If you have ever been a passenger on a jet you realize how much energy and runway it takes to move the plane from a standstill to being airborne. All is calm as the craft makes its way from the gate to the taxiway. It isn’t until the moment the plane rolls onto the runway that things change and in a hurry. This is when the pilots apply full throttle and the plane begins to shudder and at that moment there is a significant increase in the noise as the plane hurtles down the runway. The bigger the plane the longer it takes for gravity to be defeated and depending on the passenger this moment is either exhilarating or terrifying.
Metaphorically speaking, it requires just as much energy to get a business off the ground. The bigger and more complicated your business, the more resources are required. The less industry knowledge you have, the longer the runway you need.
Almost every day, I get the opportunity to deal with people all along the entrepreneurial spectrum. A good many of my conversations are with individuals at the pre-start-up phase looking for guidance on how best to execute their ideas. These aren’t all newbies, I regularly get existing owners seeking advice on expanding their interests. Of course I have a list of standard questions that I ask, but one that I pretty much ask everyone, is if they have a background in the industry that they are considering jumping into? Not surprisingly, many do not.
The reason I ask is simple, the more experience and knowledge an individual has, the less time and energy they require to understand the industry. The quicker they start generating revenue, the quicker they can get their business off the ground. I believe that one reason the failure rate is so high amongst start-ups is that they don’t have enough industry knowledge when they begin. Because they haven’t worked in or around an industry, they are basing their business concept on unvalidated opinions and not facts. Just because you are a consumer of a product doesn’t make you an expert. Just because you don’t like the service parameters within an industry doesn’t automatically make you an expert.
The point is, as consumers and customers, what most of us see in any business or industry is usually just the tip of the iceberg. That’s not to say there isn’t a better way, there usually is, but what goes on behind the scenes would truly surprise most people. It’s never as simple as it looks. And if it looks simple, it’s because it is a well-orchestrated symphony of activity that culminates at the point of purchase.
Can you provide a better service or widget? Absolutely! Everything can be improved. But as a start-up, not having industry experience is an automatic penalty in my books. The time and effort required to get up to speed, to say nothing of the potential mistakes you’ll make, is substantial. Compound that by ensuring you have sufficient resources and patience to survive as you acquire the knowledge.
The more experience you have, the less runway you need and in this case having a longer runway just increases your margin of safety.
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