HOW DO ENTREPRENEURS DECIDE WHAT TO DO EVERY DAY?
I’ve met with countless entrepreneurs in my career, and I find myself continuously enamored by how they address the question of what they do every day when they wake up. There are a myriad of urgent tasks, and it’s impossible to tackle them all.
Entrepreneurial endeavors are marked by significant opportunity and equally significant risk. At Originate, we’ve learned that once you’ve identified the opportunity, you must then focus on mitigating the risk in order to execute well.
It can be helpful to bucket these risks, and we use four categories to do so: Market, Business, Product, and Technical.
It’s not only critical to successfully identify a large market opportunity, but to also have an inherent advantage in that market. With startups, this typically comes from an individual with a deep understanding of the market supported by a vast network of connections.
An established company, on the other hand, has the ability to leverage existing relationships to gain an advantage over startups that would need to invest substantial capital into customer acquisition. The current battle for mobile payments between incumbents (Apple, Chase, MasterCard) and is a great example of this.
The key here is to have insight into the market trends. Is regulation (or deregulation) changing the industry landscape? Are international markets opening up? Are incumbents losing their innovation advantage? A great vision can express an insightful view on the future of the market.
The leadership of the business will drive all important decision-making. If ineffective, everything falls apart. This is particularly acute in recruiting.
Another key risk here is funding. This is a factor in both startups and established companies. Capital injection can come through a VC with funding from their LPs, management pulling from profits, or customers with money from their pockets.
Every venture needs a clear path to funding. The business model and milestones need to be designed to mitigate this risk. If you’re looking to attract a VC, you need to recognize their expectation for 10x returns within 4–5 years. If you aren’t designing for rapid, exponential growth, raising VC funding will prove challenging.
Product risk pairs with the aforementioned risks, but focuses on the end-user. Have you identified a key emotion or pain point that will trigger a need for your solution?
Originate leverages clickable prototyping to mitigate this risk. Testing via prototyping greatly increases the likelihood of designing a product version that delivers something of real value to the user.
And by the way, a clickable prototype can also help to mitigate business risk. Nothing attracts stakeholders more than the ability to touch and feel the product early on.