If you combine all the classes, conversations, books, cases, meetings, lectures, school immersions, and online research I've done, here are the key takeaways I've accumulated thus far about characteristics of successful new businesses. It's not to say that one can't be successful if he or she doesn't incorporate these qualities, but the overarching advice is that if you're a first timer (without much experience) looking to kick things off, "You should shoot for the moon. Even if you fail, you'll at least land among the stars."
1) MARKET SIZE: The idea should be HUGE - we're talking $ billions or $ several hundred million in market size (not a couple of $ million).
2) MANAGEMENT TEAM: The team needs to be top notch - this includes having a CEO with experience and founders with different skill sets (engineers can be more valuable than MBAs).
3) SCALABILITY: The idea needs to able to scale quickly in revenues, but proportionally with costs.
4) SELL PAIN KILLERS, NOT VITAMINS: This means that customers pay (lots of $ and quickly) for pain killers that help them cure a problem. It is much more difficult to get them to pay for a vitamin to help them just do something better.
5) SHORT SALES CYCLE: Your product should be able to sell quickly to customers - unless one sale means hundreds of thousands of dollars.
6) SIMPLICITY: If you can't describe the idea to someone in less than 10 seconds or need a major shift in customer behavior, you're going to have a difficult time...
*NEW 7)ONLINE BUSINESSES SHOULD FOLLOW PAYMENT RULES OF OFFLINE BUSINESS: Not sure how else to say this, but it's much easier to charge users that are accustomed to paying for something offline and bringing them online, then to start charging them for something they never paid for before.
I will keep updating this list as time goes on, but I welcome any additions you may have.
Lastly, and this is absolutely true, IDEAS ARE SIMPLE - EXECUTION IS DIFFICULT! From my experience, this could not be more correct. Having worked on an idea for approximately one full year, the shear complexity of taking a simple concept and delivering it to a customer is enormous. However, the sweet is never as sweet without the sour!
Should your startup sell pain killers or vitamins?
Where is the "beaten path" for entrepreneurs?
Alright. Here's the deal. I've done well for myself until now, having followed the beaten path to the Mecca of a young professional's choice for graduate education (Harvard Business School). After graduating from Carnegie Mellon University with honors, I worked at Deloitte Consulting in New York City for 3 years. The experience was fantastic, but looking back, it was a bit less climatic than I had expected. There's just something about working 60-100 hr weeks on a project who's success has no direct impact on you or your career and you don't want to become a partner (we learned about this at HBS, it's called a bad incentive system). Life becomes too bland and you just stop caring... So I came to Harvard Business School to change careers and become what is called a serial entrepreneur - which by definition is a fantastic choice since it means you've started more than 1 or 2 companies and probably had to be successful along the way to keep from having to get another job.
The problem was (or is) that after 1.5 years of studying here and trying to launch a scholarship search business, I realized I am a little late to the game. It just seems that the skill sets that I learned in consulting don't give me a leg up in doing anything in this field (except being CEO of a new company). At the end of the day, experience is what matters in this business...
Therefore, I'm starting this blog with the intent of documenting everything that I learn along this journey - starting with my first learning: you need to blog. You also need to tweet, facebook, linkin, etc. Bascially, get yourself out there (professionally)! And please, untag any drunk photos.
