Last week at OCRI’s Entrepreneur’s Edge (e2) program, I had the pleasure of lecturing on how to perform market assessments for new products or businesses. The e2 program is a full week of half day sessions covering all aspects of starting a new venture such as strategy, governance, R&D, marketing, sales and funding.
At the beginning of the week, the e2 attendees and faculty members get together over dinner to network, talk business and learn more about each other as we get ready for the e2 week ahead. The dinner evening usually includes a guest speaker to share their particular entrepreneur / startup experiences and last week’s guest speaker was Allan Isfan, CEO of FaveQuest. Allan’s talk focused on his experience working in and running various companies and he closed his talk with his top 10 reasons for launching a startup now. He also blogged about speaking to the e2 crowd here. I’ve used Allan’s top ten reasons as a starting point and added some of my own thoughts as well…
10 – Opportunity to demonstrate your skill and tenacity
- most people don’t have the courage to bootstrap a company in this climate
- your offering needs to be compelling to get partners and paying customers in a down turn. If you do, it says something significant about you, your team and your company.
9 – Tighter teams
- if your team sticks together in the tough times, you’ll emerge extremely tight – nothing builds closer teams like overcoming adversity
8 – Focus, Focus, Focus
- you don’t have the luxury of goofing around and building “wouldn’t it be cool if” type concepts
- you’ll need to focus on true customer value to make sure you get traction
7 – Talented people available
- the reality is, in this climate, there are plenty of talented resources out there
6 – Market uncertainty
- the market is experiencing a major disruption which creates opportunity. Everyone is looking for a new edge, the next big thing. Why shouldn’t that be you?
5 – Less competition
- many startups will drop off, especially if they don’t know how to be frugal
- large companies are reeling as they see their sales and profits erode. They end up being internally focused on cutting costs just to stay alive and as a result they stop innovating.
4 – Be Frugal or Die
- when times are tough, you’re forced to be extremely frugal or you won’t survive. This is a great skill to develop and is just good business practice even for when the market rebounds.
3- Lower Costs
- you can get equipment for pennies on the dollar, rent office space for much less than you would in boom times and salaries can be lower too
2 – Forced to test the market
- if you are relying on revenues for operations or you’re living off limited funding, you have to sell early and close deals quickly which means you stay very close to the market
- don’t be afraid to ask for an order early on in your customer engagements – asking them to part with money is the ultimate test of how much they value your offering
1 – You fill this one in…
- What do you think the # 1 reason is for why your company would have a better chance of succeeding because you started it in a down market?
Please post your comments and share you thoughts.