Building a Startup The Smart Way (Part One)

This article follows the journey of a typical entrepreneur, starting with their visionary thinking it follows their journey along the road to growth.? Article two takes up the mantle along the highway.? Part three follows the pattern as they speed up to become a strong sustainable business (hopefully! after many bumps and pitfalls along the way of course).

Part One focuses on where entrepreneurs begin and what integrates their thinking in starting a business.? It starts by defining a vision followed by continuous learning and iteration.

A Visionary Story : A Founders Journey

An Entrepreneur and a manager are one and the same.? Both are responsible for building a vision while one (the Entrepreneur) focuses on his or her vision of what they want as a startup the manager concentrates on his or her role within an institution (public or private) in developing the vision and priorities of others.?

The Entrepreneurs vision is filled with so much uncertainty and unknown aspects of what’s ahead while the manager however, (perhaps with some level of uncertainty from within and external forces) is generally in a more stable environment as an employee.? They are focused on making sure the organisation concentrates on a more structured environment.

Elon Musk is a notable example of a visionary startup founder. ?He co-founded several groundbreaking companies, including Tesla and SpaceX. Musk is known for his ambitious vision of a sustainable future through electric vehicles and renewable energy, as well as making space travel more accessible. ?His ability to tackle complex challenges and inspire innovation has had a significant impact on multiple industries, from automotive to aerospace.

In The beginning

Entrepreneurs’ ideas come from a variety of sources.? They identify problems or gaps from personal experiences which they believe can be solved through a building a product or service.? Turning a personal passion or hobby into a business can lead to innovative ideas that resonate with like-minded individuals.? By observing how people interact with products and services the can spot areas for improvement or look to offer something new.

Entrepreneurs’ keep themselves well informed of patterns and trends from around the world.? They monitor changes in society, culture, and the economy which can inspire ideas that address emerging needs, such as sustainability or remote work solutions.

To develop their thinking they embrace advancements in technology which can open up new possibilities for products or services that didn’t exist before.? Analysing market trends, consumer behaviour, and existing businesses helps inspire ideas that can meet unfulfilled needs.? Seeking feedback is important to them.? Talking to potential customers, friends, or mentors equally provides valuable insights into pain points and desires, sparking new ideas.

By exploring these avenues, entrepreneurs generate unique ideas that have the potential to become successful ventures.

An Entrepreneurial mindset

A great example of an entrepreneurial success story is Airbnb. ?Founded in 2008 by Brian Chesky, Joe Gebbia, and Nathan Blecharczyk, the idea emerged when the founders rented out air mattresses in their apartment during a conference in San Francisco. ?Recognising a gap in the market for affordable accommodation, they created a platform that allows people to rent out their homes or spare rooms to travellers.

They started small but quickly scaled by leveraging technology to connect hosts and guests. ?They disrupted the traditional hospitality industry, providing unique travel experiences and helping people monetise their extra space. ?Today, Airbnb are a global brand valued in the billions, showcasing how a simple idea can grow into a successful business with the right execution and market understanding.

Management – The Difference (or is it)?

Traditional business management often felt like bureaucratic top down thinking in large global companies as well as the public sector.? While it may still be the case in many instances, modern management think is much closer to entrepreneurship than people realise.? New products and services brought out by such institutions is much more technology driven, even at the expanse of traditional jobs and work practices.? For senior management this approach is driven by a lot of uncertainty and risk yet at the same time becoming more innovative.

Unilever, is an example of innovative general management in a multinational company, particularly through their Sustainable Living Plan. Unilever's management has integrated sustainability into its core business strategy, focusing on reducing its environmental footprint while increasing social impact.

Unilever's key innovations include;

·????? Sustainable Product Development:? Developing products that minimises waste and uses sustainable materials. ?For example, their "Love Beauty and Planet" brand emphasises eco-friendly ingredients and recyclable packaging.

·????? Local Adaptation.? Unilever’s management encourages local teams to adapt products to meet regional needs and preferences, fostering innovation that resonates with diverse markets. ?This approach has led to products like smaller-sized packaging in markets with lower purchasing power.

·????? Collaboration with Startups:? They have established initiatives like the Unilever Foundry, which connects the company with startups and entrepreneurs. ?This collaboration fosters innovation by leveraging new technologies and ideas.

·????? Employee Empowerment: The company promotes a culture of innovation by empowering employees at all levels to contribute ideas. ?This inclusive approach helps harness diverse perspectives and drives creative solutions.

·????? Data-Driven Decision Making: They use advanced analytics to understand consumer behaviour and preferences, enabling agile responses to market trends and driving innovation in marketing and product offerings.

Through these strategies, Unilever exemplifies how innovative thinking in general management can lead to sustainable growth and competitive advantage in a multinational context.

?A Start Up: The Foundation

An entrepreneurial idea is a concept or proposition that identifies a potential business opportunity. ?It typically addresses a specific problem, fulfils a need, or leverages a trend in the market. ?This idea can manifest as a new product, service, or process aimed at creating value for customers and generating profit for the business.

Key characteristics of an entrepreneurial idea include:

·????? Innovation: Something new or improves upon existing solutions.

·????? Market-Driven: ?An understanding of target customers and market demands.

·????? Feasible: ?A practical and achievable idea within the entrepreneur's resources and capabilities.

·????? Scalable: ?The potential for growth and expansion in the market.

Overall, a successful entrepreneurial idea is one that resonates with consumers and can be developed into a viable business model.

A good example is a meal kit delivery service by Blue Apron that provides pre-portioned ingredients and recipes for customers to cook healthy meals at home.

Founded in 2012, the company delivers fresh ingredients and chef-designed recipes directly to customers’ doors. ?The idea originated from the increasing demand for convenient, home-cooked meals as more people sought healthy eating options but lacked the time or skills to shop for and prepare meals.

Key elements of their offering includes;

• Convenience: ?A solution for busy individuals or families who want to cook at home without the hassle of meal planning or grocery shopping.
• Variety: ?A rotating menu of recipes, catering to various dietary preferences (e.g., vegetarian, low-carb).
• Sustainability: ?They source ingredients from sustainable farms reducing food waste through precise portioning.

This business idea has successfully tapped into the trend of home cooking and healthy eating, resulting in significant growth and a loyal customer base.

Management Thinking in A Global Business

Senior Management has to determine what the business is about to grow and attract customers, just like entrepreneurs in start-ups do

Maersk, one of the largest shipping and logistics companies in the world, has management principles that significantly define its identity and operations. ?Here are key aspects of how management at Maersk shapes the company:

·????? Sustainability:? Maersk has made sustainability a core part of its strategy. ?The management is committed to achieving net-zero emissions by 2050 and actively invests in green technologies, such as biofuels and electric vessels. ?This focus on sustainability defines Maersk's brand as an environmentally responsible leader in the shipping industry.

·????? Customer-Centric Services:? The management emphasises understanding customer needs by providing tailored solutions. ?By adopting a customer-first mindset, Maersk enhances its service offerings, making logistics simpler and more efficient for clients. ?This approach reinforces their identity as a reliable partner in global trade.

·????? Digital Transformation:? Management prioritises digital innovation to streamline operations and improve transparency. ?Initiatives like the Maersk Flow platform and blockchain technology in supply chain management demonstrate their commitment to modernisation, positioning Maersk as a tech-savvy industry leader.

·????? Operational Excellence: ?With a strong focus on efficiency and reliability, Maersk’s implements best practices in logistics and supply chain management. ?Their emphasis on operational excellence helps maintain high service standards and fosters customer loyalty.

·????? Global Reach with Local Expertise:? The company balances its global presence with local insights. ?By empowering regional teams to make decisions that reflect local market conditions, they ensure adaptability and responsiveness, defining the company as both a global player and a local expert.

Through these management principles, Maersk defines itself as a leader in the shipping industry, known for its commitment to sustainability, customer service, innovation, and operational excellence.

Maersk is an example of entrepreneurial thinking when understanding what large companies are about.

Proof of Concept: ?Learning Lessons

Entrepreneurs learn many lessons based on a multitude of factors (including their own thinking based on their specific skillset).

·????? Hands-On Experience: ?Engaging directly in the business allows entrepreneurs to understand operations, customer needs, and market dynamics. ?Learning by doing is often one of the most effective ways to gain practical knowledge.

·????? Trial and Error: ?Failure is a common part of entrepreneurship. ?Each setback offers valuable lessons that can inform future decisions. Analysing what went wrong helps entrepreneurs refine their strategies.

·????? Networking: ?Connecting with other entrepreneurs, industry experts, and mentors provides opportunities for knowledge exchange. Networking can lead to valuable advice, partnerships, and insights into best practices.

·????? Formal Education: ?Many entrepreneurs pursue business courses, workshops, or online learning to gain theoretical knowledge in areas like marketing, finance, and management.

·????? Market Research: ?Conducting surveys, interviews, and focus groups helps entrepreneurs understand customer preferences and market trends. ?This research informs product development and business strategies.

·????? Feedback and Mentorship: ?Seeking feedback from customers, peers, and mentors helps entrepreneurs identify strengths and weaknesses in their business approach. ?Mentorship can provide guidance and support based on experience.

·????? Reading and Continuous Learning: ?Reading books, articles, and case studies helps entrepreneurs to stay informed about industry trends, successful strategies, and innovations.

By combining these approaches, entrepreneurs can continuously develop their skills and adapt their businesses to changing market conditions.

A great example of an entrepreneur who exemplifies continuous learning is Sara Blakely, the founder of Spanx.

Blakely started her career selling fax machines door-to-door, which taught her valuable sales skills and resilience.

After identifying a gap in the market for comfortable, effective shapewear, she used her own savings to develop the first Spanx product. ?Blakely learnt about manufacturing and retail through hands-on experience, conducting extensive research and testing various fabrics and designs.

Sara Blakely's journey demonstrates how an entrepreneur can learn from various experiences, embrace feedback, and continually adapt to achieve success.

Management Experiences – Training

Experiences are often gained through, not only experience but by training programmes too.

Unlike traditional businesses military personnel spend most of their time learning and the smallest amount put into practice.? This deep learning is highly structured and disciplined yet innovative through modern technological solutions in highly stressful environments.? This is the most critical aspect.? Get the system right can protect the whole team.? Retired military personnel often make excellent managers and entrepreneurs.

Military management and senior leadership employ various techniques to learn how objectives are achieved, focusing on efficiency, adaptability, and leadership development. ?Here are some of the key techniques:

·????? After-Action Reviews (AARs):? AARs are structured debriefs conducted after missions or exercises to analyse what happened, why it happened, and how it can be improved. ?This reflective practice helps leaders understand successes and failures and fosters a culture of continuous improvement.

·????? Simulations and Wargaming:? The military uses simulations and wargaming to model scenarios and test strategies in a controlled environment. ?These exercises help leaders learn decision-making processes, anticipate challenges, and develop contingency plans.

·????? Mentorship Programs:? Senior leaders often engage in mentorship, guiding junior officers through their development. ?This technique facilitates knowledge transfer and helps emerging leaders understand effective strategies and practices.

·????? Leadership Development Programs:? The military invests in structured leadership training programs that emphasise problem-solving, critical thinking, and team dynamics. ?These programs prepare leaders to navigate complex situations and understand the nuances of mission execution.

·????? Cross-Functional Teams:? By forming cross-functional teams for various operations, military leaders gain insights from different specialties and perspectives. ?This collaboration enhances understanding of how different functions work together to achieve common goals.

·????? Feedback Loops:? Continuous feedback mechanisms, including performance evaluations and peer reviews, help leaders learn from their experiences and those of their subordinates, fostering an environment of accountability and growth.

·????? Field Exercises and Training:? Regular field exercises simulate real-world conditions, allowing leaders to practice and refine their strategies and tactics. ?These hands-on experiences are crucial for understanding the dynamics of operational success.

·????? Doctrine and Standard Operating Procedures (SOPs):? The military relies on established doctrines and SOPs to standardise operations and ensure consistency. ?Leaders learn from these frameworks and adapt them to specific situations, enhancing operational effectiveness.

·????? Case Studies and Historical Analysis:? Analysing historical military operations provides valuable lessons on strategy, leadership, and decision-making. ?Leaders study past conflicts to understand successes and failures, applying these lessons to current challenges.

·????? Networking and Collaboration:? Engaging with other military branches and international allies helps leaders share best practices and learn from diverse experiences. ?Joint exercises and collaborations foster a broader understanding of operational strategies.

Through these techniques, military senior leadership effectively learns how to achieve objectives, adapt strategies, and enhance overall operational performance.

Continuous Improvements

Entrepreneurs experiment in various ways to validate their ideas, refine their products, and understand their markets. ?Here are some common methods:

·????? Minimum Viable Product (MVP): ?Entrepreneurs create a simplified version of their product to test key features and gather feedback. ?This allows them to learn what works and what doesn’t before fully launching.

·????? Pilot Programs: ?Running a small-scale version of their business or service helps entrepreneurs assess feasibility and effectiveness. ?This could involve testing in a specific location or with a limited audience.

·????? A/B Testing: ?Entrepreneurs often use A/B testing for marketing strategies, website designs, or product features. ?By comparing two variations, they can determine which performs better based on user engagement or conversion rates.

·????? Customer Feedback: ?Actively seeking feedback from early adopters helps entrepreneurs understand customer needs and preferences. This can be done through surveys, interviews, or focus groups.

·????? Iterative Development: ?Entrepreneurs continuously refine their products based on user feedback and testing results. ?This involves making incremental changes and assessing their impact.

·????? Experimentation with Pricing: ?Testing different pricing models (e.g., subscription vs one-time purchase) can reveal what customers are willing to pay and help optimise revenue.

·????? Marketing Experiments: ?Trying out various marketing channels (social media, email, ads) and messages allows entrepreneurs to identify the most effective ways to reach their target audience.

·????? Partnership Trials: ?Collaborating with other businesses on limited-time offers or joint ventures can provide insights into new markets or customer segments.

By embracing experimentation, entrepreneurs can make informed decisions, reduce risks, and increase the chances of their venture’s success.

An example of continually experimenting comes from Dropbox.? How did they do this?

·????? Demo Video: ?Instead of building a fully functional product right away, the founders created a simple demo video that explained how Dropbox would work. ?This video showcased the product's features and benefits in a clear, engaging way.

·????? Landing Page: ?They set up a landing page where visitors could sign up for early access. ?This page included a call to action for people to join a waitlist, generating excitement and curiosity.

·????? User Feedback: ??As people signed up, they gathered feedback from early users to refine the product based on real user experiences and needs.

·????? Referral Program: ?Once the product was live, Dropbox implemented a referral program that incentivised users to invite friends. ?Users received extra storage for each successful referral, which led to rapid growth and a viral effect.

Outcome

The demo video attracted over 75,000 sign-ups within a day, validating the demand for the product before it was fully launched.

The referral program contributed to a significant increase in users, helping Dropbox grow from 100,000 users to over 4 million in just 15 months.

This experiment demonstrated how effective marketing and user feedback can validate a business idea and drive user acquisition, setting the foundation for Dropbox’s success.

Adopting Continual Improvements

Multinationals are having to continue adapting so as to retain their market share.? High profile organisations are always developing new products and services.

An example from senior management practices from one of the world’s biggest companies that employs continual experimental management techniques is Google.

Key aspects of Google’s Approach:

·????? Data-Driven Decision Making:? Google uses extensive data analysis to inform decisions across its products and services. ?This involves A/B testing, where different versions of a product are tested with users to determine which performs better, allowing for informed iterative improvements.

·????? "20% Time" Philosophy:? Google has encouraged employees to spend 20% of their work time on personal projects that can benefit the company. ?This fosters innovation and experimentation, leading to successful products like Gmail and AdSense.

·????? Agile Development:? Google employs agile methodologies in software development, allowing teams to work in iterative cycles. ?This approach promotes regular testing, feedback, and adjustment, ensuring that products can evolve quickly based on user input.

·????? User Experience Research:? The company invests heavily in user experience (UX) research, conducting experiments and usability tests to refine its interfaces and ensure that products meet user needs effectively.

·????? Pilot Programs:? Google often launches pilot programs to test new features or services in a limited capacity before a full rollout. ?This allows the organisation to gather data and user feedback, making adjustments as necessary.

·????? Culture of Feedback:? Google fosters an open culture where feedback is encouraged from all levels. ?This practice not only enhances employee engagement but also helps refine processes and products based on collective input.

By integrating continual experimental management techniques, Google maintains its innovative edge, adapting to market changes and user needs while consistently improving its offerings.

Conclusion

Startups and global business are not that much different, the big corporates started with a visionary entrepreneur after all.? Entrepreneurs’ (especially start-ups) live with a lot of uncertainty and big challenges in deciding what their vision is and how to determine what they do as well as growing through constantly learning whilst persisting with refining what they have to help them adapt in a fast passed global environment.

Traditional management is more structured, however, the biggest of the biggest have to constantly innovate (whist retaining some level of structured institutional thinking).? Modern management is more akin to entrepreneurial uncertainty than many people think.

The next article looks at establishing startups as they set off along the highway and begin to grow by letting go of the training wheels and moving towards the next destination seeking revenue to grow further.