Entrepreneurship is Experimentation!
Entrepreneurship is Experimentation! Check out this comprehensive guide to know everything about entrepreneurship in depth.
August 12, 2016
Entrepreneurship is Experimentation! This article first appeared on Barkan Saeed’s profile on Linkedin. Barkan is Founder and CEO at Vizteck and writes about entrepreneurship and startups.
You had an idea for a product. You find out a way to sell it, it works and your company starts making money. Maybe you are a services guy, you first start selling your skills, and then you find out you can sell the skills of other people who you hire.
You reach a stage where your product has decent revenues and your company is making a good profit. If you are a services guy, maybe you have 2-3 clients who are enough to run the show for your company and make a decent amount of money. You enter a phase where life is set for your company. Revenues are coming, existing clients are giving more business and you hire managers and teams to handle the growth of the company.
Fast forward a few years, and as a services guy, you start to find out that two of your main customers left for totally unexpected reasons. Maybe they were acquired, or maybe they went bankrupt. If you are a product guy, maybe the strategy you were using to generate initial sales are no longer working. Your sales are going down, your profits have turned into losses.
At this stage, you are left with lesser choices. You may have to let go of your most of your staff but you also ideally want to put the company back on its feet. You want to now look for other ways as well. Maybe you want to get more customers for your services company. Maybe you want to try out inbound marketing for generating sales as opposed to a sales guy giving presentations and generating sales.
You want to Experiment. Experiment with new things, and test out new strategies for getting clients. Test out strategies to get new business for your services shop. But now the time is tough. The time has changed because your reserves in the bank are going down. Your employee morale is bad. You are put into a mode of “survival” by unfortunate circumstances.
The question I mostly ask entrepreneurs is if it’s a good time to start doing that. Should you do it when you were going great and everything was running smoothly? Money was coming in and everything was all great. Spending a small percentage of your profit on experimentation was not a problem at all. Putting a small team, to try a new idea of selling or working on a completely new product was not a financial problem at all.
The answer is obvious to this question. However, when I look around I see most entrepreneurs doing this mistake including myself in the past. Why do we do it when we run out of options? Yes, we are resilient as entrepreneurs, and getting back up on our feet is a strong trait of many entrepreneurs. They work against the odds in times of extreme pressure and can come out more strong out of such crises.
The answer is probably more rooted in the fact that we as human beings get into a mode of comfort. Or a mode where we don’t prefer change. Sometimes we become so successful because of our initial strategy, that we either think that the strategy will continue to give us dividends for our life to come. Sometimes we start believing that everything that we do in the future will work. We are the super Entrepreneurs, right?
Some of us consider it a bad thing to fail on projects. Everybody sees us as an example of a success story in the outside world, the tech blogs, and the networking circle you are in.
Why dent your name with a failed product or a failed strategy to the maybe outside world or inside your company? It’s not just small companies that get into this mode. Look at the example of big companies like Nokia which thought that the cell phone world will not change with the coming of the iPhone. The example of Kodak is where they thought the world will not change and they will continue to make huge money from selling films.
Interestingly, both these companies were doing experimentation with what’s next in the technology. Nokia had its view of how the smartphone of the future would work and they were trying out different things like bent smartphones that you could wear on your wrist Kodak was the first one to experiment with digital cameras.
The problem with both these companies was that they failed to experiment with testing these ideas with the public. They were not late on experimenting with technology but they failed to test out these strategies with their customers or maybe new market segments. They had a fixed view of how the world will change around them or how soon it will change. The iPhone and the digital cameras were both disruptive.
They ultimately learned the lesson and Nokia experimented with launching Microsoft OS-based smartphones and Kodak came out with digital cameras eventually. Imagine if Nokia had experimented with an Android-based OS and Kodak launched the digital cameras when its innovation team presented it to the higher management. The world might have been very different for both of these companies.
Do you think apple would continue to sell us these amazing-looking iPhones for the rest of our lives? And facebook will be the number-one social network of the future? I am sure Tim cook doesn’t experiment with cars, artificial intelligence, etc etc and Facebook doesn’t experiment with new forms of social networks. They will have a high chance of landing in trouble. These big companies do have the option of buying something that becomes promising because they are so big but then they usually pay a huge price for it.
The idea that I have come to realize as an entrepreneur is that entrepreneurship is constant experimentation. As entrepreneurs, it’s part of our job description to continue working on new ideas, new sales strategies, new product ideas, etc. Yes maybe you hit a jackpot and you land a big customer that just needs you to focus on growth and not experimentation. You find out a sales formula that requires you to increase your team 10x. Then definitely your priority is to take it to the max level you can.
But as soon as we get to a point where we can do some experimentation on new ideas. We should not waste any time. If you are a big player and you can’t focus on experimentation. You can always set up new teams or new companies to test out new ideas assuming you have the budgets and profits to do that when you are doing awesome.
So, if you are at the stage where you are cashing on one sales strategy or maybe one or two customers but are doing well. Maybe it’s a good time to start spending some time experimenting with new ideas and new strategies. It will be much easier to do it now than to do it in tough times.