So you’ve found the problem, listened to users, got the idea, assembled the team. What next? All of these are necessary, but not sufficient! The ultimate judge of entrepreneurial success is how well you execute and I believe there are 3 things that you must get right. I call them “the 3 A's of entrepreneurship” and they are all about execution.
- Audit - the data and what you're doing
- Admit - when things aren't working
- Adapt - and survive
1. Audit
There is a dispassionate, objective aspect to the term “audit”, and that is precisely the mindset you need to adopt. Data will inform what you need to do and it will keep you honest. Auditing, as in accounting, is all about understanding the details – product usage, process, users, etc. For Internet products in particular, aggregated usage data is increasingly easy to acquire, especially if you build instrumentation/experimentation frameworks right into your products. Just secure it properly and keep it private!
Data and experimentation naturally go hand in hand. Experiment early and often, and fail quickly. At Google we run lots of experiments - for example, 5000 experiments for web search alone each year – of which maybe 1% will be adopted. When you’re experimenting and “failing” continuously, it’s no longer failing, it’s “learning” (more on failing below).
2. Admit
Acquiring the data and auditing it is all well and good, but you also need to admit to yourselves when things are going pear shaped. Only by admitting what is not working, can you move forward. And you need to do this without fear of recriminations, i.e., without punishing failure. Entrepreneurs accept that the mother of success is taking a risk, but it's also the mother of failure. Therefore you need to build a culture that embraces risk taking and accepts failure. For the ideas that don’t succeed, admit it and move on.
3. Adapt
If you're in a startup, you can't afford the luxury of staying with a failing experiment or an unreceptive market any longer than necessary. So once you've admitted that fact, it's time to adapt. "Pivot" has become the fashionable term to describe this; it's overused but it's a useful metaphor. Being able to adapt quickly and implement new strategies enables startups to survive. It requires building a culture that not just tolerates change, but thrives in the face of it.
In both startups that I've personally founded (NetPriva and NetMind), my initial business model did not work. I'm not embarrassed about that fact – although I admit I found it stressful at the time. My team and I had to adapt to survive and in both cases we successfully did so, with good returns to our investors. In another startup (Foursticks) we did not adapt quickly enough and we perished. It's that simple. Adapt and survive.
A final comment about execution. Being first to market isn't always best, but neither is being “perfect to market”, i.e., trying to build the perfect product – you'll just as likely go bust trying to perfect your product. So you need to find a balance and best way to do so is to launch and iterate, then repeat the launch/iterate cycle.
The “3 A's” certainly won't solve all your execution problems, such as ensuring you have sufficient capital. Nevertheless, I believe that a startup that adheres to these principles is going to execute better than one that doesn't.
Next time, I'll talk about why you should “just do it”, or why I think it's never been a better time to be an entrepreneur, especially here in Australia which has dodged the global financial crisis.
DIGITAL JUICE
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