I have mentioned more than once that an idea is not a sufficient ingredient in creating successful businesses. An idea alone is great, but it is not worth very much if one is unable to make that transformation into a business. – Mr Inderjit Singh, The Art and Science of Entrepreneurship.
The execution of an idea is a very big part of a business. In the dot com days, people were betting plainly on ideas, many of which were not executed well, causing dozens of startups to fail. Investors were so fanatical about the ideas, they did not realize that the team was not capable enough to execute it into something tangible. A lot of money was poured and lost on these startups.
From there we learnt that the idea alone is not the most important ingredient in a startup, the execution is more important. In today’s startup boom, many investors have taken a more pragmatic approach, focusing on the team as well as the idea. Many a time a start up will change its idea completely through the incubation process. They still get incubated, because the investors are confident in the team to execute something good.
You will be more likely to succeed if you are able to transition and execute an idea into a business.
Here are some ingredients to have when creating your Start Up.
1. A Strong Team:
The relationship between you and your partners is like a marriage.
– You will see each other through the pain and the glory.
– You will spend sleepless nights working together.
– Like a marriage you have to compromise and complement each other.
– You stand to benefit or loose the most out of the whole relationship.
Choosing the right partners that can and will bring you the best out of the whole situation. It is good to find someone that you find easy to work with, shares the same vision and who can complement your skills. A partner or employee with strong domain knowledge would also be a great asset to the team.
That being said, there will be many times of frustration and disagreement. Like a marriage, you all will have to work to stick together, so as to achieve your goals.
As a big part of your team, the people you hire will be the backbone of the company. It is through them that the company will grow. When hiring the main points we consider are the qualifications and the experience. We should also be looking at their ambitions and goals.
If they are keen to stay in the same industry that you are in, they will stay long and be committed. They are there to learn, contribute and build their careers. This will keep them in the job for a longer period of time, with lots of motivation to push on.
Another thing to look at is their strengths and weaknesses. Study their past and ask them to list their traits. In a Start Up, people may have to assume more than one role and they have to be able to help in other functional areas if the need arises. By knowing their traits, strengths and weaknesses, you will be able to place them better.
You need to be able to tap into every available resource you can get, so if there are people in your team who are very strong in certain areas, place them appropriately and tap on their experience to guide you further.
2. Investors and Mentors:
Investors and Mentors are not just around to give you money and send you on your way. They should also be able to add value by guiding you and helping you to open doors. The reason you bring in people to invest in your company in return for equity is to tap on their knowledge and networks. If you need cash only, then it would be better to borrow from family, friends, or even banks.
It is best to look for investors and mentors who are in the same industry, or have experience in industries that are linked with yours. They should be able to help you grow your business. The investors own part of the company through equity, they would want to help to see their investments grow too.
Before choosing an investor it is best to talk to other companies to see how their experience. The reason being that working styles may differ, and you do not want an investor from hell, hindering you from running the company.
3. Understanding and Predicting the Market:
If you have deep understanding of your target market, you will be able to predict trends better. For example, during the financial crisis, many luxury car dealers realized that many people would avoid spending their money on such luxury items. They realized that people still wanted to ride these super vehicles, so instead they started renting them out.
This created a new business altogether, because driving such expensive cars was more accessible. Renting a Lamborghini at $650 a day is affordable even if you are not super rich. By understanding the market, the companies were able to pivot their business model, to cater to a different market, keeping their business afloat.
Keep in touch with current affairs, technology and markets, as opportunities may arise from anywhere, at any time. If you are ready, you may be able to catch a very big wave to success.
The idea of understanding your business and your domain is very important. The more knowledgable you are about your industry, the more threats you will be able to avoid and the more opportunities you will be able to pick up.
There are many other factors to look at in your own specific business. It is best to sit down and consider these factors as part of your execution plan. There are a millions of ideas floating around, but it will take some hard work to turn an idea into a successful business. The execution is the key to a successful transformation and to achieve the best thing to do is to cover as many points as possible.