Successful Entrepreneur Best Practices

Two and a half years into this new career of providing guidance and advice to entrepreneurs, and the most interesting learning is that there isn’t a silver bullet of advice, there is not even a single bag of bullets.

That said, after twenty two years as an entrepreneur, with now six companies that I’ve founded or co-founded, 25 fledglings startups, and more than a hundred other startups I’ve taught in Bainbridge Graduate Insitute or at various workshops, I am seeing quite a few recurring patterns.

Successsful entrepreneurs have good ideas and are constantly out looking for value, looking for profits and have enough conversations with customers to be able to stand in their shoes to see a new way of doing business.

Value

The true purpose of a company is to bring something to market that customer will find of value. Before you ask me or anyone else for advice on your idea, go ask a few customers, “Would you pay $Z for X?” Whatever your X is, and whatever $Z you think it is worth. With five yes’s in hand, then start asking for advice on how to turn the idea of X into an actual X. If you don’t know five potential customers, then ask yourself, why are you thinking about building a company in a market you know so little about, and have so few connections.

Profits

How many customers would have to pay $Z for you to have a business, instead of a hobby? Revenue = $Z x N. How much will it cost you to produce N copies of X? How much will it cost you to find and sell to each of those customers? Given that, you probably need to actually sell 2N or 3N copies of X to make a profit. If you build it… not only do they not just come, you instead have to work hard to get the to even know it exists, then work harder to get them to buy. Go beyond the Business Model Canvas and spend at least an hour determining whether this great idea you have has the potential to be a business.

Shoes

Stop standing in your own shoes, and start standing in your customers’ shoes. And investors’ shoes. And your next potential team member’s shoes. And any partners’ shoes. Why are they going to buy, invest, join, or partner? What is in it for them? Whatever offer you are putting on the table, imagine they are bringing it to you. Do you still think it fair? Would you sign that deal?

Conclusion

Lastly, if you are determined to be an entrepreneur, then expect to repeat these three patterns multiple times before you have a plan that is worth executing. Good ideas are a dime a dozen. Great ideas are exceedingly rare. And history has clearly shown that nearly all great ideas came from entrepreneurs with good ideas who were out looking for value, looking for profits, with enough conversations with customers to be able to stand in their shoes to see a new way of doing business.

Related Best Practices

• Business Plan for a Startup
• Startup Funding Sources

Other Resources

• Luni Libes Blog with postings on advice for startups
• Startup and Entrepreneur Resources

Author

The author of this article is Luni Libes.