The Entrepreneurs Mirage: Avoiding the Most Common Startup Killers
The visual image of a parched and weary traveller in a barren, hot desert seems like a great metaphor for your journey as an entrepreneur. Sparked by the curiosity of the distant mirage, you trudge forward hoping to be welcomed by an oasis of customers and business fortune.
As an entrepreneur, you are a problem solver. Your gift is an ability to create a solution that fills a void or improves an existing solution. Yet, like the allure of a desert mirage, you occasionally become so fixated on the problem you solve that you lose touch with the reality that will ultimately ensure your business survival.
The entrepreneur’s mirage is the belief that creating the perfect solution is the key to startup success. Too often, entrepreneurs get stuck in “solution mode,” where exhaustive amounts of time and capital are spent attempting to create the perfect solution.
And when you launch with marginal success, you reiterate the solution or abandon it altogether, never realizing that the missing ingredient was not a more perfect product – it was a sales strategy.
Our research shows that the majority of startup disasters are linked to a failure to connect with the customer. The commonly acknowledged startup killers – premature scaling, running out of capital, and a lack of market interest – all have a root in broken sales strategy.
START WITH SALESMANSHIP
It’s a huge problem when a brilliant entrepreneur cringes at the idea of selling. Many of the brightest innovators have a toxic reaction to selling and immediately look to delegate anything that has to do with the sales process. What they fail to embrace is that selling is a reality that everyone, regardless of role, engages in every day.
Selling is merely an exchange. It may be a product or service, but it can also be an idea, opinion, or action. Every interaction you have is exchanging something with someone.
Once you embrace the reality that you are always selling, it becomes imperative to understand what you are selling. The product or service you offer, or money you receive in return, isn’t as significant as the perceived VALUE of what you are exchanging.
Consider for a minute that your customer is not buying the widget that you sell. Rather, the customer is buying the VALUE that widget creates for them. Customers don’t care who you are or what you offer until they can see that it can create value for them.
Therefore, the question you should constantly be asking yourself is, “What value does my solution create?” If you want more success, create more value.
The entrepreneurial process is based upon the creation and exchange of value. Whether you are solving a problem or improving an existing solution, most entrepreneurial epiphanies are value driven. Yet as concepts evolve into startups, entrepreneurs without a sales perspective may turn their focus to appeasing investors, or become obsessed with perfecting their solution in hopes that it will sell itself.
Whatever the reason, you begin to lose touch with the value you create for your customer and find yourself wandering aimlessly in the hot desert – burning through cash and lacking sales.
Thus, your challenge is to innovate empathetically; in other words, innovate with the needs of the customer in mind. If you engage first in the value you create for your customer, then the development of your solution will become far more organic and efficient. There is much to learn by listening to your customer and getting that feedback loop started early.
BUILD TO SELL
The S model is based on the premise that a well-crafted sales strategy is the key to a successful startup. We encounter many early-stage startups that are struggling to define their sales cycle. This ambiguity leads to costly inefficiencies and process gaps that disrupt the customer flow. It is never too early to start thinking about the sales process and consider questions like, “What are the steps of my sales process? Where am I sourcing leads? What are my lead conversion rates? How much is it costing me to acquire a customer?” These questions will help you begin to visualize and map your sales process. Once mapped, you can begin to refine the system, track performance metrics, and most importantly, automate.
CLARIFY THE MESSAGE
Once you have a defined sales process, the next step is to start attracting customers. This brings us back to our earlier discussion about value. Even the most valuable solution is futile without a system to relay value to your customer and motivate them to take action. This is where messaging comes into play. Messaging includes your branding, emails, mantras, ads, brochures, and every word that reaches your customer. Crafting effective messaging, although key to a successful startup, is much easier said than done. So before you go, take a few minutes to explore the following questions and don’t hesitate to reach out to us if we can be of assistance:
- What product or service do you provide, and how would you describe it to a 5-year-old?
- Who is your ideal customer (get specific – who would you prefer to sell to)?
- Where can you find your customer (social media, publications, events, etc.)
- What are 5 of your customer’s biggest pain points?
- What are 5 solutions your product/service offers?
- Who are your competitors, and what strategies are they using to reach your audience?”
- What messaging can you pull from the reviews, critiques, and suggestions of your customers?