Everything happens on a day when, out of nowhere, a great idea comes to mind and that’s where it all begins. Entrepreneurship has become an activity that is replicated more and more frequently, but there are very few who manage to stay afloat and consolidate a successful business.
According to the Global Entrepreneurship Report carried out by GEM, the companies that remain are those that in a certain way have collaborated with a disruptive business model.
But how do they do it?
In today’s market the turns of companies can be very similar, an example are the corner stores and the OXXO. Broadly speaking, these are two business models that would seem to be the same, however they have differences in the service and in the type of products they offer.
For a company to last, it must “break the market”, that is, do something totally new or improve the user/customer experience based on something that already exists.
From the combination of traditional things with unusual ideas, very crazy ideas can result. Reid Hoffman, creator of LinkedIn, mentions in one of his podcasts that on your way to entrepreneurship you will hear a chorus that tells you “no” all the time, since there will always be someone who will not be convinced that your ideas will work, so you will be the one who works to prove them wrong they are.
From zero to entrepreneur
Once you have an idea of what you want to do and developed your business model, you already have half of the advanced game, the other half is based on three things: be consistent, try and fail.
Yes, I said fail. Go ahead and find out why
No one is born knowing exactly how to start a business, and starting from scratch sounds like a challenge. What makes the difference is using the right method to fail as quickly as possible, learn and modify. You see, it’s a very functional cycle because you stay in continuous improvement.
This method is called: Minimum Viable Product, and is used by many entrepreneurs around the world. Go-Globe, a digital development company, estimates that a company that uses this method to grow does so 20 times faster than the others.
This is the secret of big business:
We all have a misconception about what it should cost to launch a product or service. We think that to position ourselves as a “serious” company we require an initial investment of thousands or millions of pesos, but we are rarely aware of the risks that this implies, since everything invested (time and money) could be lost in a matter of months. I have to warn you that this method is the opposite of what you might think about entrepreneurship.
Let’s decipher this method:
I studied International Business, part of my career focuses on entrepreneurship and in some of my first internships I had the opportunity to work with a young couple who sought to develop a traditional and quite competitive business: a cafeteria.
It was the first time I helped someone develop their company, I had not known this method at the time, but analyzing the situation in retrospect, I realized that we inadvertently used it.
Here’s what I learned:
The cafeteria, which by the way is called “Caprichito Mío” (in case you ever like to visit it), began to create drinks different from those of others that were at the same level, but the costs of the inputs were quite expensive, the ideal was to buy the minimum possible of these and put the products to the test with customers.
Lesson #1: Costs
If your product is so sophisticated that it needs thousands or millions of pesos to be created and you are not sure that it will work, it is best to create a version as austere as possible, this will help you test it at a minimum cost. The feedback from the diners was immediate, in such a way that the product could be improved little by little until reaching the ideal recipe, which allowed to have an estimated amount for the investment while the returns were almost assured.
Lesson #2: Here comes the part of failing fast…
Well, you will get feedback from your first customers. At this stage all the comments are very valuable, especially the negative ones that are the ones that will help you improve your product until it becomes one that the public expects. The time and money you will save with a Minimum Viable Product will be much less than what you would lose by introducing a product to the market without knowing if it was what the public wanted or needed. The cafeteria took a few months to find its break-even point, then the profits they made helped them make improvements to their facilities, service and products. Little by little, Caprichito mío has been acquiring professional machinery for its cafeteria and the service is getting better.
Lesson #3: The first few months of your product are critical
You’ll need to work very hard to stay afloat for a while, as your company slowly begins to grow. The cafeteria has been maintained for three years, according to INEGI, the turning point of SMEs is five years, so they should begin to exploit, in this case, their star products and standardize their processes to take the next step: a new branch.
Lesson #4: YouWere Like Honey to Bees
Once you apply this method and make the necessary improvements to make your product work, you will get investors faster than you imagine.
So you know, to undertake there is no exact formula, but there is something that will help you lose as little time as possible money and effort: do not be afraid to lose, it is usually the first step to start earning.