In the podcast series, Seth Godin’s Startup School, Seth Godin gave a guided tour to a group of highly-motivated early-stage entrepreneurs on some of the questions they will have to dig deep and ask themselves while they build up their business. Here are my takeaways from various topics discussed in the podcast episodes.
- In all business ventures, it is important to know not only how to do something very well but also where to go and to be willing to get hit along the way. The first thing to do is to nail down our vision, what will happen when. We then can explore a bunch of useful tools and technologies that can help entrepreneurs execute faster and cheaper.
- There is an infinite number of great ideas. One of the mistakes, though, is that we get into a venture, producing the thing we do for fun, but it turned out not to be a good business. It is more fun to work in a business that is working than it is to work on a failing business in an industry we like because failing businesses suck. It is much more effective to do the uncomfortable work of picking a better structure upfront.
- The hard part of any business is always getting someone to pay money for the goods we produce. Who is the customer and why are they going to give us money? If we got enough customers, we could solve our raw material and production problems.
- It is also important to understand the macro and micro factors in an industry. The vinyl album industry is an excellent example. The macro vinyl album industry is dead, but there are now thousands of micro vinyl album markets that are thriving. The old industry is dead, but the new pockets are going to be better than ever because the people who were still left care deeply about the micro markets. They are not just tourists or passer-by. They are the kinds of people who are way more likely to pay to be connected and to be informed. We do not need everybody or the scale, and we need only the passionate few.
- Studying our competitors is one great way to understand what is going on in the marketplace. There are many ways to study one’s competitors. We can do this by Googling their name. How many people are talking about them? How many people are interacting with them? Does this company have one employee, fifty employees or five hundred employees? Can we find people who buy from them and love them? Can we find people who buy from them and are unhappy that they must buy from them? When someone dropped something into the pond, we can look at the ripples. The ripples will tell us how big the rock was and how deep the pond was. We then can then make some guesses about whether our competitors have completely satisfied the market or just touched the tip of the iceberg. We also can buy stuff from them and find out what sort of interactions are happening and follow-up. We can also go into their community and discover more. How many people are in their community? Do they come back every day? What is the velocity of the interactions here?
- Another great tool is the four-quadrant market position discussed in the book Free Prize Inside. We can put whatever we want on the two axes and list where our competitors are. Whatever we pick, we should be in a different corner than the people we want to compete with. We start by saying this is a vibrant community and they put themselves in the quadrant where they cannot move. We can go to the other quadrant and say “Everyone, we are just like them, but we are this and that.” If we can deliver on our promise, a certain number will cross the road and see us.
- There are two kinds of markets. There is a market that is big enough that we can afford to waste some samples, and there is a market so small that we cannot. In the latter case, we must be a little bit more diligent at who we are going to meet with and understand their pain. They are probably not going to tell us the real problem, so we must guess based on what they say. We must listen and diagnose that what they need.
- Many opportunities are in front of us just for the taking. Delayed gratification is a good trait that pays off in the long run, but here is a point to consider. With these opportunities in front, do not hold ourselves back. Do not say “Well, I am not qualified for that,” “I probably won’t get any opportunities,” or “It is someone else’s turn to get the opportunity.” Just take the opportunity because this revolution is not going to last very long, and we are in the right place at the right time for once.