Start and Grow a Low Risk Business

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I heard from a friend that their big corporation just laid off hundreds of people. It could be from mismanagement, market downturns or simply another industrial age company ending their cash cow ride.

It’s easy to lose sight of the bigger picture. If people don’t want what you offer, then your business is going to simply go away. Businesses exist to meet demand. No demand, no business.

But, new businesses can also emerge simply from new demand. That’s great news for entrepreneurs that can notice what people want. And, for those that already have a security blanket – a job or a business – it’s easier than ever to start a new business with low risk.

There’s no such thing as no risk. You can only lower it in the face of competition, uncertainty, complexity and market dynamics. And it’s critical to manage risk when it comes to new ideas and ventures.

I’ve written a lot about managing downside and pursuing opportunity. You can check out my resource on productizing for creating options for yourself.

If you feel secure, then it can be a time to put energy into new opportunities for hedging your cash flow in case your gravy train runs out.

If you have had success and sold a business or had a payday, then you can open up a new game for yourself to see what opportunities might emerge.

If you don’t know what to do, there is nothing like action to help you get more clarity.

Being a sitting duck and waiting for something to happen can be a painful jolt when the shoe does finally fall.

While there are businesses that are shuttering up, the great news is there is a ridiculous amount of opportunity out there as well for those that are proactive, smart and eager.

How could your cash flow disappear? What’s holding you back from creating new business options?

Find Businesses That Already Have Demand

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What do people already want to buy?

It’s far easier to meet demand than create demand.

I have been in businesses that are innovative and the proof of concept, go-to-market strategy and target customer all have to be identified. This approach takes a lot of commitment to discovery and gathering feedback. You have to see what sticks and makes sense to a person you are in conversation with.

If you simply identify and meet existing demand, you spend little time in R&D trying to figure out what people want. People already buy services like accounting, HVAC, furniture moving and marketing. You are helping people with what they are already wanting. Helping people is the focal point and doing it pleasantly, consistently and with excellence is enough to drive revenues.

If you have a new service, then see if you can tell the story in terms of what is known. If you have to spend a lot of time educating people, it can be expensive and frustrating. We buy things we know.

Perhaps your invention does a better job cleaning a room than vacuums and disinfectants. You can spend a lot of time educating people on why your invention is innovative or you can open up a cleaning service and sell monthly service plans.

The idea is to look for existing markets that your use case markedly performs better with. Maybe make your are offering a tool to use within the business rather than a product everyone has to understand.

Convincing people they need something they have a hard time understanding can drain your bank account fast. Leave that to the infrequent world changer that comes along.

We have a ridiculously crowded market place. People are buying things all the time. Simply give them what they want.

You Need Strategy

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Many times when we are working in the grind we get so busy that we can’t see the forest from the trees. You may be working hard, but your hard work may be on things that don’t contribute to the bigger priorities.

It’s why having a regular and focused time for strategy keeps you from wasting energy on the wrong things.

If you are growing a business, you can’t afford to be unclear. It becomes costly quickly.

And if you have had much experience in business, you realize that there are not any shortcuts. The reality is that two things matter: strategy and hard work.

Knowing what to do and doing it consistently moves the needle. There’s no gimmick, magic or back door that hands you success on a platter.

You have to work just as hard at clarity as you do the actual work. And clarity is not free. It comes with thinking through the competing priorities, opportunities and constraints that are part of your mix.

Has the work you have been putting forth the last month mattered?

How can you make space for strategy regularly?

Design for Quick Feedback

“Everyone has a plan ’till they get punched in the mouth” – Mike Tyson

The great thing about business is that you can test ideas quickly to see if what you think or want to do is valuable. Small tests done quickly to get feedback from customers will go a long way towards pursuing or developing an idea further.

Yes, make a plan. Then try it out quickly to see if it resonates and creates interest and engagement.

Most things we see today are needed and businesses exist to give people what are known established needs. Things such as:

  • Car dealerships
  • Cleaning services
  • Grocery stores
  • Electronics stores
  • IT services
  • Banks

There is historical demand among the millions of people out there consuming such products and services.

If you are innovating on a new type of product or extending a concept, think about how to test your idea quickly by proposing and putting it in front of real customers. You can find out quickly via feedback how to further develop your idea or abandon it altogether.

The Egg of Columbus

Monument to the Egg of Columbus.

Yes, you could have done that after you have seen it done. We get that benefit today watching how people put together solutions by benchmarking what others do first.

The Egg of Columbus story where Columbus challenges his mocking critics to make an egg stand on its end highlights the perception of others’ success.

If you discover something and share it or bring a solution that was not readily apparent, it becomes common, likely underappreciated, knowledge.

I think humility all around helps a great deal. We benefit from seeing something done and using it in our work and life. Watch a Youtube video, research a topic or simply ask a neighbor how they did something. The insights can save you pain and time.

At the same time, you are contributing when you figure out and share your knowledge. Others can take a look at your creativity or determination and integrate it towards their pursuits.

Learning and sharing can save a great deal of cost when we are trying to do hard things. We should simply appreciate those that make the egg stand.

This is More Productive

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“It is more productive to convert an opportunity into results than to solve a problem – Which only restores the equilibrium of yesterday.” ~ Peter Drucker

I am a sucker for solving problems. And I have to take heed to the wisdom in this quote. Which one makes more impact? A new opportunity or an old problem?

If my goal is to contribute, be useful and make an impact, then making space in my life for opportunities to present themselves and be acted upon is the priority. Busywork, noise, outdated commitments – these have to be pruned out decisively. Otherwise, like weeds, they clutter the landscape and opportunity for new growth.

Creating value for others comes down to solving the right problems. And the right problems tend to be coupled with timeliness.

Perhaps you have a lot of balls in the air as well. Simply cutting out what doesn’t make sense creates space for the new.

Maybe you’re measuring success by how busy you are rather than how much free time you have. The latter can be an indicator of your capacity for taking on new opportunities.

I have found that there are plenty of opportunities that cross one’s path. But working on old problems allows no space for those to be recognized, entertained and acted upon.

Technology Darwinism

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Automattic, the makers of this blogging platform, WordPress, bought Tumblr for less than 2% of it’s previous acquisition price of $1.1B. The hype has  died with another platform. And technology darwinism, survival of the fittest, the tried and true, is brutally pervasive.

Social can make you feel like something is happening. But, it’s hard to find a lot of testimonials of a complete stranger doing business through a social post.

We don’t have 5 different Facebooks with equal power. We have one that dominates. It’s still to be seen if it persists or if the world flips from privacy issues or attention fatigue to sink the ship.

Automation can be alluring and you can bring in so much technology that noone buys into using it in your company. Whether you move the needle of ROI can become overlooked by technology and the perceived power it holds.

Anyone can make their world more complex. And most people do. What if you could take a step back and remove what you have built up in your life. See what matters and doesn’t matter? The guys at Yes Theory deleted social media for 30 days and the outcome was life changing.

Maybe you find out that you can consolidate platforms. Perhaps you see a lot more time returned to you so you can put it to things like creativity and strategy.

We tend to like to add things to our lives rather than subtract. As technology consolidates and some platforms die or limp along painfully, I think of it as natural evolution on a hyperspeed pace. Our collective groupthink helps to filter and see what matters and doesn’t matter – what adds value and what does not.

In our own work and lives, we should speed up our decision-making so we can enjoy the outcomes of what is better at the end of the long cycle of technology darwinism that eventually weighs itself into our lives. Whether we are strategic or intentional can make the difference on reaching our goals faster.

Be a Lateral Thinker

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When we are buried in the details of our work, it’s hard to look around and see connections to worlds outside ourselves. We can be talking to the same people within our crowd, read the same blogs, and look at the world through a myopic lens.

Some of the big ideas of today such as taking software platforms, connectivity, mobile and cars can produce inventions like Lyft.

A company like Stripe took their expertise in coding and made connections into financial tech and banking. It was daunting, but rewarding as they brought their lateral thinking to the problem of making online payments easier.

If you straddle different worlds, know the culture and nuances of different segments, you can powerfully introduce solutions that connect the dots that might escape a specialist’s trained mind. Lateral thinking is value add in this increasingly complex and polarized world. There’s extreme efficiency and speed occurring on one end of the spectrum. On the other end, there’s high complexity which requires creative, consultative solutions.

Bringing outside, fresh perspectives can change the way a problem is solved.  If you are a lateral thinker, you can open up the conversation to new possibilities.

You can notice and exercise a few approaches in your work and interactions:

  • Be sure to play in different worlds deeply rather than invest fully into one area of work day in and day out.
  • Meet new and interesting people that think about their fields intensely. Ask great questions and learn.
  • Keep great notes and think of how new perspectives create new solutions for your problems. Test them out and see what comes of trying different approaches. Then share them to help others.

If you can connect the dots you become valuable to others that are conventional in their practice. Your contribution increases.

Think about your domains you invest in. How can they merge or collide in a way to create even more value?

The world is getting more efficient on the whole. But, the creativity and lateral thinking opportunity is there to be applied to multiply those efficiencies.

Don’t Do Grand Openings

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I don’t do grand openings. If you have an idea, skills and the hard work to persist, simply get your first customers and start serving them.

This idea that we are anything special out in the marketplace of hundreds of thousands of options is absurd. You have to earn that over time from learning, iterating and contributing.

Whether you actually contribute is yet to be determined and a celebration before it happens is bad manners.

Instead, when you are ready to be useful, how about:

  1. Developing a path for your customer to be successful. Get buy-in.
  2. Executing towards the plan.
  3. Communicating when things happen or when things change.

Then do it again and refine as you go.

I think you’ll use your energy and everyone’s attention in a much more productive way.

Don’t Be Original

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The romantic idea of creating something innovative and new can get us sidetracked quickly in entrepreneurship. There are 28 million small businesses in the United States as of this writing. You are competing with all those businesses, minds and offerings. The likelihood of being original is difficult against such staggering numbers!

Think about how you buy. You likely buy the same groceries and try one here and there for kicks. You spend money at a lot of the same places – restaurants, gyms, haircuts, etc.

Heck, we largely have the same phones in our pockets. Could you invent a new phone the masses would buy?

Instead of seeking to be original, give people what they want. Be valuable. Be understood. Allow your message to be clear. Take what people want already and compete on being “cheap, fast or good.

You can build on viability and find where the innovations are while actually working hard to meet known expectations and needs.

There is definitely a place for inventors and pioneers. We need dreamers and challengers. But, you want to be around and be relevant. And that takes empathizing, observing and being industrious. Meeting people’s needs and building the conditions for doing business together are no small feat.

Giving people what they want places you in the game. Being good at giving people what they want is hard enough. Trying to invent or find people to want what you offer can be a relentless slog. Perhaps you can innovate, dream and be original in an art form. Do your business by meeting needs and being valuable in business. If you must act on your originality and dreaming, build a non-profit, perform art or give away your ideas in a whole other context. That might be the better mix for underwriting your ambitions.