Last week I was interviewed for a TV show that features young entrepreneurs. The dialog went like this:
Journalist: What are the three most important elements that make a business successful?
Me (after thinking about it for 20 seconds): A unique product, the right people, a clear strategy and the right attitude.
Journalist: That’s four elements, not three.
Me: I’m an entrepreneur. You didn’t expect me to follow the rules, did you?
Then I went on to explain why those are the four most important elements that make a business successful.
A Unique Product
Ask yourself this question: why would people buy from you? If you have a truly unique product, people would buy from you because you’re the only company selling it. Selling a product or service that in a market where there are hundreds of companies offering pretty much the same is an uphill battle. It’s hard to differentiate, you become a commodity and you end up competing on price, which erodes your profit margin.
If you are competing in a crowded market, how can you create a new market that you own? If you want some ideas, I wrote a post on this topic called Why Being Different Is More Important than Being Better.
The Right People
People are the most important piece of the puzzle. The right people can build a multimillion dollar company; the wrong people can sink the boat. Every person I work with is a rockstar at what they do. I’m not the best at hiring yet, but I’ve gotten much better at firing people who are not performing. One bad apple will rot the rest of the apples. I’ve seen it happen several times.
I don’t feel job interviews are effective. Some people interview really well but they’re not good at doing the actual work, and some people aren’t great interviewers but are A-players once they’re hired. Before I start interviewing people I make sure I have a clear job description for the job. This is critical for the new hire to know what’s expected of him or her. When we hire, we look for three things: skills (the ability to do the job), attitude (the willingness to go the extra mile) and cultural fit (basically, do we enjoy hanging out with this person?).
A Clear Strategy
I’m always surprised to see how many small businesses don’t really have a plan. And no, a “to do” list isn’t a plan. A real plan starts with where you want to be in 5-10 years, what route will get you there and what action steps you’ll be taking in the next few months to move you in the right direction.
I wrote an article on this topic that was a big hit: The Biggest Lie Entrepreneurs Like to Believe.
The Right Attitude
Being an entrepreneur is incredibly hard. It requires a lot of mental strength that most people don’t have. It’s very difficult to keep working hard when day after day things aren’t working out the way you expect them. The problem is that when we read about successful startups it seems like they came out of nowhere and they were an overnight success, so we start self-doubting ourselves when it isn’t that “easy” for us. But the reality is that “overnight successes” take years of hard work and dedication. We don’t see all that. We only read about them when they get acquired for millions.
Being an entrepreneur also requires you to do a lot of things that make you uncomfortable. If you hate selling, that’s too bad because you’ll have to do a lot of selling. You’ll also have to speak in public, know how to read financial statements, negotiate payment terms with your vendors and even fire people you really like on a personal level because they’re not great at their jobs.
The good news is that the brain is a muscle. If you hate selling and do it anyway, it will become easier and easier. When we step outside our comfort zone it’s like we’re stretching a rubber band: when we release it, it never goes back to the original size. It grows a little. The same is true for facing adversity. The first time you lose an important deal or a key employee quits you feel it’s the end of the world. But after it happens a few times you’ll remember that every time this happened in the past you pushed through and took care of business. And, this will give you much more confidence to deal with the situation at hand.
Have a great week!
