How To Build in an Uncertain Market

When I started building my first startup, my father told me he believed in me. He did not fret over the fact that I wasn't focusing on my law degree and not pursuing the path to SAN. He told me that it would be difficult but that if anyone could do it, I could. This has made all the difference.

There is a certain confidence that comes from knowing that those whom you love believe in your vision. It is of course not a prerequisite to build. However, if you can get the approval of the ones you love, do.

In today's newsletter, I will discuss some key strategies you can implement while building in an uncertain market.

If you missed last week's newsletter, you can catch up here.

The biggest problem every startup founder will face is uncertainty. Nothing, absolutely nothing is certain. Your product is not certain to keep being loved, your target market is not certain to keep being your target, and your MOAT strategy may not always keep your competitors at bay. But what is certain is that founders with the resolve to succeed will keep building and in some cases succeed against very long odds.

If you are reading this consider yourself lucky already. You are likely amongst the 3% who actually believe they can do big things and take action towards this. Startups have a high failure rate and this makes it all the more uncertain.

According to Harvard Business Review,

"Most start-ups don’t succeed: More?than two-thirds?of them never deliver a positive return to investors."

The key reasons for failure have been cited as including;

• Inefficient Teams.
• Poor market research.
• Inefficient building process.
• Underestimating the competition.
• Poor work-life balance.

The uncertainty can lead to both success and failure depending on what you do with it. Uncertainty keeps a founder on his/her toes. He or she will think constantly about the product, the customer problems, new opportunities for growth and solution process improvement. Building can feel like a lot but it is not worth it if you can't deal with the inevitable uncertainty.

Here are some pro tips on managing uncertainty as a founder;

1, Ask Hard Questions

I read Peter Thiel's "Zero to One" in 2022. It was the most profound book I have read so far on startups and what differentiates winners from losers. He spoke of the contrarian question in the early chapters, a truth which you held that no one else knew or could fathom. As a founder, you need to know a truth no one else can comprehend. The pathway to determining this truth is by asking hard questions.

The questions you ask yourself have to extend beyond your industry and current market. When Steve Jobs and others built Apple iPhone, there were other mobile phones in the market at the time. However, by anticipating the market by asking hard questions, they figured out people would prefer more convenient mobile phone devices. They also marketed the iPhone as the device associated with thinking differently, effectively giving it a brand identity that people would identify with decades after the first iPhone was released.

If you want to deal with uncertainty effectively as a founder, ask yourself hard questions. Here are some examples of hard questions to ask yourself today;

• How will you maintain a competitive advantage over the next 10 years?
• What can your customers want that you don't already sell them? See Google's drive storage as an example of why this question is so important.
• How can you offer your current products and services at scale for half their current cost?

2, Maintain a strict work-life balance

This seems like a no-brainer and yet many founders struggle with it. Being a lawyer to startups across Africa sometimes means listening to them talk about their problems, personal and business-related. So many founders in their 20s don't know if they will settle down or if their relationship would last, they prioritize their products so much that they barely have time for anything else. The result is fatigue and repression. When you are constantly working without doing something else other than work. This means two things;

1. Your entire life is work and therefore more emotionally susceptible to work failures and;
2. You are likely not getting enough sleep because you are so obsessed with work.

When you lack work-life balance, you will likely hinge your entire life on work. Work has its good days and bad days, if all you have is work, your life will fluctuate accordingly; from high to low sometimes on a weekly basis. This can lead to frustration.

Breathe. You must learn that there is no end to work. Approach building your startup as a marathon not as a sprint. Live your life as well as pursue your dreams. Take a break from time to time and get back in the game

3, Prioritize rest

Rest is key to success. Without getting sufficient rest, you may not even live long enough to enjoy the success you have already built, nor have enough of your body functioning at its peak to do your best.

According to Very Well Health,

"Chronic sleep deprivation, can also cause you to develop impaired memory, oversensitivity to physical pain,?hallucinations, altered blood pressure, and more."

A well-rested founder is an effective founder. When you have written that last line of code for the day, don't be tempted to write more. Shut down and get some rest. Tomorrow is a new day, an opportunity to go again.

4, Create a MOAT strategy

Every startup will face uncertainty. As certain as it is in this world that the sun will rise and set, that is how certain it is you will face uncertainty as a founder. This applies irrespective of your stage. To surmount the daily uncertainties it is useful to create a MOAT strategy.

A MOAT strategy is a process adopted by a startup to increase its efficiency, profitability and overall competitive advantage.

A MOAT strategy is usually documented and covers several areas of the startup. The core idea is to secure the startup's value proposition against other players in the market who may attempt to take away from their existing market share. An example of a MOAT strategy is Apple's brand and switching costs.

A customer who uses Apple will likely never switch to a Google pixel, and never because Apple is objectively superior but because they have been convinced through brand associations that Apple is.

On high switching costs, corporations who attempt changing software providers like Microsoft Teams can be costly, particularly if the software is integrated into the business’s key operating practices. IT departments of these corporations often resist change due to the difficulties of learning new software, customizing it, and training users. Training new users also means lost productivity which overall makes the switching cost of using a new software very high.

For more insight into MOAT strategy for startups, catch up on last month's newsletter here.

5, Have a building compass

Simon Sinek's "Start with Why" is perhaps one of the most insightful books on the foundation of business success. I strongly recommend you read that book. Every startup needs what I call a "Building compass", the core reason behind why the founders started building the startup in the first place. This core reason stays even when things are not working. This is why it is so important to have a building compass.

Uncertainty is a constant for startups and having a runway may not be enough to keep you and your team motivated to keep building. Even hitting key milestones may not be enough. Write down why you started building your startup and develop your core values from there. Then teach everyone on your team these core values and allow them to guide you and your team going forward.

A founder who started building a startup as a result of a personal loss that could have been prevented is more likely to stay resilient than a founder who stumbled upon a good idea that happened to have a willing investor.

Conclusion

You cannot create MOATS so strong you cease to have uncertainty. Life by its very nature is uncertain. Stop fretting over what would happen next and focus on doing what you can in the present. Think about the future and plan towards it, but don't live in the future.

Remember that you are the one you have always been waiting for.

If anyone can build that big idea, you can.

I am rooting for you.

Keep building.

About the Author

Osita James?is a technology entrepreneur building?Surepayy, an innovative digital escrow service facilitating scam-proof payments for social media vendors and shoppers in Africa. Surepayy's most innovative product enabling safe online shopping in Africa is a physical online order verification service called?Sureagent. He is also a partner in?BlackcrestLP, a start-up advisory law firm that has successfully advised start-ups across Africa in investment deals worth over $ 1 million. He is studying for an MSc in Innovation Management and Entrepreneurship at the Nottingham Trent Business School and writes love poetry in his free time.

I support African founders with legal and start-up operations advice. You can reach me?here?for enquiries.