Early Success Is a Bigger Challenge for Many Entrepreneurs Than Recovering From Failure
Depending on whom you’re listening to, you’ve already seen some shocking statistics behind starting a successful business. Maybe you saw that 50 percent of startups fail after five years. Or only one out of five businesses survive past their first year of operation.
With such appalling numbers, when you find a measure of success early on in your entrepreneurial journey, you may hold off giving yourself the proverbial pat on the back. Nevertheless, be careful, early success can be disastrous to being a successful entrepreneur. How so? Consider three ways to stay on track.
1. Remember your “why.”
For some entrepreneurs I know, their businesses are so intertwined with their joy and personality that you can’t tell where one begins and another ends. Your “why” is the reason you get out of bed in the morning to run your business. Or, it’s just the reason you run your business.
As an entrepreneur, it’s easy to subconsciously change your why once you’re crushing your business goals. For example, after getting the first 10,000 to 50,000 customers in your Saas company, your why may change and you become more focused on increasing your company’s monthly recurring revenue.
Of course, having money as your why isn’t wrong. Because you’ll need money to run your business. But in the words of Zig Ziglar, “You can get everything you want in life, if you help enough other people get what they want.”
For an Saas startup, you will probably increase the subscription fee for the product or service just to increase revenue. However, consider an alternate route. Carry out a customer survey to discover what features customers would like to see in their software apart from already existing ones.
After adding those, you can then create a higher price subscription plan for that version of your product. You’ll make more money eventually, but by using a different and better route.
2. When your "why" isn't money.
But also, consider the example of Tony Hseih, founder of Zappos. Six months after starting Linkexchange, he was offered $1 million for the company. He rejected the offer because he was working for love, and not just money. Five months later, he turned down a $20 million offer from Yahoo’s cofounder. He still didn't sell because his true passion was in building and growing Linkexchange.
After rejecting the second offer, the company grew exponentially. Newer employees no longer had the same passion and motivation Hseih and the first couple of employees had. They were not working to grow Linkexchange because they loved it, but they were there for the money. Hseih decided to sell Linkexchange for $265 million dollars in 1998.
The lesson there is that your why will enable you to make tough decisions in the course of managing your business: Decisions like your brand’s image and products, hiring and managing employees, and your business’s continuity. The list isn’t exhaustive, but when you find early success, you’ll have a lot of difficult decisions to make. Keeping your why in mind will help you make the right choices.
3. Always keep learning.
Sadly, for a large chunk of our existence, we’ve always associated learning with formal education. The truth, as most successful entrepreneurs know, is that learning involves much more than sitting in a classroom.
When your business makes early rapid growth, you’ll especially need to learn how to sustain the growth and your growing customer base. Go ahead and ask any successful entrepreneur who keeps winning at the entrepreneurship game how they do it, and they’ll tell you: never stop learning.
Bill Gates reads about 50 books in a year. Mark Cuban reads more than three hours everyday. Elon Musk was once asked how he learned to build rockets, and he said, “I read books.” If you stop learning you’ll become obsolete in a few years. In fact, for some industries, it’s a few months.
For example, let’s say you’ve recently read an article on a 30-day plan for email marketing. If your learning stops with that article, you’ll be clueless after the 30th day. Reading further is compulsory to know what to do after day 30 and beyond, especially in an ever-changing industry like digital marketing.
Read books. Take courses. Network with other successful entrepreneurs. Get a mentor. Study what your competitors are doing. Don’t just copy them, but also try to understand why what they’re doing works for them.
Today, the internet alone is an invaluable information resource. What knowledge does the world have that you need? Although your business is doing relatively well, in the grand scheme of things, you know very little. That “ignorance” should humble and motivate you to learn more.
4. Be aware of your competition.
When your product or service is the first of its kind in the market, early success may be encouraging but it can lead to complacency. That’s not to say that being a first mover is bad, no. But the truth is, when competitors arrive, an ability to evolve and understand the market you’re in better than they do will give you an edge.
For example, in 1921, Ford had a 60 percent market share in the American car market, compared to General Motors which had just a 6 percent share. By 1931, General Motors had a 31 percent share to Ford’s 28 percent share, and GM never looked back -- for well over seven decades.
But just to show you what’s possible and that the market is never stable, Toyota sold more cars and trucks in the first quarter of 2007 than any other manufacturer, and ended General Motor's dominance of over 76 years. This is even more remarkable because Toyota sold its first car manufactured for the US in 1964. Analysts opined that Toyota was making great strides in areas General Motors had fallen behind, and it finally became evident in Q1 2007.
It wasn’t a passing sales spike. In 2008, Toyota officially became the top-selling car maker in the world, dethroning General Motors. The latter only reclaimed the title in 2011 in a fluke, when an earthquake reduced car production at Toyota’s factories.
That story shows how your product or service must always evolve positively to be truly successful in the ever-changing markets of today. Don’t stop understanding your customers’ problems and the features your product or service need to have to solve these problems. That way, you’ll enjoy lasting success in your business.