Entrepreneurial Mindset
It is true that every business starts with an idea. However, the most important prerequisite that a person seeking success in the business world should gain way before even considering to open his or her own business is the entrepreneurial mindset. An idea precedes action in the same way that a plan precedes a decision (Graham, 2005a). Thus, in order to figuratively make a thought become flesh, one should revise his or her beliefs and convictions and ensure that they have overcome or in the process of actively overcoming self-limitations. As a result, future businessmen and businesswomen would be able to get a better grasp of what constitutes their mindset and whether their mindset is indeed entrepreneurial.
Now, not much is known about two friends’ – Chris and Pat – education and professional background. In the case description, it is stated that Chris is a liberal arts student whereas we do not know exactly what Pat’s major is. Yet, the likelihood of developing an entrepreneurial mindset is not precisely tied to a person’s academic credentials and work experience even though there might be a certain correlation.
When stripped down to the very basics, the entrepreneurial state of mind is a mixture of common sense and a proactive approach to living – not only to building a business. Both Chris and Pat would benefit greatly from heightening their awareness of their personal skills and qualities – both outstanding abilities and areas of growth.
Chris and Pat could assess their current values and vision and check whether they are aligned with what is called the entrepreneurial mindset. First, having this type of mindset requires having a rather narrow vision that ensures total commitment to a cause. The goal that Chris and Pat set so far is to develop a broad student network that would help people meet each other no matter the distance.
Chris describes himself as a professional networker, which means that he already devotes a certain amount of time to his endeavors in the said field. His experience might be of great use when building a network, and his pre-existing interest will fuel his drive and passion. Pat was the one who saw a good business opportunity in connecting students across the United States, which might mean that he has ‘an eye’ for successful projects. If united, both men can create something innovative and useful together.
Another important to-do for developing the entrepreneurial mindset is putting oneself in challenging situations. It could be beneficial if Chris and Pat would reflect on their past and how they approached problem-solving when an opportunity presented itself. It is possible that they already worked on different smaller-scale projects and gained meaningful insights into the nature of completing tasks of varying complexity and dealing with uncertainty. Further, it is critical that Chris and Pat do research on the subject matter – after all, it has been found that the majority of successful people maintain steady reading habits (Graham, 2005a).
No idea is innovative or outlandish enough not to be tried before – in one form or another. Thus, the men could become familiar with the stories of failures and success to try and learn from others’ mistakes and adopt the best strategies. Lastly, Chris and Pat should be ready to see each problem from different sites and angles and except the existence of various solutions. This realization will help them abandon a bad idea and not care about the sunken ship cost.
Startup Teams
According to Altman (n. d.), the necessary minimum for a tech startup team is two founders, which means that Chris and Pat meet this standard. While startups with only one founder is no rarity, Altman (n. d.) reasons that in the business world, there is not much sense in being a “lone wolf,” especially at the seed stage of a tech venture. The author explains that one founder should be exceptionally good at upholding the vision and developing a product accordingly (Altman, n. d.). The second founder should balance the hard skills of his or her partner by applying such soft skills as communication with end-users.
Now, we know that Chris majors in liberal arts and partakes in networking events regularly, which might mean that he has sufficient social skills to be in charge of gaining feedback and marketing. This means that building the product itself is likely to be delegated to Pat. To make their venture robust, the men should use their friendly bonds to support one another and resolve conflicts and arguments effectively. The worst-case scenario for a startup launched by a group of friends is the atmosphere of relaxation and leniency when it comes to setting deadlines and evaluating results.
Now that a startup has two founders with their roles assigned properly, Chris and Pat should consider recruiting other specialists. In the case description, it is not stated clearly what the desired end-product would be. However, given the nature of their business idea, it is safe to assume that Chris and Pat would like to start an online meetup platform or develop an application.
Thus, their startup team is most likely to need a software developer and a web-designer, preferably someone who specializes in creating user interfaces (UI) and enhancing user experience (UX). At the initial stage, Chris and Pat will be fulfilling a variety of roles: putting together a business strategy, managing co-founders, and marketing the product. Nevertheless, as the startup grows and in case the founders receive sufficient funding, they might want to delegate these tasks – for instance, recruit a marketing specialist.
Chris and Pat should take recruiting new teammates with utmost seriosity – as Altman (n. d.) puts it, “mediocre teams do not build great businesses.” The founders should think through the search process – the key criteria for the candidates, platforms for communication, and interviewing. Altman (n. d.) emphasizes the necessity of a good leader to be both flexible and rigid. In this context, rigidity means adhering to the vision and mission whereas flexibility stands for the ability to change one’s mind in the face of uncertainty.
It is critical that the founders understand that meaningful collaboration is just like a two-way street: while Chris and Pat can and should demand specific skills from candidates, they should also outline how participation will benefit potential teammates. Ideally, they should be looking for good technicians that enjoy what they are doing and who are passionate about the field. At the same time, as Gerber (2009) reasons, a startup cannot rely heavily on the technical side of the work. In his book, the author provides a formula for the perfect new business: 33% entrepreneurship, 33% management, and 33% technical work. Thus, Chris and Pat’s team should unite all the said elements in a reasonable proportion.
Idea Generation & Development
Admittedly, idea generation is the first stage of every business venture. However, according to Graham (2005b), beginners tend to overestimate the importance of coming up with a workable idea. The author argues that some of them depend heavily on the “muse” – they are convinced that whether a brilliant idea comes to them at once or it does not come at all. On top of that, another common myth about idea generation is that navigating the thought process in the right direction is all that it takes to start a business.
Such people tend to separate ideas into two categories – genius and useless, or rather, they become stuck on one idea and do not want to abandon it even if it proves to be not exactly viable. Contrary to that belief, Graham (2005b) reasons, an idea is a tiny first step towards realization and financial prosperity. If a thought – no matter how good – is not backed up by hard work and rational decision, a project is bound to fail.
According to Graham (2005b), Chris and Pat should recognize the power of language when coming up with ideas. Instead of stating “We need to build a social network for students,” they should ask themselves “Can we build a social network for students?” A well-posed question sets a curious mind out on a search for questions whereas statements often limit possibilities. In his article, Graham (2005b) pays attention to the issue of criticism and what is more important, self-criticism. He emphasizes the easiness with each a good idea can be completely debunked by critics.
For instance, in the case of Chris and Pat, if someone asks the founders about their goals, they might as well doubt the validity of their plan. The self-doubt might go as far as making the friends wonder whether they are ever going to be able to compete with the “giants.” After all, students have been using other popular and well-developed social networks such as Facebook, Twitter, Instagram, and Tinder for meetups for many years.
This, however, should not discourage Chris and Pat from pursuing their goals. Instead, when reflected upon, the presence of numerous contenders should lead Chris and Pat to the very nature of a good startup idea – it is reminiscent of what has been done in the past and offers new features at the same time.
Now that the definition of a good startup idea is established, it is imperative to find out how to manage the process of idea generation. The most common method for coming up with new ideas is brainstorming, which might seem somewhat chaotic at first glance but has its rules (“Find and validate your startup business idea,” n. d.). Overall, it is recommended to give the participants of a brainstorming session full freedom of thought but at the same time, make them focus on the topic and document their findings.
For instance, it might be a visual board or a shared Google document. Graham (2005b) states that startup founders need new technologies and good friends in order to stumble across a feasible idea. New technologies will usher them into the world of innovation, and good friends’ opinion will be whether a motivation or a wakeup call.
Creativity, Empathy and Design Thinking
Creativity is not a rare personality trait nor is it innate. When approached properly, it is rather the opposite: creativity can be applied to every aspect of an individual’s life, and everyone can become creative to a certain extent. In her TED talk, Tina Seelig presents what she calls “an innovation engine:” the researcher has dissected the broad concept of creativity down to six basic elements (TEDx Talks, 2012). Seelig seeks to get rid of a narrow vision as to what creativity is and offer simple ways to unlock every person’s creation. Her scheme looks as follows:
- The Inside:
- Attitude. In Chris and Pat’s case, the right attitude for developing creativity may be described as the entrepreneurial mindset that pushes to overcome challenges, look at a problem from different angles, and be solution-oriented.
- Imagination. Imagination is one of the entrepreneur’s most powerful tool as the human brain processes fantasy in the same way it processes reality.
- Knowledge. Seeking for new ideas, Chris and Pat should still base their findings on real-world evidence.
- The Outside:
- Culture. Given that Chris and Pat reside in the United States, it is safe to assume that they are in luck. The United States of America traditionally ranks high as a country with a favorable business climate and a vibrant startup scene.
- Habitat. The case description provides no information about the founders’ actual living conditions. One may only recommend to assess the habitat as to whether it is appropriate for daily creative thinking processes.
- Resources. Idea generation and development as well as going through succeeding stages of a startup require access to knowledge and other people’s expertise (TEDx Talks, 2012).
The scheme elaborated by Seelig helps evaluate the prerequisites for creative thinking. It is critical that Chris and Pat understand that starting a startup is synonymous with unlocking creativity and use both inner and outer sources wisely.
Empathy is a key element of building business since not a single product or service makes sense if it cannot appease its customer. From the case description, it is clear that both founders are students, and the target audience of their end product is also students. This means that Chris and Pat themselves might be typical users and create user personas based on their own experiences with student networking.
However, it would still be better if they expanded the scope of their research and include more people of the appropriate demographic. Chris and Pat could design a simple survey with questions concerning student socialization: for instance, what online platforms students typically use to organize meetups, what they like about these media, and what they do not. The more answers the founders manage to receive, the easier it is going to be to expose common patterns in social network use and user stories.
The entire process of idea generation and user persona creation should be dominated by design thinking. It is an effective methodology based upon a solution-oriented approach toward problem-solving, which typically takes several stages.
Empathizing is the first step whereas defining the problem based on other people’s experience is the second. The stages following the definition of an issue or a challenge include ideation, prototyping, and testing. Now, one might notice that the design thinking process involves ideation – something that the founders have already embarked upon. However, it is essential to point out that ideation after empathizing and definition is characterized by more precision and concentration as opposed to brainstorming with its non-discriminative approach toward ideas.
Testing and Experimenting
As it was mentioned before, it is not exactly clear whether Chris and Pat have a website or an application in mind. For the sake of simplicity, from now on, it is going to be assumed that the founders have settled on developing a social network application. At the stage of testing and experimenting, it is critical that all the teammates work closely together, gain feedback promptly, and response to emerging issues. Web designers and software developers will have different, which are, however, interconnected by the common purpose.
Some of the issues that software developers will have to tackle at this point include geolocation, time zones, integration with other social media, safety, and confidentiality. Just like some other social network applications (example: Tinder), the application by Chris and Pat will need to have a feature enabling a user to filter profiles by location. In the case description, it is stated that the founders would like to help to connect students who might be living far away.
Thus, as opposed to aforementioned Tinder, the application should not have any limitations concerning distance. The next issue associated with covering vast distances via online application is understanding other users’ time zones. Chris and Pat could take inspiration from corporate software such as Slack that adjusts to each user’s local time and warn others not to bother him or her past a specific hour. Further, end-users might find it extremely convenient to log in using their Google+ and Facebook profiles or a phone number. While it might be a great feature to implement, Chris and Pat’s team will need to ensure data safety and confidentiality.
Web designers will need to create an intuitive interface that does not look “busy” or overloaded and which at the same time, has all the important features. Among the primary tasks to complete would be designing a chat window, creating a well-structured profile layout, and creating lists for search criteria and a search result page. Another good idea would be to integrate a map for quick search across the globe.
What would make the application fit in its market niche or on the contrary, distinguishable, is a color scheme. Chris, Pat, and the team could go down the familiar road and choose neutral blue colors akin to those used by Facebook or Twitter or invent something different. However, it is critical that the colors trigger desired associations: for instance, Tinder uses hot pink, which signalizes that it is a dating social network application.
The described stage is a game of trial and error and also the phase around which many startup founders decide to quit due to the unexpected challenges. What might help Chris and Pat greatly is to be sociable and outgoing. As much as developing a product requires undivided attention and hours upon hours of solitary confinement in the office, socializing and sharing the results to date allow for prompt and much-needed feedback.
Once the product is more or less apt for testing, Chris and Pat should consider inviting individuals belonging to their target audience to test the application. Vital thing about letting real people test a product is how unexpected the ways in which they interact with software might be. Thus, it is important not to wait passively for the feedback but observe potential users’ every step when using an application. The founders and the team should take notes and make amendments accordingly if necessary.
Finding Product-Market Fit
Product-market fit is defined by the degree to which a product or a service satisfies customers’ needs. The harsh reality of the business world is that even the greatest team with the most brilliant ideas on paper cannot win if they cannot find a fitting market niche. Altman (n. d.) employs the following logic: if a bad startup meets a great market, the market wins as it does not accept anything unfit for keeping customers satisfied. If a great startup emerges in a bad market, the market does not lose anything, unlike the entrepreneurs. Any product – no matter the quality – has no practical value if it is not appreciated by anyone. The best case scenario is a happy coincidence when a robust startup taps into an appropriate market and its founders succeed in finding the perfect product-market fit.
According to Altman (n. d.), Chris and Pat should start by putting forward a value hypothesis for which they need to ask themselves and the team three questions:
- What are we trying to build?
- Who is desperate for our product?
- How are we going to build it?
It appears that the problem that might emerge in the case of Chris and Pat is the lack of precision in their concept and too broad an audience. As of now, each social network website and application fulfill a particular function or at least market themselves as completing such. For instance, Instagram offers the visual allure of high-quality pictures and the opportunity to take a peek into the lives of your friends, family, and celebrities. Twitter is known for its sharp political commentary and rather specific sense of humor which often give rise to many Internet sensations.
Now, Chris and Pat want to help students connect; however, it is not evident what the end goal of “connection” is. Some ideas that might be viable at this stage include building study groups to help boost academic success. However, the founders mention that they would like to offer a shared platform for students across the country and even across the globe, which partly excludes the possibility of live meetings.
What might be more workable is building an application for student projects and startups where other founders could recruit team members. For this purpose, Chris and Pat could consider integrating the application with LinkedIn so that “employers” and “candidates” could gain access to each others’ academic credentials and information about work experience. After all, to market, seldom and uniqueness matter even if it is not the first attempt at creating a product of the given kind.
Altman (n. d.) warns about premature scaling: the author reasons that finding product-market fit should precede spending vast amounts of money on development and production. Keeping this in mind, it seems that Chris and Pat might want to start small – test their product within their respective universities or their city. Even though the data on user interest might not be exactly inferential, the process of marketing and gaining feedback might be extremely insightful.
Altman (n. d.) reasons that there is not much ambiguity when it comes to good and bad product-market fit: one cannot observe failing sales and user disinterest and conclude that the startup is staying afloat and making progress. Product-market fit is tangible since the market and customers are extremely responsive and do not hesitate to show appreciation for something they need.
Building Business Models
There are many business models that Chris and Pat might like to entertain while ensuring the validity of their plan. The product/ service model, otherwise known as hook & bait, is the classic approach. By implementing the said model, Chris and Pat would make an offer to a potential client in which they give him or her access to a free trial part of their product. In the case of a social network application, the “hook” part would be letting customers use the free version with limited functions. For instance, such a release could only allow for searching within a fixed radius or one country as opposed to the full version which would include browsing across the globe.
It is critical that the “hook” version is not a half-hearted, underfunded attempt and a pale shadow of what a fully developed application would be. These days, customers are increasingly demanding and have a short attention span. In case they run into bugs and inconsistencies while interacting with the trial version, it might deter them from buying the product. To make this business model robust, Chris and Pat should do a lot of marketing, understand their target audience, and make sure that the free version is flawless.
The ad-based model is trendy among both developers and users. Within the said model, the product is free whereas the startup team relies on the revenue from advertisement. For all its advantages, the ad-based model might not be exactly appropriate for the infancy stage of building a startup. When a customer base is in the process of accumulation, it is not precisely reasonable to depend on the viewership of the placed advertisement in an app.
However, once Chris and Pat’s startup enters the growth stage, they might want to entertain this option. It is imperative that the web designer in their team knows how to implement ads without making the interface overloaded or annoying. Customers might understand developers’ interests in generating revenue – as long as their user experience is not spoilt by aggressive advertisement.
All in all, launching a startup is an incredibly stressful, time-consuming and at the same time, exciting and promising opportunity. In the world where more and more people desire to be their own bosses, starting a business might be a much-needed reality check. Chris and Pat might get a chance to explore their aptitudes, push their limits, and be the change that the market might be waiting for.
To sum up, a startup will require a great deal of inner freedom and unbound creativity as well as steadfast determination and discipline. While Chris and Pat should rely on the previous experiences and research their competitors, it is important to capitalize on uniqueness and innovation. Such schemes as design thinking and business models that have proven to be working for many years will be of great help on the path to glory and prosperity.
References
Altman, S. (n.d.). Startup playbook. Web.
Find and validate your startup business idea. (n. d.). Web.
Gerber, M. E. (2009). The e-myth revisited: Why most small businesses don’t work and what to do about it. New York City, NY: Harper Collins.
Graham, P. (2005a). How to start a startup. Web.
Graham, P. (2005b). Ideas for startups. Web.
TEDx Talks. (2012). A crash course in creativity: Tina Seelig at TEDxStanford [Video file]. Web.