How to Maximize the Potential of Your Next Great Entrepreneurial Pivot Founders who have previously failed have a higher chance of success than first-time entrepreneurs, so don't be afraid to go all-in on a new venture.
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Anyone who has braved the wilds of entrepreneurship understands that it takes courage and grit to make it, and this is especially true of ventures in a new field. Interestingly, according to a 2019 survey, 62% of Americans think entrepreneurship is a good idea and 49% think they could do it, yet only 10% have successfully run a small business for more than three years!
Launching a new venture outside of your comfort zone or previous career path can be daunting, but I would like to share a few of the lessons I've learned along the way.
1. Don't put your previous experience and mistakes on the shelf
Switching to a new industry doesn't immediately make all of your previous experience irrelevant. It's important to remember that the foundation of who you are as a person was built in part by those previous successes and mistakes.
Wayne Huizenga is an interesting example of this. He was an American entrepreneur who founded three huge companies, including Waste Management, Inc. and Blockbuster Video. From 1968 until his passing in 2018, Huizenga used his entrepreneurial spirit and experience from widely varied industries to successfully found three Fortune 500 companies in unrelated industries, own three major sports franchises and start six successful brands that are all listed on the New York Stock Exchange.
In my observations, it's better to let all of your experience remain at the forefront of your mind. Yes, you will need to learn plenty of new things, but you never know when you'll be able to cross-reference similar situations from your previous career.
For instance, my partner and I previously developed a cloud B2B business that averaged $500,000 in revenue every year, and before that, we worked for various large tech companies as programmers and product managers. It would have been easy to assume our experience in cloud computing and programming would be useless for developing a teaching tool for children.
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However, a big part of our success came from understanding how to create enticing programs and market products. We had to learn plenty about the mechanics of language and teaching children, but if we had shelved all of our prior experience, there's no way Novakid would be generating the millions in annual revenue that it does today. For example, when at some point that cloud business of ours stopped generating revenue due to lack of growth potential, it made me realize that for my next business, I needed to plan in advance the ways of scaling up — both in terms of team building and technical-infrastructure development. And after my unsuccessful experience, I've finally found a new business opportunity in the educational industry.
2. Be financially and emotionally driven
Research shows that 79% of leaders believe that purpose is essential to success, and it's hard to argue with that. Market trends and financial analytics are of crucial importance both before starting the business and when scaling it up, but only inspiration and understanding of your mission can help overcome disappointments and challenges that are an integral (and, sadly, huge) part of the entrepreneurial way.
What made you decide to step outside of your comfort zone? Maybe you have an old dream you want to reach for or a new problem you think you can solve. Perhaps it's meeting a need for a loved one that inspires you to branch out.
For me, inspiration came in the form of my firstborn son. I wanted to raise him in a bilingual home, but I remembered the incredibly difficult time I had as a child trying to learn English. I thought of my sleepless nights struggling to memorize English words and how much time I spent in rote memorization.
As a child, I desperately wished for a "magical device" that could make me learn without all of the suffering I was experiencing. Now, my son and children around the world have the thing that I wished for.
It cost about $350,000 to develop our first iteration of Novakid, and we were not immediately successful. However, that drive to solve the problem of making language learning fun kept us from giving up. In 2021 alone, we've raised over $35 million from investors, and our valuations are excellent.
3. Ask all of your questions, even the "stupid" ones
Unabashed curiosity is a child's greatest strength, but as we grow, we learn to tamp down our curiosity out of shame or fear of looking silly. However, studies show that curiosity is crucial for innovation. It helps you clarify your company's goals and optimize your overall brand strategy.
Remember that you're building your business to serve a target audience. They're not experts either, and they depend on you to help them solve a problem or meet a need without confusing jargon.
In our case, I knew plenty about the tech side of our product, but teaching language was new to me. Our approach was quite a departure from the learning methods I knew of, so I had to ask a lot of "layperson" questions that might have sounded stupid or obvious to an expert.
If I had been too afraid to ask questions about the total addressable market or the expected retention period, or about mechanisms of edtech market in general, I wouldn't have been able to confidently continue to develop our product, nor would I have had the knowledge to help skeptical parents understand why using Novakid was better for their children than the more difficult methods they were familiar with.
4. Don't wait for the perfect moment
Should you jump headlong into a brand-new industry? Of course not. But you also shouldn't wait forever to take those first steps. It's easy to fall into the trap of waiting for the "right" moment, but there will always be a reason to keep waiting.
You're capable of learning as you go, and those mistakes that you will inevitably make along the way will be excellent lessons to keep you on the right path in the future.
For example, we developed the first prototype of Novakid in just three months, which is a pretty tight turnaround on an MVP. Experts say that it's common to take up to four months to create a good MVP.
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Initially, we only had a video-chat feature and an interactive map for kids and teachers. However, through mistakes and setbacks, we've evolved to include thousands of native-speaking teachers, VR and AR technology, gamification and machine learning to help more than 380,000 students globally.
In our early days, the more rudimentary prototype was sufficient to get us started and help us learn what worked and what didn't. It also proved product-market fit and set us on a growth trajectory that allowed us to scale through the Covid-19 lockdowns. If we had waited until we had a "perfect" solution, Novakid still would be just a pipe dream.
5. Learn from the experts
Professional literature and industry reports can be useful information, but the best lessons come from industry veterans. I encourage all entrepreneurs to find mentors and advisors who are successful in their chosen industry. Finding the right mentor will depend on your industry, but entrepreneurs can connect with potential mentors via online communities like Reddit and LinkedIn or through services like SCORE. Making meaningful connections with industry experts (even if you don't hire them onto your team) gives you an invaluable well of insider knowledge to tap into. Industry veterans often have lessons and experience that you won't find in books or reports, so they can help you avoid pitfalls and navigate unfamiliar territory with fewer missteps.
6. Hire a team with varied backgrounds
It's a common mistake to hire a homogeneous team with similar skills, backgrounds and industry expertise. It can be helpful to have some team members who understand the industry, but it's best to have a team with varying perspectives and expertise.
Research shows that diverse teams are 70% more likely to capture new markets and have up to 19% higher overall revenues. A McKinsey study also showed that more diverse teams have as much as a 35% performance advantage over less-varied teams.
It's true that 90% of startups fail, and 25% of entrepreneurs fail at least once before they succeed. However, founders who have previously failed have a higher chance of success than first-time entrepreneurs, so failure is a great teacher.
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Failure is a near-certainty in the realm of entrepreneurship, especially if you're beginning a new career path. However, remember that some of the most famous entrepreneurs of our time succeeded by persevering until they conquered the market and brought their dreams to life.