How to Stop Waiting for Lightning to Strike and Instead Start Replicating Success
When it comes to success, every businessperson wants lightning to strike twice. Amazon, after its summer merger with supermarket chain Whole Foods, may actually realize that goal: Over four months' time, the company's website has sold $10 million worth of Whole Foods products and exhibited 9 percent growth.
This victory is born of several key moves without which Amazon wouldn't be nearly as successful today, because of the extremely competitive space it operates in: ecommerce. Entrepreneurs who pay attention to the following moves and structure their own growth using similar practices, can learn to replicate Amazon's successes and ultimately avoid the "win-by-chance" vortex.
So, if your're game, here's what you need to know:
How Amazon continues to zap the competition.
One business strategy Amazon consistently employs is keeping its prices aggressively low. Even after it acquired (formerly pricey) Whole Foods, this strategy didn't change: The company slashed grocery prices. Moreover, by pricing popular items low, Amazon across the board recoups margins from long-tail inventory.
For instance, customers can buy other Amazon products at Whole Foods stores that feature better margins than groceries -- one of the lowest-margin industries out there.
Amazon's aggressive pricing tactic also aims to annex market share while focusing on costs instead of profits. This foregrounds its philosophy of strengthening one's position in lieu of nabbing short-term rewards that rarely rendered the company profits in its first 20 years of operation. Amazon has obviously benefited from a consistent business strategy, and though the company has been criticized for having multiple loss-leader initiatives, this approach ultimately appears to be working.
But what entrepreneurs need to realize about Amazon is that it didn't simply replicate the same strategy from one business to the next. Instead, it replicated the thought process that led to its initial success.
Three ways to keep calling down that lightning
Entrepreneurs can replicate other companies' successful thought processes by collecting user feedback, doing market research and tests and responding quickly to market or funding changes. Falling in love with an idea is never a good move, because if you hold on too long to your notion of how the business should operate without listening to the market, or adopt the "We did it before, so we should do it again" attitude, you'll fail. Successful businesses always incorporate feedback and embrace change -- not just from customers, but from the entire team.
Here are a few simple strategies that all entrepreneurs can follow to help their companies grow differently and remain successful.
1. Prepare for change -- it's inevitable. Many successful businesses are unrecognizable now compared with their earlier days. According to a former employee, Twitter began life as "a product where you call a phone number and it would turn your message into an MP3 hosted on the internet." Ultimately, Twitter evolved and subsequently changed the world.
Having the flexibility to adapt to what the market introduces means entrepreneurs must adopt the right mindset. Even after it acquired Instagram, for instance, Facebook continued to lose its active-user lead to Snapshat until it introduced Instagram Stories last August. By October, it had 100 million daily users and growing, while Snapchat's growth drastically slowed.
I myself rely on the Build-Measure-Learn methodology in the Eric Ries book The Lean Startup and follow the "Release Early, Release Often" mantra for software development. These ways of thinking, I believe, keep you current and nimble. Such feedback loops are critical, so long as they're methodical and inclusive; and capitalizing on a wanting market, even when you've got an imperfect product, is much better than waiting and missing your moment.
In addition, putting some innovation-accounting to work for you by identifying your key performance indicators and core metrics -- such as customer retention, unit economics and customer lifetime value -- determines whether your business will make it.
2. Recognize that mistakes are your best teachers. Contrary to what you may expect, you should study and replicate what you did when your previous business was on the verge of failing -- or even after it failed -- and not as much on what it was doing when it was successful. The real lessons you need to replicate are the ones you learned during those tough periods.
One of those lessons, simple as it may sound, is that grit is necessary to create success in any domain. To be a serial entrepreneur, you need a bit of grit because a brand can't fail -- only a founder can fail to pivot when necessary. And pivoting takes grit.
Still, you shouldn't rely too heavily on this singular trait. Often, entrepreneurs are “grittiest” about their passions. I'm no different, having chosen a field I'm passionate about but also having made sure a market existed for the product. In planning your next success, then, make sure your venture aligns with your core values and passions while keeping sight of the practicalities necessary for success.
3. Adopt multiple focal distances, but don't go it alone. Looking at both your idea and the market is essential. Jake Winebaum of Brighter and Ev Williams of Medium nailed this approach: Winebaum recognized a problem when his relative needed dental care. After assessing the landscape, he saw a $40 billion dental market with no way to discover pricing; he then put those two together as a key to his success. Williams is a serial entrepreneur who founded Blogger, co-founded Twitter and is working on his publishing platform, Medium.
To "re-succeed," you have to adopt both the microscopic view and the 1,000-mile view the way those individuals did. But if you're unsure how to accommodate these seemingly divergent perspectives, don't hesitate to lean on an advisory board and network of mentors. Bringing some people over from your previous ventures but also including new ones who know the market for your new venture can be beneficial at every step of the entrepreneur's journey. Moreover, when you look at small businesses that survive five years, 70 percent of the owners had mentors, according to a 2014 survey by The UPS Store.
If you've enjoyed entrepreneurial success already, congratulations. But your success doesn't have to stop there. Utilize the hard-won lessons of previous crises and hash it all over with not only your team, but also your most trusted advisors. The market may be fickle, but it's not unfair. With tenacity and enthusiasm, you can capture that lightning strike from time to time in an entrepreneurial career. And that makes it all worth it.