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4 Lessons for Aspiring Entrepreneurs

Business.com / Last Modified: June 11, 2018
Image credit: SFIO CRACHO/Shutterstock

Turning a promising idea into a successful business is the daily struggle of every entrepreneur. The most successful startups understand that building a sustainable company takes more than just a good idea.

Though precise figures are difficult to come by, experts estimate that some 50 million companies are founded every year – that’s roughly 137,000 every day. Of course, nearly as many companies close their doors for good in that same timeframe, underlining a truth that’s as easy to recognize as it is hard to accept – entrepreneurship isn’t easy.

As founders, there’s nothing we want more than to bring our vision to life, but if my nearly two decades of experience in the startup space have taught me anything, it’s that concession and compromise almost inevitably accompany success.

The path from ideation to disruption is littered with roadblocks. Some are minor inconveniences, some are major obstacles, but all require the insight and flexibility that are hallmarks of a pragmatic entrepreneur. This is something I had to learn the hard way, but that with the benefit of hindsight can be distilled into four simple lessons.

1. It’s OK to start small

The path from ideation to disruption is not only roadblock-ridden, it’s also long. As such, it’s important to approach each new business opportunity as a marathon, not a sprint. Especially in hypercompetitive market niches, there’s always the temptation to include as many features, products and branding strategies as possible, but this should be resisted at all cost.

Instead, start with what you know will work in practice, in the real world. An effective startup strategy is as much about what you don’t do as it is about what you do. For instance, when my co-founder and I first launched Reonomy – a commercial real estate data platform – we knew that we wouldn’t – and shouldn’t – even think about a nationwide product until our platform had been tested and proven in New York City. We drew up a clearly defined plan of what “phase one” would look like, and we executed on it. If we had attempted to go national from the get-go, we would have almost certainly failed.

2. Build for your customers, not yourself

The success of any startup – especially in the short-term – depends almost entirely on its customer base. This may seem like a truism, but far too many entrepreneurs either ignore or forget this insight once they throw themselves into the ideation process. It’s exponentially more difficult to build the product or service of your dreams – and then aggressively sell it to people – than to simply build the product or service that your customers want or need.

Tailoring your offerings to the needs of potential customers isn’t rocket science – just ask! Better-resourced startups should assemble a user experience team to solicit input and feedback from customers during ideation, beta testing, at and around launch and beyond. But even bonafide bootstrappers can leverage their networking opportunities – meetups, conferences, etc. – to get a feel for what people are really looking for in their market niche. I regularly interface with executives from other real estate tech companies, real estate brokerages and other industries, just to stay informed of cross-industry shifts, both subtle and substantial.

3. Learn to scale intelligently 

Starting a company and scaling it are two very different challenges. Timing of the jump from beta or niche-specific to a national or “full” product and pacing of the rollout are critical, but they’re just two of many concerns an entrepreneur must attend to as their company grows.

Siloing, for example, is a persistent problem that many startups don’t address until it has already hampered growth. Establishing different departments – for different market niches, different geographic regions, etc. – isn’t inherently problematic, but entrepreneurs should be careful to avoid creating multiple “micro-companies” before their startup’s culture and processes are clearly defined. If the only way to scale up your product or service is to redo most or all of the foundational work you’ve done in your initial market, you might need to reevaluate your business model, as repeatedly “refounding” your company is an incredibly inefficient – and usually ineffective – approach to achieving scale.

4. Beware of self-sabotage

In my experience, most startups die from self-inflicted harm, not murder. In other words, as much as we’re conditioned in business and, really, in life to be most concerned about the threat posed by “the competition,” the reality is that subpar in-house processes and relationships usually represent a much larger threat to young companies.

For instance, when we first launched Reonomy in New York City, my co-founder and I were reluctant to rely on data partnerships. Instead, we planned to build using only our own proprietary data and data gathered from public records. But as we started to scale, it became very obvious very quickly that such obstinacy would be the downfall of our company. The approach we’d taken to collecting data in NYC simply wouldn’t work on a national scale, and would force us to take an unrealistic amount of time to reach the level of coverage we wanted to offer our customers.

Fortunately, we chose to adapt, and as a result were able to scale from a NYC-specific tool to a comprehensive data platform covering over 49 million properties in more than 3,000 counties and 20,000 municipalities across the country. This would never have been possible had we insisted upon adhering to our original vision.

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