Costly MBAs , executive education programs and revised & expanded business books, are crammed with different strategies and latest practices. A lot of widespread literature is branded by different business schools or independent best-selling authors trying to recycle old ideas with new technologies. Many entrepreneurial spin-off books tell tales of success. But those success stories are unique isolated incidents based on past situations and variables that cannot be recreated or calculated in todays simulations and projections. One-size-fits-all executive programs are selling you the programs and not holding your hand through the pitfalls.
“It’s good to learn from your mistakes. It’s better to learn from other people’s mistakes.” —Warren Buffett
Launching a new venture is costly and risky. For virgin entrepreneurs, it can mean double the cost and risk of veteran investors. When developing an idea into a business plan a strong sense of urgency can cloud a team’s judgment. Along with time tied anxiety, uncertainty is a major issue when industries shift due to technological breakthroughs or regulatory change. Someone has to go in first and come out the other side—with financials intact. As expected, watchers will observe, adjust and implement. Whether you’re getting into fintech or agritech, it is sometimes better to let another company put their weight behind pushing for an industrial paradigm shift, while you put your time, effort and money towards fulfilling other goals. This might sound like reverse engineered business acumen but moving in last can have many advantages.
Pioneers
Entrepreneurs that spearhead ideas that have never been done before are considered pioneers, and are the ones who open new markets. Their ability to succeed depends not only on a sound business model but more importantly on their ability to influence regulators and nudge power holding incumbents. Young disruptive startups are generally up to date with emerging technologies and have a different vision from older companies that use best practices. The pioneers are the ones who have to influence government to modify trade barriers, legislatures to change policies, developers to update infrastructure, and parallel markets to accept new methodologies. These efforts ease the flow of bilateral trade to all who have vested interests. Pioneers are credited with not only the first mover badge but are also the ones who pave the path for other businesses to follow.
Aerodynamics
Cyclists pedal against resistance to power ahead in the race. There are different factors that can determine a cyclist’s performance, including; gravity, drive resistance, rolling resistance and air resistance. In business, these can be mirrored as different lurking variables that includes: high entry barriers, outdated business ecosystems, unfair competition and false trends. A common strategy amongst cyclists is drafting—wherein a pack of cyclists assemble in a straight line formation to overcome air resistance and last the ultra-distance marathon.
A startup wishing to minimize risk may choose to let other players make costly moves, while they learn and absorb key information from a safe distance. This way companies that want to be risk averse—and move slowly and deliberately— can invest their energy in other areas that can give them a competitive advantage down the line. This zoomed out perspective can reveal market gaps that would not be obvious if you’re too focused on procedural matters that eat up weeks and months.
“Let your plans be dark and impenetrable as night, and when you move, fall like a thunderbolt.” —Sun Tzu
Bamboo
The parable of the Chinese bamboo tree is a story about a farmer who planted some seeds and had a vision of a vast bamboo plantation. He tended the soil for 4 long years with no results. He persisted in watering the seeds and toiling in the sun while neighboring farmers mocked his daily efforts. On the 5th year—to the farmer’s surprise—he saw the bamboo shoot emerge from the earth. And within 5 weeks the bamboo had grown 90 feet tall. During this whole time, what would in later years stand as a tall bamboo tree was growing its roots deep into the soil to support it’s future growth. In the bamboo story we come to understand that:
- Creating a nurturing environment so seeded ideas can develop roots is essential in the beginning of any project.
- A solid foundation can provide a lifetime support system, even if that foundation is invisible to the naked eye.
- Small actions everyday add up and compound in the long-term.
- Cultivating patience, persistence and resilience will help you power through tough times and reach the finish line.
Last Movers
As I covered above, last movers can best emulate an entire sector by learning from the mistakes of others, studying the available industrial data to make a swift move when obstacles have been removed by pioneers.
Last movers have the advantage of not being bound to old systems and business models like their incumbents. The last mover is in a position to adopt the latest business process innovations without the cost of transferring or migrating data and operations from old systems to new. Example: A startup would not purchase Windows XP machines but would jump directly to the current generation technology and standard.
‘Vision’ is not just a sentence mindlessly plastered on your company website, it must resonate deeper with the founders and management team. The backend of your outward projected vision should be rooted in a scrupulously thought-out mental model of how you see the world. ‘Vision’ to your team should translate as an esoteric mental code, it’s essentially the lens through which you evaluate your current position and spot opportunities and market gaps. Polishing this lens is a daily ritual.
Letting others educate the market, invest in infrastructure and deal with fossilized bureaucrats is an intelligent move if you want to focus on inwards growth. Time and effort wisely invested can return exponentially under the right market conditions. So always know which seeds you’re planting where.
