10 CEO Secrets to Launching a Million-Dollar Startup
Updated: Dec. 30, 2019Use these savvy tips from the co-authors of the entrepreneur’s guide SHORTCUT YOUR STARTUP to turn your business idea into a money-making success.
Seize the moment
Starting a business has never been easier. Traditional barriers to entry—such as access to a distribution model, the availability of online traffic, or the abundance of funding capital—have been lowered, which has made life easier for entrepreneurs. By the same token, however, life has been made easier for everybody, so competition has increased. The net effect is a crowded playing field where there are few winners and many losers. The switchups (or secrets) presented here offer different ways of tackling the issues that entrepreneurs must face, based on real-life CEOs. Hint: They all follow these modern rules of business etiquette.
Get into the trenches
Focus on the investigative work that needs to be done before launching a product, rather than relying solely on high-level research. Use this time to evaluate the feasibility of the issue your product is trying to address. A great example is our friend who left Goldman Sachs for a minimum wage job at Chipotle to see if his fast Italian-style restaurant idea was feasible. He didn’t pursue the idea, but he only found that out through his investigative work! There are numerous ways to investigate, from determining your pricing, to finding your ideal customer, to identifying your “hero” product. While none of the work is particularly flashy, getting into the trenches early will save your company valuable time and money down the road. Here are more tips to help you quit your day job and start your dream career.
Know if you’re a speedboat or a sailboat
Not all business strategies are created equal, and not all companies take the same route from point A to point B. That’s why it’s important to determine whether your company is a sailboat or a speedboat. Speedboats are first movers in an industry who sprint to the finish line and define success by finishing first or second. Think of Lyft as an example. On the other hand, sailboats head in a general direction, waiting for the surrounding winds to take them. One company that followed this path is KeVita, the manufacturer of sparkling probiotic drinks, by anticipating the popularity of the kombucha trend. Discovering your strategy—and sticking to it—is essential to your business’ success. Here are the surprising ways people found their dream careers.
Take advantage of your unfair advantages
What do these three things have in common: advanced knowledge of artificial intelligence, access to a supply chain, and a relationship with an influencer who will promote your product? They’re all unfair advantages that can give your company a leg up on the competition. Whatever it is, everybody has one, but simply having one is not enough. You must ruthlessly capitalize on it. An advantage doesn’t mean you need to know a celebrity with 50 million followers. Thrive Market capitalized on its own version of influencers: regular folks with large social followings who love posting about food. No matter how big or small, everybody has an unfair advantage. You must take advantage of it! Can you answer this CEO’s favorite interview question?
Do what you do best, and outsource the rest
There’s a misconception that a great company or a great CEO must be great at everything. This could not be further from the truth! We all have specific strengths and it’s critical to stay focused on them—and outsource everything else. Surf Air, the provider of unlimited flights for a fixed fee, leveraged this model. Originally buying and maintaining its own fleet, Surf Air sold the planes and partnered with a third-party operator who manages them, allowing Surf Air to stay lean and focus on its core management and marketing strengths. The result is a quicker and more efficient workflow. Get more amazing small-business insights from the founder of Honest Tea.
Build in flexibility and a diversified focus
Sometimes an original business plan doesn’t work out neatly. Rather, most of the time, the original business plan doesn’t work out neatly. Iterations and pivots are a natural part of any business, and it is crucial to remain flexible both mentally and physically with the structure of your business. For instance, Pinterest started as Tote, a mobile shopping app, but pivoted towards its current form as it realized customers were using the platform to make lists of their favorite clothes. This is common! It’s key to view iterations and pivots not as obstacles, but as opportunities that can be leveraged to fuel your company’s growth. Being a flexible thinker is one of the ways to become indispensable at work.
Think milestone, not time
Having goals for your company is great. However, too many companies focus on the wrong goals. They pay attention to receiving X dollars of funding, or having Y months of runway remaining. Instead, focus on tangible, measurable goals that affect your company’s operations, such as reaching a target churn rate or particular revenue amount. Thinking in operational milestones is more effective than using time or funding-based goals, as you can pause and evaluate your paths along the way. Keeping a wide perspective and an open mind is a key to success!
Nail it before you scale it
Once you launch your product and company, the next step is to rapidly scale, right? Not quite. Many companies unravel during the scaling process—why is why you must ensure that your company is strong enough to handle it. Initially having a great product that serves a few customers is much better than having an unpolished one that serves everybody. Working out any and all kinks during this initial period is crucial to your company’s success. For instance, the Honest Company resisted scaling early in order to learn what its customers actually wanted. The time for scaling will come, and when it does, your company must take the airplane, not the stairs. And if you scaled too soon, check out the best ways to bounce back from failure.
One percent better is 1,000 percent better
Runners finish races within seconds of each other. The differences in times are miniscule—sometimes fractions of a second—but there is only one winner. Running a business is similar, as tiny details can push your company beyond the competition and give you the leg up. That’s why it’s critical to identify these seemingly insignificant ways to improve your business and watch the resulting effect of these improvements compound greatly down the road. You’ll learn how to constantly search for these small tweaks that pay dividends down the road.
Tug at the heartstrings to get buy-in
Think of a few of your favorite companies or products. Odds are that you like them for a reason beyond the quality of their product and service. Maybe you love a company’s message, such as its decision to donate 1 percent of its top line revenues to underserved communities or countries. Customers are more focused on brand image than ever before and are increasingly buying based on emotion. Whether it be TOMS Shoes’ focus on social good or Sir Kensington’s funny (and weird!) fictitious background story, there are many ways to capture the hearts of consumers and let them know what you stand for. Create a brand that differentiates your business from the competition. These are the most trusted brands in America.
Success doesn’t equal a successful exit
Having a successful business does not always equate to having a successful business that people want to buy. In fact, it has become increasingly difficult to get acquired in recent years. Now, cash flows and profit are not enough to move the needle—your company must be strategic to potential acquirers. For instance, Unilever bought Dollar Shave Club for its direct-to-consumer model, not its sales. From a novel distribution model to new and innovative technology to access to a particular demographic, there are numerous reasons why your company could be acquired. The key is determining early on why a potential buyer needs you more than you need them.