Connect with us

Start-up Advice

3 Tips For Starting A Company In An Unfamiliar Industry

Launching a company within an industry you know nothing about? (Like Elon Musk did). No, you’re not crazy.

Published

on

Elon Musk

Launching a company within an industry you know nothing about isn’t impossible; nor is it necessarily an unwise move. In fact, your ignorance can be a blessing as well as a burden.

Just look at Elon Musk, who has started an array of companies in disparate industries – beginning with PayPal and continuing with SpaceX, Tesla and other ventures. With a background in fintech, economics and physics, Musk is thriving in the space exploration industry.

So, if a big name like Musk as well as countless other, lesser-known entrepreneurs have been able to successfully take on a new industry with only an idea and a lot of determination, why couldn’t I? I reasoned back when I first entered the video production industry. In actuality, I encountered obstacles as soon as I started.

Yet I’d still argue that market illiteracy can be beneficial. It sounds ironic, perhaps, but existing in blissful but enthusiastic ignorance can help you approach problems because you have no preconceived notions about their solutions. Instead, you’re coming from a fresh perspective and are likely unfamiliar with the giant challenges looming ahead

When that happens, those challenges can’t (and don’t) scare you.

Today’s struggles help you develop tomorrow’s strengths

When I entered the video production industry, I encountered plenty of naysayers who seemed to be stuck in the late 1990s, when film equipment was more expensive and less accessible, making video content harder to create.

My dream was to help companies meet consumers’ insatiable demand for video by making the production process cheaper and more efficient.

Starting a business, even in an industry you know well, is never easy. If you’re jumping into a brand-new market, things can seem downright impossible. What’s worse, I had to look past industry veterans who felt threatened by my approach and told me I didn’t know what I was doing.

Look – I’m not Elon Musk, and neither are you, but as my experience proves, you don’t have to be. While I didn’t know much about producing video content, I knew my vision was achievable. Today, Lemonlight is the company I dreamed it could be.

So, based on my experience, if you too are ready to leap into a new industry, here are three ways to set yourself up for success:

Ignorance can be bliss

1Ignorance can be bliss, but be careful with those assumptions

Before I launched Lemonlight, I conducted research to understand the market. And I probably spent more time at this task than many of my more established competitors.

Nonetheless, I still made poor assumptions. For example, I assumed it would be easy to hire freelancers to shoot video all around the country. Right? Wrong. I quickly learned that freelancers have their own styles and agendas and that it takes a lot of work to find the great ones. Thus, many of those we worked with early on were, frankly, unqualified.

I also ran into unforeseen expenses, such as a $40,000 server or payroll for media managers to move footage around internally. These costs added up fast. To compound that, I struggled with pricing early on since I really didn’t know how much it would cost to make the product.

My experience mirrors that of Raaja Nemani and Aaron Firestein, founders of the shoe company Bucketfeet. Firestein knew how to decorate sneakers, but neither had any experience in shoe manufacturing or managing inventory.

Failing to think things through properly led to a few big missteps for Nemani and Firestein early on: They once had a huge shipment of sneakers delivered not to a warehouse loading dock, but to their own house. They had mistakenly assumed it would be no big deal to unload 2,600 pairs into their garage. With a little (paid) help from the delivery man and a few friends, however, they made it work; today, Bucketfeet has sold nearly 500,000 pairs of sneakers.

2Balance your fresh perspective with expert experience

While it’s important to maintain your can-do rookie outlook, it’s also critical to bolster it with the advice of industry insiders who have domain experience.

Like me – and all entrepreneurs – you’ll inevitably be forced to learn some tough lessons quickly. Don’t let that discourage you. When CAN Capital’s Small Business Health Index surveyed small business owners about their expectations for the upcoming year, 64 percent of those surveyed anticipated growth.

When I started Lemonlight, I often took solace in the fact that, with no customers, growth was the only option. You, too, should have a growth mindset.

If you don’t have the capacity to stay optimistic, observe others who do and reach out to them. You’ll often find them running other businesses.

After bringing on a co-founder with a background in film, I needed a while to reconcile his expectations about high-quality video content with my dream of providing it at unprecedented low prices. I wanted to sell all of our videos for $500, for example, and we managed to do that for a while!

Still, my co-founder would constantly remind me that we couldn’t hire the right teams for so little money. Without them, our business would go under. So, working in tandem, we two slowly raised our prices until we found a price point that made sense for us and for our customers.

3Resist and persist: Be open without conforming

You’ll definitely need expert advice, but that doesn’t mean you should always act on it.

Jeff Kear, the founder of Planning Pod, said the worst business advice he ever received came from another start-up founder: That founder told Kear that he must secure outside angel or venture capitalist funding if he ever hoped to be taken seriously and get off the ground.

Deciding to go it alone and bootstrap his business instead of heeding that advice, Kear ultimately built a company that serves more than 1 200 customers and upwards of 20 000 users. Planning Pod has been in the black since its fourth month.

It’s important to consider the feedback and ideas of people who have been in your industry for a long time; however, you don’t always have to agree with them. Typically, those who possess the mindset that created an industry aren’t going to disrupt that industry. Be gracious when having tough conversations with industry veterans, but remember that it’s okay to challenge anyone and everyone around you if it’s going to move you forward.

As an entrepreneur in a new industry or one you’re deeply familiar with, you’re going to run into challenges, setbacks and failures. Don’t let them stop you.

By staying your own unique course, you can learn your own lessons, turn your vision into a reality, achieve your goals and live your wildest dreams – just like Elon and me.

This article was originally posted here on Entrepreneur.com.

Hope Horner is CEO and founder of Lemonlight, a video production company that produces and distributes branded video content at scale. Horner is a three-time entrepreneur who has been featured in Inc. magazine, on KABC and Extra and in other publications highlighting her successes in the Silicon Beach community over the past decade.

Continue Reading
Advertisement
Click to comment

You must be logged in to post a comment Login

Leave a Reply

Start-up Advice

Entrepreneurship: How To Develop Your ‘Great Idea’

There is one or more critical elements that a significant proportion of start-up entrepreneurs overlook when evaluating their own idea/s.

Dirk Coetsee

Published

on

business-ideas

Empty pockets never held anyone back. Only empty heads and empty hearts can do that. – Norman Vincent Peale 

Volumes of start-up entrepreneurs claim to have wonderful ideas that will serve as a catalyst to attaining riches. Often once internally convinced of their own great idea they march into the offices of bank managers, venture capitalists, or angel investors and ‘blurt out’ their earth-shaking idea with a staggering amount of confidence only to regularly hear loud and repetitive echoes of that unpalatable word ‘NO’ .

Totally devastated and mesmerised by the behaviour of investors, self-pity often sets in and the prospective investors are blamed for their lack of vision and understanding. Holding oneself accountable and doing honest self-reflection often only comes with a great deal of experience and wisdom therefore inexperienced entrepreneurs often falter at the first serious hurdle that they face and go back to a day job blaming others for their failure.

There is one or more critical elements that a significant proportion of start-up entrepreneurs overlook when evaluating their own idea/s:

Within the grand scheme of things it really does not matter if you think you have a great idea that will transform into a ‘money maker’ in reality it only matters if the market believes your idea is great and am willing to pay for it. An untested idea can never be great an idea has to be actualised and proven to be great or not.

Wise investors are more interested in investing in you as opposed to investing in ‘your great idea’ because the idea will only have traction and sustainability if the person that conceived it is willing to overcome any and every obstacle in his/or her way and move towards success with urgency and a sense of unwavering commitment.

Related: 20 Quick Money-Making Business Ideas

Carefully considering the above it is a smart move to create a ‘minimum viable product’ , to test your product in the marketplace and to adjust according to the findings of your research until you have moulded your ‘great idea’ into and actualised ‘great product’.

Do not attempt to entice investors armed with only a ‘great idea’ instead announce a market tested product with a proven demand when you pitch. Speak to industry experts, hear what entrepreneurial peers have to say about your products or services, create focus groups and have a number of consumers test your product. Carefully listen to the cues prompting improvements within their feedback and adjust where and if appropriate.

Engaging consumers, peers, friends and family with a minimum viable product is taking great strides towards not only refining and improving your product or service but also at the same time assists in formulating your sales and marketing strategy.

The attempt to take an untested product or service to a marketplace where the ‘lukewarm’ are often gulped up can cause a great deal of pain to the start-up entrepreneur and can be a very costly exercise. It can be both emotionally and financially draining to such an extent that the entrepreneur gives up on his or her dream relatively quickly.

To what degree you factor in the testing of your product considering both your start-up budget and project timeline can have a great amount of positive impact on your success.

As a business coach I have never underestimated the value of having a wise mentor whom can give sound advice and support especially during the start-up phase of your venture. Consult with your mentor on how to thoroughly test your product or service and structure the testing phase of your project in such a way that it saves you money and a lot of pain in the future.

Read next: The Ultimate 101 List Of Business Ideas To Start Your Own Business In South Africa

Continue Reading

Start-up Advice

How To Turn Your Side Hustle Into A Full-Time Gig

It will be scary, but also incredibly rewarding.

Nicolette Amarillas

Published

on

side-hustle

Few people are lucky enough love their 9-to-5s, and more and more people are finding themselves doing something else on the side, either to add to their income or to feed their passion. Sometimes, those “side hustles” start to feel more and more like “the real thing,” and suddenly these people are dreaming about running a business of their own. Sound familiar? If you’re one of the thousands of people dreaming about turning your side hustle into a true business, you’re not alone.

Moving away from a steady, full-time position to being on your own is the scariest, yet most invigorating feeling in the world. I’ve found most people consider entrepreneurship either unattainable or, honesty, highly romanticised. The reality is that neither is correct. Being an entrepreneur is a ton of work, but it’s also completely possible.

1. Be clear and honest with yourself about when it’s time to make the jump

Giving up the benefits and security that come with a full-time job is scary, and sometimes unrealistic, but it’s also dangerous to keep waiting until the time “feels right.” Ask yourself exactly what you need to have before you can make your side gig your new reality. A good rule of thumb is to have enough savings to live for about six months without income, and/or with the income you already have from your side clients.You should also have a clear idea of who your potential clients might be and how to connect with them.

Related: 20 South African Side-Hustles You Can Start This Weekend

After taking care of the logistical considerations, try to avoid dragging your feet. According to the British Psychological Society, you’re 91 percent more likely to accomplish something if you give yourself a deadline. So do it! Hold yourself accountable. Maybe you’re not willing to stay at your current job beyond a certain date, or maybe there will be other indicators that will make you certain that it’s time to go.

If your current role isn’t fulfilling and the passion is gone, it may be the perfect catalyst for making the jump.

Both of my businesses came to fruition because of my own realisation that I wasn’t flourishing in my current roles. I wasn’t the best, I wasn’t seeing the success I wanted and instead of feeling defeated, I changed directions. For me, the clearest signal that it was time to leave was that I didn’t believe in the goals I was supposed to be working toward.

2. Before you quit, put the processes in place to help your side gig scale

Early on, business organization and strategizing is a huge component of success. You’ll need to limit stress and create as much efficiency and ease as possible in your daily systems. This could mean scheduling things carefully, or using free software to make your work more effective. I try to divide the week into days assigned to different businesses tasks. Try as best you can to not switch back and forth between your different focus areas within the same day. Going back and forth between tasks that are not related is inefficient and breaks focus. Give your brain a break and keep yourself on one straight road each day.

Digitising your work can help, too. According to Accenture, companies that use cloud collaboration tools with their teams improve productivity, have greater clarity about what’s going on in their business and save money. When you first start out, it can feel silly to keep documents in a shareable cloud space (like Google Drive, DropBox or whatever option you like best), but you need to have the structures in place so that you’re organised and ready for the time if/when you hire a team to support you. This is a good thing to play around with before you quit your main gig. Having the tools and processes you know work well for you ready to go when you make the switch can make ramp up time easier.

It’s long hours, it’s always being “on,” its wearing too many hats, but it’s also incredibly rewarding. So, how do you successfully turn your side project or passion into a prosperous business? What are the steps? We all want the “1, 2, 3 and voila, here it is, a company of our own,” but realistically, how can we make it happen? I can only speak to my own experience, failures or what I like to call “directional pivots” and successes. There have been a few true catalysts that have helped me turn my two side gigs into full-time gigs.

3. Work hard, and be humble

Your time is valuable, but as new entrepreneur you can’t treat it like currency. What I mean is, be prepared to put in lots of hours with minimal return. Initially, time may not correlate with financial success; this is an incredibly important mindset to remember. Your time isn’t money, yet. It’s groundwork. Building a side gig up from the ground requires wearing a lot of different hats. If you want your business to succeed, you have to be ready to play customer service rep, salesperson, individual contributor and HR.

Related: 50 Jobs, Gigs And Side Hustles You Can Do From Home

If you’re feeling overwhelmed, break the work down further. Spend more time working on the day to day tasks, checking things off the to-do list. These are all working toward your big vision, but in small doable pieces rather than hefty overwhelming ones. Try not to consider any task “beneath you” and take some time to truly understand what goes into each part of your business.

You won’t have a boss telling you what’s right or wrong, so you’ll need to build a sense of self-accountability – one of the toughest parts of being an entrepreneur. Take notes about the challenges you face in each aspect of your business so that you’ll know what anyone you might hire will have to cope with. It’s your best chance to uncover important considerations and think about what resources might need to go where, down the line.

4. Surround yourself with smart people – even if you never plan to work with them

As much as entrepreneurship can be a solitary job, especially in the beginning, it’s vital to your success to remember how others can help you thrive. Invest your time in like-minded people. Take time to get to know others and their stories and create valuable relationships. So much of success is built from opportunities or inspiration from people we know.

Find people you connect with to talk about your ideas, write about your ideas online and build a community that empowers you. Take advantage of those around you who want to see you succeed. You’ll be surprised at how much people want to help!

Related: 3 Ways To Set Your Side Hustle Up For Success

The number of new startups and small businesses has dropped dramatically in recent years, nearing a 40-year low in 2016. The landscape has gotten tougher, which makes being an entrepreneur scarier. Turning a side hustle into the real thing is not easy, and I’d be lying if I said I loved every minute of it. But, just as with most other big decisions in life, there are always lessons to be learned no matter what happens. Be thoughtful, take smart risks and see where your “side hustle” can go.

This article was originally posted here on Entrepreneur.com.

Continue Reading

Company Posts

How To Keep Big Ideas From Being Big Failures

Simple, Yet Effective Business Advice from Clients on Demand Founder, Russ Ruffino.

Jeff Broth

Published

on

business-idea-failure

As an entrepreneur, it’s not uncommon to have big ideas. Ideas that, if worked properly, can take your business to higher levels.

Maybe you’ve came up with a way to enhance your products or services that would advance your company lightyears ahead of your competitors. Or perhaps you’ve thought up a new gadget or tool that, once developed and released, could potentially change the world as it exists today.

The problem with having these big ideas is that sometimes they fail. And they can fail hard.

Big Ideas Can Equal Big Failures

Take Coca-Cola, for instance. On April 23, 1985, this well-known company announced that it was changing its formula and releasing the “new Coke.” While its goal was to update a soft drink that had been 99 years in the making, it actually had the opposite effect. Consumers were mad. Real mad.

People had grown to know and love the taste of Coke, so the thought of it changing didn’t sit right with their taste buds. Many protested the company’s actions, creating such a stir that, in addition to being picked up by news sources everywhere on that day, it is still being talked about today.

Ultimately, Coke recovered and is still loved by many. However, it easily could have went the other way, potentially causing a revolt big enough to force them to close their doors.

So, what can you do to take your big ideas and turn them into wins versus risking them becoming huge failures capable of sinking your business? According to one entrepreneur, you simply do a numbers test.

Related: 3 Companies With Memorable Slogans, And How To Create Your Own

The Numbers Test

In a People Stack Podcast, Russ Ruffino shares that his company, Clients on Demand, is on track to earn $20 million this year. This number is up from $4.5 million in 2016, just two short years ago, and Ruffino says that one thing has helped him reach this level of success is that he and his team use data to help them decide what to do. “We always run the numbers,” says Ruffino.

For instance, if your big idea is to recreate one of your current products, how much will it cost your company to make and test a prototype? What about manufacturing costs on a larger scale?

Think also about expenses related to marketing the updated product line and costs associated with creating enough buzz to get it to really sell. Put them all together and see what the numbers are telling you.

Sometimes New Isn’t Better

You may just find that newer isn’t always better. In fact, Ruffino says this is typically the case as, usually what he finds at Clients on Demand is they can typically “get to our income goals faster by just getting a little bit better at what we’re already doing.”

Benjamin P. Hardy, a former top writer for Medium.com in the self-improvement and entrepreneurship space, agrees and adds, “It doesn’t matter how good your strategy is, if you’re not skilled at what you do, that strategy won’t take you very far.”

That’s why Hardy recommends that you put yourself in challenging situations. “This is how you evolve,” he says. And be sure to follow your own path and keep your why’s in front of you along the way to remind you of what is driving you forward. Let these motivate you when times get tough.

It’s only natural to come up with big ideas in business. That’s what being an entrepreneur is about. Just make sure you follow your numbers and those big ideas can potentially become big successes.

Read next: 10 Business Ideas Ready To Launch!

Continue Reading
Advertisement

SPOTLIGHT

Advertisement

Recent Posts

Follow Us

Entrepreneur-Newsletters
*
We respect your privacy. 
* indicates required.
Advertisement

Trending