Streetsmart CEOs learn lessons from the struggles of others.
Here are three for your brain to cogitate on today:
- Never sell Swiss Army knives. The new Galaxy Note is a "phone-tablet hybrid" making its debut. What are reviewers saying about the device? Here are one harsh declaration: "makes you look like your're talking into a piece of toast." And it is seen as "all of the above", meaning it is mixing smart phone with tablet with mobile device. In other words, it combines a lot of gadgets into one device. What is a Swiss Army knife used for? After opening all the gadgets, the user sets it on the desk and soon it is a great paperweight. Period. End of wonder. What does your product need? That is simple: it must have Focus + Wow! One thing done with wonder. You win. Swiss Army knife products lose.
- Winning Number 2 companies (Chimpanzees) have to be radically different to thrive. RIM's Blackberry is a great example. What does it need to do? Not be better than or similar to the iPhone. No. Instead be crisply different. Let Apple sell to kids. Rim is "For adults only" or "Industrial strength". RIM's security is much stronger than Apple's. Corporations prefer that. So contrast the adult phone with the kid's phone. And thrive as a strong Number 2, a healthy Chimp existing in the shadow of a strong Gorilla. And try to pick a market for your startup that is not yet dominated by a Gorilla. In an early emerging startup market, if you begin to fall behind a leader, remember to strive to be clearly different.
- Confidense with how your business model can make money trumps jumping off the cliff blindfolded. Pinterest has $37.5 million of venture capital invested in it. It's VCs are bragging that the startup's "monetization strategy isn't in the oven and i's not even off the baking table." Do you believe that? I don't. And neither do the VCs. They did not invest with their eyes closed. It is simple to calculate right now the amount of regular users needed by Pinterest to generate the annual revenue needed to create the huge value required for an IPO needed by the VCs to get rich. That is simple arithmetic, a simple Excel model to build. Sure, the precise method by which the company sets up the ads will be a work-in-action (think Facebook's on-going experiments and slap-backs by the privacy-sensitive Facebookers). So get out Excel and build your Business Model for your new enterprise. Investors (and smart potential employees) will be asking you "How will your startup make money?" The stronger your answer, the lower the risk and the higher the value of your startup will be to investor and talented employees. It's worth the hard work.
BOTTOM LINE: Watch, read, and listen to other entrepreneurs and innvators. Study the marketing wars. Then apply what you learn to your startup. It's how the Great Ones rose to success. It became part of their unfair advantage. You can do it too!
I wish you The Best on your Adventure!
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