How to Maximize the Potential for Your Next New Venture

In my role as advisor and mentor to many new entrepreneurs, I often find myself suggesting that they think bigger. I’m a techie at heart, and I love to see real innovation, but too often I see just copycat proposals, or at best incremental thinking.

For example, I’m not sure the world needs one more social media niche site, or another dating site, or yet another flavored drink alternative.

I’m convinced that this “me too” or incremental thinking is one of the key reasons that ninety percent of new startups fail, and most of the investors I know won’t sign non-disclosure forms, since they claim to hear the same startup ideas over and over again. We all are excited to hear real innovation, and struggle daily to increase every potential entrepreneur’s scope of thinking.

Based on my experience of many years in the startup community, here are some key principles that seem to generate real innovative thinking within the most successful entrepreneurs I know:

Ideas to improve the usability of an existing product, or ways to extend its audience, are not likely to be unique to you, and difficult to win over competitors. Major innovation, with major payback, requires real change, addresses a major pain point, and hits a large customer segment who can pay.

For example, smart entrepreneurs look for recognizable patterns in disconnected domains. You might find that a problem people in manufacturing face is similar to a problem in your own industry, and their unique solution can be adapted for your use.

A successful startup requires a full understanding of multiple domains, rarely embodied in one person.  You may be a product expert, but have little experience with running a business, or marketing, or sales. Successful people look for complementary co-founders, and hire a multi-faceted team.

Many entrepreneurs are reluctant to expose their idea to others early, often called stealth mode, for fear of it being stolen. I do recommend non-disclosures and patents, but more can be gained than lost by talking to outside experts. Two heads are better than one.

I always look for room in your plan for change, and the mindset to learn. In the startup world, even the best-laid plans are probably wrong, so there is a need to be able to launch fast, have metrics in place to measure progress, learn from real customer feedback, and pivot as required.

The concept of a minimum viable product (MVP) was first proposed by Eric Ries, and is still popular, as a way for start-ups with limited resources to get a product out the door quickly, and get feedback from real customers, before adding unappreciated features.

Even in this era of a pervasive Internet, your customers won’t find even the best new solutions by default. Pervasive communication to your market is always required, including ads, trade shows, viral videos, and online influencer courting. Marketing should begin even at the idea stage.

I still see too much evidence of the “if we build it, they will come” strategy, which postulates that your innovation is so valuable and obvious that minimal or no marketing is required. The value of “word of mouth” advertising is largely overrated.

I see many committed entrepreneurs and teams who are often blinded to business challenges by their passion for an idea, rather than results. Thus I encourage the use of experiments with real customers, the use of experienced advisors, and real data to back up projections.

First you need to investigate industry norms and third-party statistics to understand what is possible and likely. Then you need to set goals and metrics to use as the benchmark for your own results and expectations. Use your passion to get there, not to set the goals.

Really innovative solutions always begin by knowing your customer, so I never recommend that you expand your thinking outside the customer set you know. The shift in thinking I am looking for applies more to defining the solution than finding the problem.