10 Rules To Build A Successful Business

5 min read

06 Jun

06Jun

cause that’s the first step to building a great brand.”

Just like Goldman and Nalebuff, I learned a powerful lesson in tenacious passion from 30 plus years of entrepreneurship. When you’re all alone, sitting in a dark room wondering why your business is failing, there is only one true thing to power you forward -- you believe in your purpose.

2. “Don’t aim for 10% improvement. Make it radically better and different.”

Yes -- in today’s society we collectively create amazing products, services and companies through entrepreneurship. World changing at times and Honest Tea was radically different when first introduced. But, if you look around, we also live in the land of ‘me-too’ businesses. Don’t fall for it. Dig deep and decide right now to build something radically different and radically better.

3. “Prepare to be copied. Don’t start unless you’ll survive imitation.”

If your idea is truly radical and takes off, you can count the minutes before the copy-cats arrive. How will you survive competition from the big 800-pound gorillas on the block? Or even from the upstart little guys? Your key is a system of ‘continuous innovation’. Although you could also take the road of Honest Tea -- make friends with one of the gorillas and let them buy you out. (Coca-Cola Company acquired Honest Tea in 2011.)

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4. “Build up reserves of money and energy for bad luck and mistakes.”

Great advice -- but sometimes extremely difficult to do. What startup or growth company has reserves of cash sitting around? But Goldman and Nalebuff make a good point -- run as lean as you possibly can and do not waste money or energy. You will endure mistakes and bad luck along the way, so having a good war chest full of capital and energy can help handle it.

5. “Never, ever give up control -- until you sell.”

Some high-impact entrepreneurs will readily give up control in exchange for the lure of high-growth through venture capital -- but I am not one of them. Relinquish control and you risk losing the culture and vision of the company you set out to build. Even though Honest Tea raised investment capital from the beginning, the co-founders always remained in the driver’s seat. (And yes -- Goldman can still drive his vision as CEO of Honest Tea, but his boss at Coca-Cola can say ‘no’ at anytime. Thus, true control is forever gone.)

6. “Don’t compromise on the big things -- compromise on everything else.”

Vision. Purpose. Core values. Write these things in stone and never budge. But flexibility in the value propositions, products and services you build to execute your purpose is vastly important. Many entrepreneurs I see fail to ‘bend to the market’ by adapting to what their customer’s are telling them.

7. “Figure out how to achieve your goals on a tiny budget -- then cut that number in half.”

Yes -- you’ve heard it said before -- it will cost twice as much, and take twice as long as you think. My recommendation is you apply the principles of lean to your business from day one. No fancy offices. No fancy full color brochures. Your goal is to stay alive until you can nail your secret formula for success. Blowing the budget will insure nothing but a quick death.

8. “It’s a marathon, not a sprint.”

Is it ever. Building a business is neither for the faint of heart or the speed demon. Climbing Mt. Everest is not done in 3 easy steps: 1.) decide you want to do it, 2.) fly to Nepal with zero preparation, 3.) sprint straight up the mountain in 12 easy minutes. Build systems for the long-haul and focus on small-connected steps. (It takes 26,364 steps of 7" each to climb Mt. Everest, and that’s starting from half way up at Basecamp.)

9. “Take care of your family, personal and spiritual health -- if you aren’t laughing or smiling on a regular basis, recalibrate.”

Imagine the path to a wildly successful business: founder working at a feverish pitch for 18 hours each day, for at least 5 years straight. True? No, it’s not. In my private conversation with Goldman, he flat-out told me two reasons he made it through the rough years: first -- he believed in his purpose, second -- his drive for personal balance. The notion we need to kill our family relationships, personal health or level of sanity to build our own business is sadly misaligned. Take it from me -- don’t go there.

10. “Build the enterprise and the brand as if you’ll own them forever.”

Will you sell your business someday? Maybe. Should that be the sole reason you are building it? Probably not. When you start and build a business based on passion and purpose, with a burning desire to solve the pain of your customer through the deliverance of monetizable value, you build a far more valuable enterprise. Those in it for the short-term quick buck rarely succeed.

Plaster these 10 rules from Goldman and Nalebuff to your mirror, live by them everyday of your life as an entrepreneur and you might end up as successful as they. Honest.

NOTE: I'm Eric. Life-long entrepreneur and Founder of Mighty Wise Academy. If you're an entrepreneur -- connect with me right here.

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Entrepreneurs #PowerUpAUG 9, 2017 @ 05:38 AM

Home Run - Achieving A Successful Exit In The Sharing Economy

Trevor Clawson , CONTRIBUTOR

I am a UK business journalist, specializing in fast-growth companies.

Source - Love Home Swap

Debbie Wosskow - going for the higher end of the market

Five years ago it was a novelty. Today the 'sharing' or 'collaborative' economy has become part of the fabric of everyday life for increasing numbers of people in the UK.

That's partly due to the success of global brands such as Uber and Airbnb, But these poster children for platform-driven collaborative commerce represent only the tip of an expanding iceberg.

According to a report published this year by accountancy firm PWC, the five dominant sectors in the UK's sharing economy - namely collaborative finance, holiday letting, transportation, household services and professional services - are set to collectively grow by around 60%, or £8bn, in 2017. Similar growth is expected across Europe as a whole. Not surprisingly, the sector has become a magnet for startups.

But the sharing economy sector can be challenging. To achieve achieve the kind of success that comes from scaling nationally or internationally, entrepreneurs must not only come up with a service idea that is genuinely appealing to sufficient numbers of people, but also demonstrate that buyers and sellers can trust the platform. Added to that, there is the perennial challenge of building a brand and gaining traction in a crowded market.

The rewards are potentially huge for those who succeed. Witness the recent exit achieved by Love Home Swap, a sharing economy company founded in 2011 and sold in July of this year to vacation exchange business RCI ( part of the Wyndham group) for a figure thought to be in the region of £40m.

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Founded by Debbie Wosskow, Love Home Swap is a subscription-based platform that enables those who own luxury houses or apartments to arrange holiday exchanges. Accommodation represents a successful subset of the sharing economy and when you consider that Airbnb is reputedly worth around $30bn, the £40m valuation of Love Home Swap, on the face of it, doesn't seem surprising.

Differentiation is Key

Viewed from a slightly different perspective, however, Love Home Swap has succeeded in differentiating itself within marketplace that has been around in one form or another since the the 1950s. “Home swapping goes back a long way,” acknowledges Wosskow. “Initially it started in the fifties to allow teachers to exchange homes during the long holidays.” In other words it's a concept that pre-dated the modern idea of the sharing economy by around half a century. So how has Love Home Swap managed to carve out its own niche?

As Wosskow explains, she has positioned her company at the higher end of the home exchange market. “I had the idea after going on holiday with two small children. We stayed in one small room in a hotel. On the flight back I watched a film called 'the Holiday' – the ultimate home exchange movie. When I came home I began to think what a modern home exchange business might look like," she says.

Like many entrepreneurs, Wosskow fashioned a business concept around her own experience. Following her holiday, she opted to focus on up-market homes and apartments. The sort she herself would like to stay in. Equally important, she saw the need to create a platform that would appeal in terms of aesthetics and functionality - to high-end customers. “Most existing home exchange sites resembled Craigslist,” she says.

According to Bruce MacFarlane, a managing partner at MMC Ventures -the VC firm that has supported Love Home Swap through three funding rounds – it was that focus on the high end that has differentiated the company. “There is nothing else out there like Love Home Swap,” he says. “Everything else tends to be at the lower end of the market.”

Source - MMC

Bruce MacFarlane - MMC supported Love Home Swap through its funding rounds

A Subscription Model

The company's business model also appealed to MMC. “We liked the idea that it was a subscription based model,” adds MacFarlane.

And according to Wosskow, the subscription model also appealed to users of the site. “We tried all sorts of models,” she says “We found that our customers liked the subscription model.” Given that users of the site were exchanging luxury homes, a model that required upfront payment as the price of admission doubtless provided a degree of assurance.

Building The Brand

Love Home Swap launched with 250 homes on the platform and as Wosskow acknowledges, that wasn't enough.. “That was nothing,” she says. “On a sharing platform, you need inventory. You need buyers and sellers.”

So the challenge was to build a funnel and as Bruce MacFarlane observes, that took time and capital. Having supported the company at the seed stage, MMC continued to invest a total of £2.65m across two subsequent rounds. “It did take time to grow to scale,” says MacFarlane. “We layered in more capital.”

Bringing in the Buyer

The final round saw RCI/Wyndham coming in with not only an investment but also with practical help in developing algorithms for the Love Home Swap site. With a background in time share, Wyndham was a complementary fit as an investor and its involvement paved the way for the exit deal. Wosskow sees the company as the right buyer at the right time. The fit was logical. “We had a very close working relationship with Wyndham,” she says. “And there is a very close overlap between between the time share and holiday exchange businesses.”

Wosskow – who was a founder of trade body, Sharing Economy UK – is optimistic about the the future of the sharing economy generally. “Essentially it is about making money from assets and skills and there all sorts of meta trends that point to its further growth,” she says.

But as the Love Home Swap experience illustrates, the keys to success include differentiation, a sound revenue model, and enough capital to support the sometimes protracted process of building a brand.

END