I first presented my ‘7 Start-Up Lessons from Amazon to Zattikka’ at a shared workspace to a number of small and medium sized start-ups. The presentation went well and I decied to use it more often and convert it into an e-book (coming soon).
When I meet a new client for the first time, it can be hard to put across the real value of my experience, without overwhelming (and scaring) them with how hard it can be to start and grow a successful business.
Data from the Enterprise Research Centre collected in 2017 shows that only 53% of businesses started in 2013 were still trading in 2016. Of these survivors, only 7% had achieved any measure of scale, doubling or tripling their turnover in the year to 2017.
Sir Isaac Newton famously said: “If I have seen a little further, it is by standing on the shoulders of Giants.” We live in a society with an unprecedented level of record and documentation. It has never been easier to learn from the mistakes of others and strive to build success and avoid common mistakes.
During my thirty-five years of work experience, we have seen dramatic shifts in the world of work, especially with the advent of the Information Age and the ongoing digital transformation of work and society. Throughout this, I have observed, seven common factors that contribute to success.
The 7 Factors are:
- Business Focus
- Hiring The Right People
- Know Your Business – the Long Pole in the Tent!
- A Passion for Data
- Show Me The Money
- Just Do It
- Innovate, Adapt, Overcome
I was fortunate enough to be part of the team of Bookpages, that were acquired by Amazon in early 1998. Within two weeks, I was on a plane to Seattle, to meet and learn from the Amazon team and replicate their success in the UK. One of the key things that stick in my mind from that trip and the months following on, was importance of Focus. A good example of this was the analysis Jeff Bezos did, which led to the decision to sell books first.
Know Your Customer – Jeff is undoubtedly one of the smartest people I will ever have had the fortune to meet. He had thought through and chosen carefully his entry into what would become known as ecommerce. After careful research he had recognised that the early adopters of the internet were a close match with the demographics of the heavy book buyer.
Furthermore, he observed that with the incumbent infrastructure of the book trade, heavy book buyers usually had the worst experience when shopping in person in modern bookstores and the convoluted and slow supply chain was satisfying nobody. The final piece of the puzzle was the opportunity, via the internet, to deliver a new customer experience for these heavy book buyers and Amazon – Earth’s Biggest Bookstore was born.
Too many ideas, not enough time – Books weren’t the only ambition of Amazon. Jeff believed that it wasn’t the right time to broaden the product range and expand until they had proven their business model, built up brand awareness as well as their customer base. Available resources are also a key factor. I remember Jeff saying clearly:
“There is only so much management bandwidth, so focus on what is going to work now and next. Don’t forget those other ideas, save them for later.”
Focus is key. Who are your customers? Why will they want to buy your product or service? What differentiates your product or service and makes it stand out from the competition?
Dave Mutton, Start-Up Coach
Success Factor 2 – The Right Stuff
OK, so you have thought it through, you know who you are targeting and why. You know what you need to do to get that startup off the ground, but do you have the right people to make it happen – and that includes you?
As Steve Jobs of Apple said:
“It’s about getting the right people in the right seats on the bus.
When you’re in a start-up, the first ten people will determine whether the company succeeds or not. Each is 10 percent of the company. So why wouldn’t you take as much time as necessary to find all the A-players? …A small team of A-players can run circles around a giant team of B and C players.”
Someone working in a start-up needs to have the following, valuable personality traits:
• Curiosity
• Passion to solve problems
• Tolerance
• A willingness to learn
• Adaptable, a survivor
There is an element of Serendipity in any Start-up and it’s sometime a bizarre, but wonderful feeling, to arrive dead centre of a target you didn’t even know you were aiming for.
Having the right people that can recognise the value of this unexpected discovery could be the difference between success and failure.
Dave Mutton, Start-Up Coach
Success Factor 3 – The Long Pole in the Tent
This was a phrase I heard in Seattle back in 1998, I think it might have been Rick Dalzell, the first Head of Operations for Amazon. It was his job to ensure that the Distribution Centre network they were building, did the job and did it right most of the time.
The Long Pole in The Tent is the critical process that, if it fails, it brings down the whole business – for Amazon that was the Supply Chain. The level of detail that went into planning and implementing the Amazon supply chain was phenomenal. It is well known today how Amazon obsessively tracks key metrics in it’s warehouses and the efficiency of the supply chain team.
Today it is, (or should be), commonplace to have a deep understanding of the customer (or product) journey when interacting with your business. Good research in this area is important and there is nothing so humbling as observing your customers fail to use your product or service as you intended.
Do you understand what is your critical point of failure? What contingency plans have you made if something goes wrong – or takes off – fast success can bring its own challenges.
Dave Mutton, Start-Up Coach
Success Factor 4 – A Passion for Data
In any business, but especially a Start-Up, Data is your friend. But it is not enough to capture data, you have to be able to understand and take actionable insights from it. Einstein once said: “Not everything that can be counted, counts and not everything that counts, can be counted.” So, make sure you are counting the right things!
It’s important to remember that Data is an indicator of behaviour, but not the only indicator.
Donald Rumsfeld once said:
“There are known knowns. These are things we know that we know. There are known unknowns. That is to say there are things we know we don’t know. But there are also unknown unknowns. There are things we don’t know or even suspect.”
I’ve written a separate blog piece about this and the fourth factor, Unknown Knowns. The key takeaway is to build a deep understanding of how your business operates, who your customers are and how they engage with you. Without this it is hard to measure success and set goals.
The key things you really need to know:
• Who are my customers?
Dave Mutton, Start-Up Coach
• What do they need?
• Are we fulfilling that need?
• Can we build long term value?
Success Factor 5 – Show me the Money
It’s a long a winding road to success and a key milestone is demonstrating to investors (and customers) that you can make money from your business. There are two sides to this. Firstly, it is essential that you plan and forecast what success will look like and what are the key milestones along that journey?
Secondly, building a deep understanding of your business allows you to tactically fail fast. Stop doing what isn’t working. This will enable you to adapt and try something new and allow you to continue on the journey to success.
If your investors (and that means you too!) become unconvinced that you will ever hit those milestones, then you need to seriously reassess the viability of the business. It’s also important to recognise that most external investors don’t want a successful “lifestyle” business that will support you and your family. They want to see their investment scale up, grow and deliver a significant return on their capital.
Do you know what success looks like for your business and do you measure how close you are to achieving it?
Dave Mutton, Start-Up Coach
Success Factor 6 – Just Do It!
A key success factor for working in a Start-up, is the ability to deal effectively with challenges and not be afraid to change direction. You need to recognise that not everything you try will work and that failure is a very effective learning tool. Empower your team to take decisions and act, without having to get endless approval from you and you will find the results should speak for themselves. Of course, it goes without saying, that the actions have to be well thought out, have a reasonable chance of success and fit in with your overall strategy. Amazon called this the “Just Do It” approach (and beg forgiveness if it goes wrong!). An annual award ceremony presented a pair of dirty Nike trainers (sneakers) to the winner.
The concept fostered a culture of innovation and trial that served Amazon well in the early years of growth. Amazon has never been afraid to try and fail at an idea – but be warned, this approach requires the capability to assess new ideas and fail fast, if necessary.
Is your team empowered to act, or paralysed by excessive management oversight?
Dave Mutton, Start-Up Coach
Success Factor 7 – Innovate, adapt, overcome
And that brings us to the final tip. Success for your Start-up will involve a lot of planning, hard work, a good portion of luck, but more than anything, it requires the right mental attitude from you and your team.
An unofficial motto of the US marine Corps is “Innovate, Adapt, Overcome.”
This succinctly illustrates the right attitude for business success. Whatever life throws at you, you can either embrace change and make it work for you, or you can let it roll right over you and maybe take you where you don’t want to go.
One of my early colleagues at Amazon, Chieu Cao, went onto to co-found a business, now called Perkbox. The business is doing very well now, but I remember Chieu telling me how hard it had been, in the early days, to find the right business model that could scale. “We pivoted the business at least three times trying to find the right formula and stop haemorrhaging cash.” Chieu and his co-founder, Saurav Chopra, believed in what they were doing and kept tweaking the model until they achieved significant traction and started to grow.
Are you ready to adapt and change, if necessary to fulfil your business potential?
Dave Mutton, Start-Up Coach
Summary
I hope you found these tips useful and as a Thank You for reading this post right to the end, here is a bonus eighth tip.
You can read similar tips in many “How to” business books, but the crucial factor in business success is down to Execution. Whatever you do, do it well and to the best of your ability.
This is where Business Consultants like me can really help, by learning from our experience, avoiding mistakes and using best practice to optimise your chances of success.
Why not connect with me and let’s explore how I can help grow your business.
You can learn more about us by reading our blog or connecting with us via Social Media on Twitter or LinkedIn
