Have you heard of the Internet craze “The Rich Kids of Instagram?” (Bear with me, because this is relevant, I promise). It’s a montage of photos that the top-tier percentile’s offspring post on social media, showcasing unusual activities – lying in a solid gold bathtub, jumping out of a private helicopter into the ocean, that kind of thing.
But, what I find even funnier – and far more relatable - are the parodies people are now posting on Instagram providing a stark contrast to these rich kids’ realities. On one side, a rich kid takes a photo with his Porsche, on the other, a normal guy takes a photo standing on the saddle of his bicycle. A rich kid takes a photo of himself lying in $100 bills… a normal girl takes of photo of herself covered in coins. You get the idea.
Why is this relevant to the subject of business? Because there is a very similar perception-versus-reality disparity around the concept of launching a start-up, and the effort it really takes to do it. We’d all love to believe that one day we’ll bump into an investor in a café who will notice us typing out a business plan and BOOM, you’re financially solvent.
Likewise, in an ideal world every crowd-funding campaign would make a fortune, every product would be noticed by Oprah, and every income would be passive so we could retire to San Tropez. But the reality is that this happens to the minority, and setting up a start-up is usually far less glamorous. You’re far more likely to be living on cornflakes than caviar.
I’m not complaining (I love a challenge) but simply explaining what you’re up against. Of course, it’s worth the struggle for the emotional rewards in the end, but it’s important that entrepreneurs don’t embark on this journey with a rose-tinted filter. Still want to set up a start-up? Then I’m only too happy to share some tips.
Solve a problem
First up you need an idea. This might sound obvious, but you wouldn’t believe how many wannabe entrepreneurs who say, “I want to run my own business”, but draw a blank when you ask “What about?” Where to find inspiration? Your own life and other business. Most great businesses exist to solve a problem that affects a large proportion of the population, and if you’re having a problem, others likely are too.
Network – be persistent!
When I decided to start a magazine, the chief of marketing at one of Australia’s biggest banks ignored all my requests for a meeting for three months, until extremely late one evening when I sent him a tweet. Within four minutes I had a reply: “How about 2pm tomorrow?” Some people would say it was overstepping, but that tweet, which turned into a “yes”, was the beginning of a magazine now sold in 37 countries.
Don’t get bogged in details
It’s not uncommon for people to put together big, thick, dossier business plans, start building prototypes and designing websites, even before they’ve done any market research. If I feel an idea has wings, I generally write up a few pages on the idea – an overview, indicative model, potential markets and indicative marketing – so that I have something to test out with potential customers and partners. If I discover that no one is interested, I knock it on the head and move on.
Invest in education
In very early stages of my first business, I spent $1200 on a two-day business conference. Just to put that into perspective, at the time one of the legs of my desk consisted of a stack of Yellow Pages. Yet I wrote a cheque, prayed it wouldn’t bounce, and it was the best investment of my career to date.
Not only did I learn business strategies that skyrocketed my brand, but I met three people who, within a week, signed up for projects worth between $40,000 and $60,000 each. If we say an average $50,000 for each client, that’s a 12,400 per cent ROI. Now this doesn’t happen at every event I attend, but it shows how powerful the right conversations with the right people can be.
Piggy-back on brands
You need to become a master of leverage, which is simply the art of doing more with less. That’s where partnerships are important.
I once had a client whose target market was doctors, who they were individually calling and mailing. It was madness! Why not go to the peak bodies that have pre-existing relationships with all the doctors, offer them something attractive and get them to do the sell for you?
If you want your start up to amplify and scale, partner with people to help push your message and reach the market place for you.
Don’t beg – Do barter
Unless you are a Rich Kid of Instagram (in which case, do you want to invest in an awesome entrepreneurial magazine?) you will probably have to run your start-up on a shoestring, so quickly need to master the art of negotiation.
Think about the unique skillsets, promotional assets or networks that can act as your alternative currency. You DJ my event, I’ll do the PR for your book. You subsidise the catering for our conference and we’ll offer business-coaching sessions with your team members. I don’t believe in taking anything for free, but there are many different currencies to take you one step closer to the high life.