and their team harder for innovative and less expensive approaches to a complete product, advertising and new markets.

1. Do it yourself with new tools rather than hire outside help.

They look for creative solutions to problems that are inhibiting progress, rather than the conventional solution of outsourcing or hiring people. For example, many founders now use makerspaces such as TechShop to build prototypes without the costs and long lead times of manufacturers.

2. Focus on a top productivity bottleneck each week.

Startups funded by large venture-capital investments rarely think about productivity. I can think of cases where executives actually created make-work activities to keep idle people on the payroll in case they might be needed later. It's better to use creativity and tools to find better ways of doing things.

Related: 8 Signs You're on the Golden Path to Success

3. Use big constraints to drive innovation.

Doing things the way they have always been done only works with unlimited resources. Constraints are great motivators to finding a better way, or maybe even deciding that something doesn't really need to be done at all. Sometimes the quality of a result is inversely proportional to the amount of money spent.

4. Strategically reduce the budget on your most expensive projects.

It always amazes me how work expands to exceed any deadline or budget, and, conversely, how the important work still gets done when budgets and staffing are cut. Apply the 80 to 20 rule for maximum value, and urge people to work more efficiently rather than longer hours.

5. Find partners to complement your strengths.

If you have a great product and need customers, find a partner with many customers who needs a new product. If your strength is building businesses, find a partner who is a technologist. These are win-win situations requiring less resources and time for each side.

6. Look for disruptive solutions rather than linear innovations.

Without constraints on pricing and size, computers would still look like mainframes rather than fit in your wristwatch. The most successful and innovative solutions come from understanding and honoring constraints -- rather than feeling like the victim of limitations.

7. Create new business models and new ways to measure value.

Focus in recent years on social issues and saving the environment has created whole new industries, including solar power and the electric automobile. On the business side, we now have the subscription model, the freemium model and others. There is still room for many more.

Entrepreneurs need to celebrate the fact that constraints and limitations are sources of opportunity in the marketplace, and sources of profit and competitive advantage inside the business. Get past the victim mentality -- where every limitation is seen as an inhibitor to the realization of the vision.

The challenge of being an entrepreneur is in being able to turn constraints into advantages for fun and profit, and enjoy the journey as well as the destination. Are you having fun yet in your new venture, despite the limitations?

Related: Why Vulnerability, Authenticity and Love Are 3 Must-Haves for Entrepreneurs

Martin Zwilling

Veteran startup mentor, executive, blogger, author, tech professional, and Angel investor.

Martin Zwilling is the founder and CEO of Startup Professionals, a company that provides products and services to startup founders and small business owners. The author of Do You Have What It Takes to Be an Entrepreneur? and Attracting an Angel, he writes a daily blog for entrepreneurs and dispenses advice on the subject of startups.

Want to be an Entrepreneur Leadership Network contributor? Apply now to join.

Editor's Pick

Business News

From Tom Brady to Kevin O'Leary – See Who Lost Big in the Wake of the FTX Crypto Collapse

The crash exposed an $8 billion hole in FTX's accounts, leaving investors and customers scrambling to recoup their funds.

Business News

Mark Zuckerberg Says This CEO Is the 'Taylor Swift' of Tech

Meta's CEO posed with Nvidia CEO Jensen Huang on Instagram Wednesday.

Business News

This Highly-Debated Piece of Cinematic History Just Sold For Over $700,000 at Auction

The wood panel from "Titanic" is often mistaken as a door. Either way, he couldn't have fit. (Sorry.)

Money & Finance

5 Simple Wealth-Building Tips For This Generation's Forward-Thinkers

Explore practical finance tips for young professionals striving to overcome economic challenges.

Leadership

What We Have to Gain By Talking About Grief and Loss At Work

I lost my husband to cancer during Covid — here's how it changed how I lead at work.