[ad_1]
Opinions expressed by Entrepreneur contributors are their own.
When I started my first company 15 years ago, I didn't know who Steve Jobs was, that Silicon Valley was a place or that you'd call an early-stage business run by naive optimists a "startup." It was my now co-founders who brought me into the fold. We were part of an ecosystem where "new markets" and "disruption" were taught as the foundations for innovation. It took a voyage through the venture capital inferno to shed these misconceptions.
To understand what I mean, consider a magic trick. A magician holding a deck of cards asks you to name a card in the deck. You name the ace of spades. The magician shuffles the deck and after a momentous pause, asks you to reach into your pocket. You pull out the ace of spades.
You might have some ideas about how this trick is executed, but you don't know with certainty and you probably don't care. You're just surprised and happy with the outcome. That happiness is a result of months spent refining an age-old method to reduce the error rate and perfect the outcome. That is the real magic.
Innovation in business is rarely a technological discovery, rather it's an innovation in process. Great businesses build products where these innovations are taken for granted. I like to call this "boring magic."
In a world where 75% of startups fail, I've learned that if you're excited about the boring things, you can build better products, run a more stable business and certainly innovate.
These are the areas of your business, the pieces of boring magic, that will help you drive long-term success as a founder.
Related: Define Your Short-Term Goals With These 3 Components for Long-Term Success
1. Fall in love with boring problems
Living in New York is a daily reminder of humanity's bewildering engineering momentum. On the Brooklyn Bridge, a puzzle of steel and stone, cars move thousands of people from one island to another. I find myself fixated on the bridge's pillars and think that whoever makes bridge bearings is the real innovator behind a bridge's design.
I find it helpful to think of software like bridges. Whenever a new foundational technology emerges and becomes widely accessible, like AI, very few operators have the discipline to think practically about how it might improve the experience for those using it. You should absolutely be thinking about how to use off-the-shelf AI tools at your company, but my recommendation is to use AI more like a bridge bearing, rather than making it the product. I'll give you an example.
At some point, many businesses need to ingest data from disparate sources and convert that data into a specific format. Large Language Models (LLMs) represent an operational gold mine for this. Forget emergent AI. LLMs are amazing at ingesting data and turning that information into a format of your design — a process called data normalization. This used to take months, but with LLMs, it can be done in seconds and with fewer engineering resources.
Most people aren't going to be excited about data normalization, but they will be impressed by your burn rate reduction and the swath of new customers you gain by optimizing your product.
2. Think big but be boring
One of the biggest mistakes I see founders make is designing their business as if they've already made it. They over-invest in a management team before market traction, over-invest in product features when no one knows they exist or worse, over-invest in fringe benefits like swag and free meals because they're infatuated with "startup" life.
If you over-invest and fail to run a sound business, you will regret it.
Before you decide to launch a new product, you should do three things:
- Assess your cash balance.
- Build a budget and determine how much time and money you're willing to spend on building the new product.
- Then, create a product strategy based on those decisions.
It's amazing how many companies don't have an answer to "What's your budget?" or don't know the basics of creating one. And if they do, they typically haven't thought beyond the initial investment money they've received. To build a long-term budget, you need to factor in ongoing product maintenance and project your costs as your services scale.
All of these decisions have big downstream impacts on who you're able to hire, how you build your teams, and as a result, how quickly you're able to move. If you focus on how much money it will take to not only build your product but build the business around it, your customers and your bank balance will see the benefits.
Related: How to Structure and Build a Team For Long-Term Success
3. Invest in your people; they're your magic
A year into starting my first business, the other founders and I realized our pipeline wasn't going to support paying our staff for the next month. We had assumed that the next project would always be around the corner, and never factored churn into our model. But when you're responsible for people being able to feed themselves and their families, it's a huge wake-up call. We decided that the founders would not take a salary for two months. We paid our people and got back on track.
This is the foundation of every culture I help create as a leader: we do not take a month of revenue for granted. We do not take people for granted, ever. We have a deep understanding of our responsibility and how important it is to live up to that.
I never want to relive the experience of not being able to make payroll and it forces me to hire only if I'm certain I can afford the person in a down month. It forces me to be boring about how I run my business. Even when you get a big injection of cash, you still need to hire with intention. You need to think strategically about where you are as a business and where you want to go next. Hire the people who will help get you there, move on quickly if the fit isn't right, and ensure you're at the next stage of growth before adding additional roles.
Most founders don't want to spend time on the "boring" stuff. But if you want your company to not only survive but continue to grow throughout the years, boring magic is table stakes. It's the silver bullet you need for longevity.
0 Comments