• Like every entrepreneur, it would take a lot of trial and error to finally figure out how to build and grow a business that could scale.
• My advice is heavily based on lessons I learnt by making a lot of these mistakes.
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You have done your research, have some cash in the bank to start you off and you feel you are ready to launch that startup. You are wondering whether you have everything you need to start this journey? We have you covered. Meet Susan Karanja, an entrepreneur and growth hacker with over 10 years of experience in marketing, business development and customer experience. She will be sharing practical advice, based on her rich experience, on areas she feels most startup founders overlook that affect the growth of their businesses.
I always wanted to be an entrepreneur. Even while at campus, I had a plan to work in the corporate world for just long enough to raise enough capital to start my business. So as soon as I could, armed with my degree in International Business Administration, experience in sales, and customer service dove headfirst into entrepreneurship. Like every entrepreneur, it would take a lot of trial and error to finally figure out how to build and grow a business that could scale. My advice is heavily based on lessons I learnt by making a lot of these mistakes. I’m therefore happy to help fellow startup founders navigate the minefield of growing a scalable business. It starts with simple things. Below are 4 such things that affect the success of your business.
What’s in a Mission Statement?
A Mission Statement is not just something you write on your business plan and forget about, it is the statement that clarifies the 4 most important business questions that will make or break your business. These are:
- Your problem statement - who & why?
- Your solution - what?
- Your value proposition - how?
- Your business model - when?
My Advice:
Get clarity on your business objectives. You can do this by having a clear problem statement.
Answer these questions:
- What problem or need you to solve for a customer?
- How do you solve the problem/need for your customers?/Why are they willing to pay for your product/service?
- Is what they are paying enough to sustain your business expenses + profit.
The first time I took a stab at entrepreneurship, I knew we needed a mission statement/problem statement but I didn’t understand why it needed to be very specific. Therefore we ended up starting a company with a vague Mission - 'An ICT software development company' There was no clarity on the customer or the value proposition, thus the business modeling was quite, non-existent to say the least.
Is Timing Important?
A stitch in time saves nine while a startup launched at the right time easily grows to sustainability. They say timing is everything, at my first startup we were too early in the market. Lack of other businesses in a niche sometimes means the market is not yet ready and being the first in a market is a competitive disadvantage, not an advantage. We were building android apps for universities back in 2012, something that was clearly ahead of its time as we were spending too much time trying to educate ICT Managers why they needed a custom android app to run their students’ affairs.
Importance of Market Research
Basing your entire business on a non-validated assumption that customers want your product is the sure way to go out of business. The danger lies in that you believe if you build it they will come. In our case, we spent too much time building demos(a non-revenue activity) instead of building our own saas product/business model around a paying customer(a revenue-focused activity). A problem that can be traced back to business modelling and in turn back to a faulty problem statement. My advice is to avoid making decisions based on feelings, ego, and assumptions but to rely on data.
Startup Team Dynamics
Choosing a co-founder and defining each founder's role is important. For us, while there was a clear distinction in professions, there’s a lot to be done that affects the bottom line that doesn’t fall directly into one’s profession. Being a startup founder means you will wear multiple hats. However, not having clear deliverables on each founder and failing to have a North star metric or at least KPIs is a sure way to fail in your business. Ensure you have JDs so that each person is clear on responsibilities and expectations.
Pricing
We made the mistake of terribly underpricing a service and this miscalculation threw off our entire business model. We were spending too much time serving one customer to onboard new customers, and what they were paying was not enough to support the resources in time and staff it was consuming. So we had to let the customer go. The lesson about pricing is that you should charge what a product or service is worth and not what the customer wants.
If a customer is not willing to reach the price point of the product’s full cost, then explore finding a customer who will. If you can’t find one, it means your current business model is not viable. Consider adjusting the product or finding a new category of a customer for the product. It’s important to note that if you are competing purely on pricing then you have no value proposition and you terribly need to review your business model.
Brandon Mull said, “Smart people learn from their mistakes, but the real sharp ones, learn from the mistakes of others.” so, be sharp!
I do business advisory for startups, feel free to talk to me about your business idea and I'll help walk you through your startup process. Together, we'll build a business that grows in sales and profits month on month by thinking through your execution well before starting in order to avoid common pitfalls that would otherwise cripple your business income & its growth. If you are an entrepreneur, I'd love to connect and interact with you in the WomenWork community.