8 Rules for Succeeding as an Entrepreneur
Success is a function of our belief that we will succeed and our determination not to fail.
Opinions expressed by Entrepreneur contributors are their own.
Before I talk about how to succeed, I need to talk a bit about failure. In Silicon Valley, failure is lauded, especially fast failure. The theory is that you learn by your mistakes. Ironically, most of the people who have the created the most successful businesses had no real history in their market and even less so-called experience. Indeed, their very ignorance of the potential pitfalls seems to have been what enabled them to succeed. Walking a high wire, it seems, is much easier when you don't think there's a 100-foot drop on either side. Put another way, success is a function of our belief that we will succeed and our determination not to fail.
So what are my tips for entrepreneurs?
1. People are more important than strategy.
If you focus on finding people you want to be with and who you think are talented, chances are you'll come up with great ideas together that will work. If you start with an idea and then try and find the talent, chances are you will be putting a square peg in a round hole. If you are familiar with Jim Collins's books, it is what he describes as the "who" rather than the "what."
Related: Investopedia CEO Says These Are the 3 Things Entrepreneurs Need to Know
2. Know what customers really want.
Business school teaches the importance of listening to customers. That's great if you know what to listen for. Sometimes customers don't know what they need but can describe what they really want or what they hate. For example, people don't want to buy gasoline, but they do want to be able to drive to the beach. Henry Ford has often been quoted as saying, "If I'd asked my customers what they wanted they'd have said faster horses." Whether he said it or not, the point is a good one. What business you are in is driven by your ability to know what people really want, not what they say they want.
3. Market size is everything.
When VCs look at any investment, they will try to forecast the potential market. If the market is big enough, even a half decent company could get to be a decent size. Dominating a really small market may take ten times the effort. Work out how big your opportunity is and what piece of that market you think you could own.
We have a highly specialized business called Publitek that helps highly specialized semiconductor and component companies with their marketing. They describe themselves jokingly as "beards for beards." You may think that it's a pretty niche market, which it is. Except that niche market is worth over a $1 billion.
Related: Entrepreneurship Is Crossing the Fine Line Between Crazy and Genius
4. Be the customer.
How many times have you seen employees acting against the interest of their company, because the rules of the company made them act that way? Billions of dollars are lost every year because employees do what they've been told to do, not what they think they should do. If you are constantly putting yourself in the shoes of the customer and listening to your staff, you will eliminate the craziness.
I worked in a British bank as an intern. I witnessed all manner of craziness because nobody was allowed to question the systems even though everyone knew that they were insane and were wasting millions of pounds of the bank's money.
5. Don't chase bad revenue.
When starting out, you want customers, but be wary of taking just anyone's money. Some customers can be bad for business, especially in the services sector. If you take on customers that pay well but make your employees' life hell, they'll rightly quit and then you won't have a business.
One of Next 15's firms, Outcast, lives by this adage. Its unwillingness to work with just anyone means it is highly sought after. To put it another way, it gets over a thousand incoming new business enquiries each month. It turns down the chance to work with customers that could multiply its annual revenues because it knows that as soon as it dilutes the proposition and work with firms that are not a fit, then the good people will leave and the business will suffer.
Related: Why the Best Thing Any Entrepreneur Can Be Is Versatile
6. Understand your culture.
Businesses are like families; they have values and a way of being. These are often a function of the leader or founder's values. As you grow, you need to be sure to involve people who share those values. For example, if your company has a laid-back, fun culture where you empower people and don't take yourselves too seriously, then don't hire people who want a corner office and an assistant. Culture can make or break a company. If you don't know what your culture is, you'd better find out. Look at Google's culture and then look at say, Hewlett-Packward. Google's culture is the foundation of its business, whereas HPE is still working to create one.
7. Timing is everything.
One of the biggest reasons businesses succeed or fail is a function of timing. Being in the right place at the right time matters. All of which goes to my first point about not fearing failure; in life, you don't always know until you try. Before there was a Google, there were numerous other search engines. Anyone remember Lycos? It was quite big in its time. Then Google came along and the rest is history. Google didn't create a dramatically better engine, but it did create it at the right time.
Related: How to Pick the Right Team for Your Startup
8. Think about growth.
We have all wondered what we'd do if we won the lottery. When starting a business, you need to think about what happens if it actually takes off. How will you scale? Who would you hire tomorrow? Would you open up in another city? Would you franchise the business? If you are trying to build the airplane while flying it, don't be surprised if you crash.
Last of all, never stop innovating. If you have the right culture (tip No. 6), hire amazing people (No. 1), and constantly put yourself in your customers shoes (No. 4), then as an entrepreneur you've created a company that should endure. I raise this last point because I believe companies have a choice: you either innovate or you die. It's that simple.
At Next 15 we recently launched a funding program called Project Warhol. If any employee has a great idea for a potentially viable new product, service or business in the marketing technology arena, we will fund the initial development of the idea. The idea could be anything from product development to launching a startup. This desire to innovate strengthens our culture in two ways. It says that we are a company that is truly open to big ideas that can come from anyone. It also reminds everyone that, although Next 15 is a global company, we need to think and work like a startup. However, it could also be what creates the next wave of growth in the company. Markets don't stand still, they evolve, and as they do they leave the dinosaurs behind.