By Marco A. Soriano, Founder & Managing Director at Soriano Group
However popular these days it may be in the global corporate world, a comprehensive analytical approach to planning does not suit most start-ups. Entrepreneurs seldom lack the time and monetary resources to interview an array of potential new clients, let alone analyze substitutes, reconstruct competitive cost structures, or even project alternative technological scenarios. In fact, too much analysis can be harmful; by the time an opportunity is assessed thoroughly, it may already have vanished.
Yet all ventures merit some analysis and planning. Appearances to the contrary, successful entrepreneurs do not take unnecessary risks. Instead, they use a quick, cheap approach that represents a middle ground between planning paralysis and no planning at all. They do not expect perfection—even the most astute entrepreneurs have their naughty starts.
In my experience, we have guided our global clientele in four general guidelines to aspiring Founders and CEOs:
- Screen out unpromising ventures by screening the opportunities quickly.
- Focus on a few important issues by analyzing ideas in a frugal way.
- Do not hesitate to get all the answers, and always be ready to change strategies with integration, analytical action, and execution.
- Innovation by understanding the future’s needs to today’s markets.
There is no ideal profile. Entrepreneurs can be gregarious or taciturn, analytical or intuitive, cautious or daring” as written in a Harvard Business Review in 1994.
Exploiting opportunities in a new or changing industry is typically faster than disrupting markets in already mature industries. A great deal of creativity, experience, and networks are substantially important to take business away from your competition in a mature industry, where market forces have discarded old weak technologies, boring strategies, and poor organizations. But new markets are a different story altogether. There, start-ups often face rough-around-the-edges rivals, clientele with high tolerance for incompetent vendors and products with defects, and chances to profit from shortages.
Small insights and marginal innovations, a little skill or expertise (in the land of the blind, the one-eyed person is King), and the willingness to act quickly can go a long way. In fact, with great external uncertainty, clients and investors may be hesitant to back a radical product and technology until the environment settles down. Unfortunately by then, it is simply too late, so you must explain that opportunity to them. Strategic choices in a new industry are often scarce; entrepreneurs have to cleave immediately to the emerging standards for product features, components, or distribution channels. The leverage provided by external change is illustrated by the success of numerous start-ups in hardware, software, training, retailing and systems integration that emerged from the personal computer revolution in the 1980s. Today, it is quite clear that big data platforms and cyber security tend to be the big questions to be answered: so, how are you prepared to adhere to these new standards?