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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.

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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.

Start-up Advice

How To Apply Lean Principles To Your Start-up’s Productivity And Time Management

Focusing on one thing at a time is a very good start.

John Rampton

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If you’ve recently launched a start-up, I’m sure that you’ve heard a lot about being “lean.” But I’m not here to discuss the methodology popularised by the likes of Eric Ries.

The lean principles from a Toyota exec

I’m actually writing about the term and concept of “lean” that was originally developed by Toyota executive Taiichi Ohno during the reconstruction period in Japan following World War II. The process was so successful that more and more organisations around the world began to embrace it. However, it didn’t hit the mainstream until James P. Womack and Daniel T. Jones released their book Lean Thinking, in 1996.

Applying “lean” to productivity in start-ups

Today, lean principles have been applied to almost every industry both large and small scale. For instance, lean principles in the healthcare industry have been able to reduce costs, while improving efficiency. On a smaller scale, employees have used these principles to organise their workspaces.

Related: What Business Should You Start In Africa?

Here are four ways you can apply lean concepts to your startup to improve both productivity and quality.

1. Improve your workplace using the five principles of lean

According to the Lean Institute, which was established by Womack and Jones in 1997, there are five core principles of lean:

Value: Value means putting yourself in your customer’s shoes and knowing what their needs are. This helps you determine timelines, pricing and expectations instead of constant trial and error. For your team, letting them know how they fit into the bigger picture can keep them motivated.

Value stream: Value stream is where you create a “value stream” of all the steps and processes required in getting the final product or service to your customers. This could include design, production, delivery, HR and customer service. Knowing this information allows you to eliminate any wasteful steps.

Flow: After you’ve removed any unnecessary waste from the value stream, you want to make sure that everything runs smoothly. Flow means not having any interruptions or delays. The flow involves breaking down steps, leveling out workloads, creating cross-functional departments and training your team so they can develop multiple skills.

Pull: When flow improves, so does the time it takes to get your goods or services to customers. As a result, they can “pull” whenever needed so you’re not constantly under- or overproducing inventory, content, etc.

Perfection: Even after successfully completing the first steps, you still need to constantly keep working to improve processes so that you can eliminate waste. Perfection may be an exalted goal in whatever endeavour we are pursuing – but we still must always be moving forward toward being the best and achieving the best.

2. Use the concept of 5S to get yourself organised

5S stands for sort, set in order, shine, standardise and sustain. You can use this concept to organise your workspace so you and your team are more productive by doing the following:

  • Remove any items that you no longer need (sort)
  • Organise your remaining items so you’re more efficient (straighten)
  • Keep your workspace clean and tidy so you can find items and identify problems more quickly (shine)
  • Color-code and label files and calendars to make you more consistent (standardise)
  • Develop repeatable behaviours and habits that will keep your workplace clean and organised, such as completing one task before moving onto the next (sustain).

You and your team – even if they’re virtual employees working from a home office – can get started by throwing away anything unneeded. Place files into cabinets – colour-code your calendars – and keep items you frequently use nearby.

But these principles aren’t just limited to physical items. Digitally, you can use a project management system to assign tasks, quickly see the progress of projects and share files and comments in one organised dashboard.

3. Standardise your work to become more efficient

In manufacturing, there’s a standard process for everything. The reason? By doing something the same way time and time again you will eliminate waste since you’re not constantly trying out new techniques. Standardising also prevents errors and forgetfulness because there’s a checklist for ever step of the journey. For example, when a car is on the assembly line, it can’t move forward if someone forgot a bolt or installed a faulty steering wheel.

4. Standardise what makes sense

Start by keeping a time log to see when you’re most productive and how you’re spending your time. You may notice that you’re most productive in the mornings. If so, that’s when you should work on your most important task.

If you discover that you’re checking your email and social accounts too often, schedule specific times throughout the day to check them. To prevent wasteful meetings, you can standardise meetings. Make sure these meetings are necessary and include only key people pertinent to the information. Keep all meetings as short and concise as possible.

Get into a good flow to optimise your and your team’s performance

Flow is simply how work can progress through a system. When your system is running smoothly, flow is good. When flow hits a snag, it slows down the process and waste occurs.

Manufacturing facilities make it a point to ensure that the flow is good. Unless it’s an emergency, production lines rarely stop running. Everyone has a specific job to do, and that’s all they’re focused on. That’s not the case at your start-up. You must wear multiple hats, as well as deal with constant interruptions. How many times have you been in “the zone” and gotten distracted by a phone call or have no choice but to go put out a fire?

Remember focus

One way you can improve flow in your start-up is by focusing on one thing at a time. That means no more multitasking. Give your 100 percent focus to what you’re working on at the moment and then move on to your next task. This may take some self-discipline. But you can start by turning off all push notifications, closing your door, block scheduling and setting boundaries.

You can also help your team improve their flow by setting “do not disturb” zones and time frames. Another tip is to schedule a “no meeting” day. This way you and your team can maintain focus without getting interrupted by a meeting.

Finally, you may want to consider outsourcing and delegating certain tasks. Instead of worrying about your inbox all day, hire a virtual assistant to manage your email. If you need to get your books in order, then bring in a bookkeeper. This frees you up to work solely on growing your startup.

This article was originally posted here on Entrepreneur.com.

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Start-up Advice

Which eCommerce Platform Should You Build Your Store On?

This is an important decision to make and with so many options out there it can become a bit overwhelming and confusing to decide which platform is the best option for you. So which platforms are best suited for a South African eCommerce entrepreneur?

Warrick Kernes

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Having owned and run websites using XCart, Magento, Shopify and WordPress, I’ve made enough mistakes and learnt enough lessons along the way to be able to help guide you to make the right decision about which platform is right for you…

When looking for options you’ll come across platforms like Prestashop, WordPress, WIX, Shopify, Squarespace, OpenCart, Magento, Shopstar, OneCart, ShopOn, LiquidBox, BigCommerce and endless more. All of which are trying to convince you that their platform is the best for you to use.

Reading international blogger reviews is helpful but they don’t account for how these website platforms perform in South Africa. They don’t review what the support is like in SA and which local software services are compatible. You see, these points are often neglected until you need them further down the line and only then find out how important it is that the platform you’re running your store on is made to work in SA.

Having worked with all the major website platforms I understand the importance of website support and how the site integrates with the local services which will make your life easier and your website better. Services like this include integrations into Rand (ZAR)  based payment gateways, integrations into local courier services, API connections into marketplaces like Takealot and Bid Or Buy, and API connections into price comparison sites too.

Related: 6 Steps To Building A Million-Dollar Ecommerce Site In 60 Days

The final factor to consider is the reputability of the website platform itself. There are many new and upcoming website platforms which I would love to support but when it comes to choosing a platform on which I’ll be building my business I need to know that I am going to be selecting a world-leading service provider.

So with this in mind I can help to narrow down your options to two platforms being WordPress with WooCommerce and Shopify. Which of these two is right for you will depend on how much you value your time.

Shopify will cost you $29 per month but the ease-of-use is such that even a novice can get a site live within a week. Operating WooCommerce on WordPress is complex for beginners and it will take you much longer to figure it all out before you can take your site live but the plus side is that it is free to use.

So ultimately you need to consider which of these two is right for you and your business but the most important thing is that you don’t spend any more time researching, take action and get started sooner rather than later so you can start to grow your online empire.

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Start-up Advice

6 Ways Starting A Business Is Like Raising A Child

Here are six ways that embarking on your own entrepreneurship journey is like raising a child.

Catherine Black

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While you may think work and parenting are worlds apart, when it comes to starting a business versus having a baby, the two have more in common than you think.

After all, both involve bringing something new into the world, preparing for the unexpected, and riding the storm when things don’t go as planned. Here are six ways that embarking on your own entrepreneurship journey is like raising a child:

1. It involves new expenses

From nappies and school fees to food and clothing, there are a whole lot of new expenses involved when it comes to kids. In the same way, starting a business also involves various costs – whether it’s paying accounting fees, setting up your website, buying stock or employing people. In both instances, having a good financial plan in place can go a long way to help you manage these expenses.

Related: How To Start A Business With No Money

2. It’s an emotional rollercoaster

Parenting invariably means you’ll experience every emotion under the sun, from unmatched joy when they’re born, to frustration at toddler tantrums, to wonder at seeing their little personalities develop. The same goes for a new business: Expect a range of emotions, from the highs of getting your first customer, to the satisfaction of making a profit, to anxiety if the market doesn’t respond to your product as you envisioned.

3. Expect the unexpected

Few things are as unpredictable as babies: One minute they’re gurgling contentedly, the next minute they’re crying for reasons you may or may not know. Just like babies, businesses can be highly unpredictable too. Product prototypes can fail and cause delays, employees get sick, an unforeseen tax bill could arrive on your desk – you’ll need to get comfortable with expecting the unexpected. And, if you run your business full time, you’ll need to bid farewell to your predictable monthly paycheque too (at least in the beginning).

4. It requires stamina

Late night feeds, helping your child with homework, washing, cooking, cleaning, answering all their burning questions – there’s no parenting “off” switch. In the same way, being an entrepreneur means it’s hard to stop thinking about your business at the end of the day as you would with a regular 9 to 5. This constant call for attention means it’s crucial to schedule in some downtime for yourself so that you get time to decompress and refresh.

Related: What Business Should You Start In Africa?

 5. You’ll need safeguards in place

While their immune systems are immature, young children get sick, which typically involves trips to the doctor, medication and possibly even the odd hospital stay. Having a good medical aid means you’ll be financially prepared for these intermittent expenses. And, just as you should ensure your child has the right medical cover, your business and your employees should also be covered properly. Fedhealth is one example of a medical aid that specialises in providing medical cover for SMMEs.

6. Love will get you through

As hard as parenting can be, the enduring love most parents have for their children means they keep caring for them day after day, no matter how exhausting it is. Similarly, if you love the industry your business is in and the work you do, you’ll have the fortitude to keep at it over the long term.

Both parenting and starting a business are hard work, but they’re hugely rewarding too. With both of them, it’s true that what you put in, you get out. Seeing your child grow into a well-adjusted, caring adult can be as satisfying as watching your business mature into a something that’s profitable and self-sustaining. Upon reaching these milestones, most people will agree that the journey to get there is definitely worthwhile.

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