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Begin by Focusing on What You Know
A pillar of Warren Buffet’s investment philosophy is to invest in that with which you are familiar. Let me give you explanation behind this philosophy. The familiarity that you possess leads to a deeper understanding and insight into the key players in that market and the market overall. This increases the likelihood that you will pick the “winners” in that niche, which should consequentially result in a greater return on investment for you, over time and on average.
Whether or not you agree with this principle for investing, I can tell you from my experience that it is not only applicable for leading and starting a venture, but it is often a critical element to success. If you think about what you are doing when you lead a venture, you are truly going out into the world at large, into that broader market and representing to it that you have a new and better widget, solution or way of doing something. This means you bring greater credibility and experience to the table when making this claim and taking this position, based on your background and experience, which then increases the overall likelihood that you will succeed. What are you good at? Where are your strengths and what do you know the most about?
Choose a Market That’s in Your Wheelhouse
Although this approach is not a guarantee of success, it does greatly increase your odds, and when you are leading a venture, often the best strategy is to tweak or manage those probabilities as you drive toward success. If you start with an industry, a vertical, a market, or an area of expertise in which you are well versed, you can move through the venture creation path more rapidly than a person who has to learn the industry as they go. This isn’t to say that you should never venture into an unfamiliar market, it just means that the path will likely be smoother if you choose a familiar one. Ventures are “odds games” and there is always risk involved. However, if you believe in yourself, your idea, and your ability to execute your concept strongly enough, I say Go For It!
Identify a Problem or a Need in the Marketplace
One other model to use when thinking about starting a venture is to identify an overwhelming market need or trend that you can take advantage of successfully. This approach has worked well for some, in fact so well in some cases that those ventures have even created their own entirely new markets. This strategy requires a greater number of external factors working in your favor, not the least of which is correctly assessing market needs, market timing, a market entrant position and just plain old luck.
Many entrepreneurs or venture leaders head out, hammer in hand, looking for a nail. Time and again they are sorely disappointed when there is no nail to be found. Don’t be that venture leader! Leading ventures focus on the need or problem in the marketplace and build products and platforms to satisfy that need. There are some great examples of those, like Apple, who built a product for a need that we didn’t even know we had — The Smart Phone! But for every iPhone there are innumerable examples of other unsuccessful ventures who have tried something similar and failed, for example, RIMM’s Blackberry, Microsoft’s Nokia, and Amazon’s Fire. Once again, remember that starting a venture is very much a play on the odds in the market and, whatever you can do to tilt the scales and odds in your favor as a venture leader, it is your sworn duty to do. There isn’t a more fundamental tilt of these odds in your favor then basing your product and venture on a critical market need. You can always build or buy a hammer, provided that’s what the market needs.
Interesting read: Check out Rose Leadem’s article on The Role of Gender in Entrepreneurship Today
About this blog The goal of this blog is to share my experiences, to capture and reveal valuable insights, and to draw from my serial entrepreneur-ship through 7 ventures over the past 20 years. I have encountered many impressive entrepreneurs along the way and I hope to share our collective experience with you to help teach and perhaps motivate you to launch your own B2B or B2C enterprise.
Like what you’ve read, or not? Have a question or a topic to suggest? Want to get another perspective on an issue or challenge you’re facing? I welcome your comments, feedback and insights below or feel free to email me here.