4 Lessons From Successful Entrepreneurs
For First-Time Founders
Recently, after seeing a few pitches, I’ve noticed something that most inexperienced first-time founders share— they want to be everything to everyone. This is a misstep because acquiring the first group of loyal customers is a common step in new product development and implementation. When you market to everyone, you market it to no one.
For the first-time founder selling high-tech products to mainstream customers, initially trying to please everyone isn’t the most practical approach. It’s earning the trust from the first groups of people (innovators, followed by early adopters) at the beginning of the technology adoption lifecycle. Mass market acceptance of an idea won’t occur until you achieve a tipping point between early adopters and the early majority. Otherwise known as “the chasm”.
The early majority won’t try something until someone else has tried it first and this starts by serving one (type of) customer really well. Narrowing your focus even when you aren’t entirely sure who your customer is yet is a better strategy than throwing stuff on a wall and seeing what sticks.
Proven techniques to help you cross “the chasm” include understanding the whole product concept, positioning the product, building a marketing strategy, choosing the best distribution channel and pricing. Below is advice from successful entrepreneurs you can learn from about differentiation and early adoption in order to scale your business:
Define Your Own Category
The year David Sacks launched Yammer 10 years ago the official category was “Social Software in the Workplace”. This category was determined by Gartner’s Magic Quadrant and included companies like IBM. Sacks realized early that Yammer couldn’t compete against the incumbents as long as he was going to be compared to them. So he defined his own category: Enterprise Social Networking.
“Defining our own category, rather than playing by the incumbent’s rules, made all the difference. More often than not, those who define the category win the category.” — David Sacks, Yammer Founder
Don’t Chase Trends
Joseph Flaherty, Director at Founder Collective, warns startups against chasing after trends because you’ll inevitably find yourself stumped by the platform paradox. Replicating an already successful model can cause you to set unrealistic expectations.
“Keep an eye on macro trends, but employ them in the service of a specific use case for a specific kind of customer. Technological fads come and go, but human use cases are durable and can be exceedingly valuable.” — Joseph Flaherty, Startups, Beware “The Next Big Thing”
Do Things Unscalably
“Uber ride this morning with a software eng turned surfer who now wants to do a surf-related marketplace. He said he could get it going for $50K and I challenged him to get there on $10K. Get teammates, figure out pricing and unit economics and do things unscalably at first.” — Garry Tan, Managing Partner, Initialized Capital
Engage With Early Adopter Community
Alexis Ohanian is Managing Partner at Initialized Capital, bestselling author and Co-founder if Reddit. Based on personal experience, Ohanian knows how imperative it is to engage with your community of early adopters.
“When you’re getting started, being an engaged founder within your community of earliest adopters carries real weight, especially if it’s a community product. It shows them you give a damn, which builds loyalty, (because you’ll need that when you inevitably misstep). And it gets you close to your core customers, who you’ll need to make the right decisions about product and the business.” — Alexis Ohanian, If Guilded Had Existed 20 Years Ago, I May Have Never Learned to Code
Define your own category, don’t chase trends, do things that don’t scale and being engaged with your early adopter community are all valuable lessons for launching a startup. Additionally, if you’re truly trying to disrupt a market, then I hope you know it really well, show that you feel the problem and are empathetic to the customer.