In our Hexavian mastermind groups, I usually love to ask:
Which is more important to a business
- Business Model
What do you really think it is?
Well, while you make your choice, consider these few hints. If there was a recipe to business success, then I’d describe timing, your business model and structure, quality of team, finance and ideas as the ingredients. Let’s try and explore some of them.
On Timing, a wise man once told me that whether life of business, if you arrive too early, you’d be gone too soon. Casio had a touch screen watch in 1984 (same year the original Mac was created). But Apple two decades later made a killing with it through the iPhone.
We most times neglect the importance of perfect timing. There was a Video Streaming company called Zoom. Zoom launched a year just before YouTube, same idea, service and all. But that was at the time when, broadband internet, flash players and video streaming was a challenge. So it couldn’t scale. Just the following year, telecom companies started to fix some of these issues. YouTube launched that year and was a child born in due season. Remember, that if you arrive too early, you’d be gone too soon.
There is also an ingredient I’d like to call the Business Model. Forget MBA’s and business school jargons, in lame terms, a business model refers to how a business or an organization hopes to capture and distribute value for profit. The big question is, should it be static or dynamic. It answers questions on your value propositions, market and customer segments, revenue streams, production framework, distribution networks, cost structures and growth plan. It is dynamic and should be responsive to market forces and evolving times.
How often should we visit our business model when it hits resistance; or should every resistance be seen as an assistance if you have the persistence?
I’d also have to state that quality of your team is key. We all need not just a team, but a winning one. To go fast, go alone. But to go far, go together. Not every team is an asset, some will stress and deviate you from your vision. In the process of trying to give light, some will burn and melt you down, candle style. Don’t just get team members get partners who complement you. Growing your startup through strategic partnerships is a key differentiating strategy. As Ralph Waldo Emerson wrote “hitch your wagon to a star.” But at what point do you exit, add or change a team or team member?
There is also the much talked about ingredient of finance, funding. Yes, if more funds is judiciously used, it helps you grow through economy of scale as you can produce more and drive down better supply than competition at a lower price which invariably stimulates more demands and makes you do more. But you need disciple and structure before finance else it may be squandered plus finance is really not always easy to come by or to manage.
Please remember that in the idea of raising money, consider that it’s only less than 1% of startups that ever get Venture Capitalist funding and most of these startups fail. We overate this ingredient. Most people assume that if they get more funding they’d have better businesses. This is usually not exactly true. What’s true is that it’s not what you don’t have that stops you, it’s what you have and don’t know how to use.
Raising money is extremely time consuming. This is worse in a country where people are not assertive enough to say no, they just waste your time. Think of it as a full-time job on top of building your business. Is it really worth your time and attention? You can do trade by barter through strategic partnerships. You can fuel a part of your ideas by mere passion till it finds those to point you better.
Most successful startups are self-funded.
Lack of money helps you focus on making money above all else. It is also true that bootstrapping will only get you so far, but too much focus on raising capital can take away your focus from what really matters in your startup.
Bootstrap your business, avoid excess liquidity. Too much money will hide problems and it will force you to “do big things” you are not yet ready for.
The last ingredient is what I probably should have started with. That is the ingredient called Ideas. Ideas are the most common manifestation of the human spirit. It’s somewhat over rated as everyone has them. We all carry solutions to things, the seed for success. The differential is in its execution. In all, never let the idea of a solution to die as just as an idea. Not all ideas can manifest, most transit. Start it and be open to that transition. Don’t be too emotional and passionate with your original idea, and watch yours metamorphic-ally turn into something else different from the original plot, most times to a better place. Ideas are powerful, only when activated.
Where do ideas really come from, the mind?
Well, contrary to popular views, it’s really not from the mind, but from the spirit. Go deeper. I suggest you should have a routine for mindfulness and meditation. Have a chamber for solitude where you connect to yourself and higher purpose and you’d generate deeper ideas. Go on retreats, hang around deeper people. Whether life or enterprise, some of the greatest battles will be fought and won in the chambers of your soul and spirit.
You’ve got to be intuitive. Be mindful. The mind is the most powerful weapon known: it produces every other one; created not in the cognitive space of the mind but the spirit realm, Ideas pull the trigger but intuition loads the gun. But beyond intuition comes the process of moving from ideas to executions in terms of ideas, there are only 5 types. They are listed below as
- *The Simplified Idea* : You want to make a process and task much easier for your users ( e.g Instagram’s Layout using just photos as against Facebook, or Whatsaap which for me was Blackberry Messenger but without a pin). It an idea that simplifies a process.
- The “Me Too” Ideas: With this type of idea, you take an already existing idea but then you introduce it to a new market /geography (e.g Gokada, regarded as the Uber for bikes in Lagos; with an app, you can call a bike to come pick you up). Another example will be AliBaba, it’s more like Amazon from China.
- The Virtual Based Idea: With this, you are moving a business to the internet (e.g Wikipedia, which is like Encylcopaedia on the internet, Drop Box which is like hard drive on the cloud/internet).
- The Remix Idea: This refers to combining two or more ideas together (. E.g Slack for example is an online messaging at the same time a team collaboration app that still makes all content searchable. With Slack you can work with your team on a group and still with the same app place an order for some food).
- The Mission Impossible Idea : Doing what haven’t been done ever ( this is getting harder to do by the day): take for example, Richard Branson’s Virgin Galactica, is more like an airline to the moon. It is to take us to create real estate and space travel accessible to the general public.
So what type do you have?
And beyond having them you have to have a strategy and strategic management framework for its execution. Define the idea, document and break them down into structure with milestones, then move to execution, as you execute, consistently evaluate and deliver them into tangibles, end to end.
Being consistent is also key. You need all the dosage of commitment and consistency you can have, for like they say, consistency and commitment is being true to what you agree and said to yourself that you’d always do, even after that initial feeling you felt when you said it has left you. You may stagger while at it, it’s a part of the process for a baby’s imperfect and staggering walk is still better than its most perfect crawl. Trust the process.
Cheers to the years ahead, cheers to your startup, cheers to your growth. If you keep going, the higher tops of where you are will be your home, see you there.
Strategy. Business StartUps and Corporate Restructuring Consulting
Uwaoma Eizu is the lead strategist at Hexavia! He is a graduate of Mathematics with two MBAs and over a decade of experience working with startups and big businesses. His core is in building startups and in corporate restructuring. He is also a certified member of the Nigerian Institute of Management, Institute of Strategic Management of Nigeria and the Project Management Institute, USA. By the side, he writes weekly for the BusinessDay newspaper.