When it comes to the technology field, it’s a matter of time before a newly founded startup will join in and do exactly what you do only faster, cheaper and better. If this is the case, what will you do? If I were you, I would build a solid product that brings in strong revenue, which in turn will offer you the time needed to find your next cash flow source.
People such as Warren Buffet prefer to not invest in technology companies mainly due to the limited window of opportunity. Moreover, that is one of the reasons why Google is continuously investing in a bunch of projects that have nothing to do with their main business. Whether you like it or not you have to face facts: time is the only thing that’s stopping your company from being disrupted and fighting for survival.
Most startup entrepreneurs consider this ever-present change as a success formula and prefer to disrupt their own business before somebody else does it to them. So here’s what I learned during the years:
First of all, make sure you’re part of the right business. For example, my first business model was nothing short of a disaster. We launched a website which provided translations to and from all languages possible at a reasonable price during the dot com expansion. Nobody was interested in investing money in the business and the orders didn’t really pile up, so to speak. It didn’t bring back enough revenue to be worth the trouble. Thus, we soon realized that it will not work and decided to close shop. We took the experience of developing our website and begun doing translation sites for others.
Picking the appropriate business model, employees, technology and so on for the first time can prove tricky to say the least. Therefore, give yourself the opportunity to experiment and fail. After several failed attempts you will gain the necessary experience to find out the area in which you can be successful.
Two years after I founded my second startup, I had to shift from our business model to ensure the survival and success of my company. Modify the way you monetize your services or products. For 2 years or so our model of selling translation websites worked perfectly, until the 2008 Recession hit and customers were no longer willing to spend money on their websites.
During this recession we introduced features such as leasing programs which allowed customers to get all the features they needed at an affordable price. And given the fact that banks weren’t willing to finance websites and they couldn’t gain access to other credit, they decide to turn to us. While this change hurt my company, I thought this was the only acceptable risk that could still keep us afloat. No more payments up front and that lead to the lowering of morale among the team. However, the program proved to be a success during those difficult years and we actually registered a growth in revenues and profits.
Should you be able to come up with creative ways of selling your product by means of ads or financing it when your competitors aren’t able to, you can achieve success despite the fact that it is no longer part of a traditional sales model. Moreover, you can offer a product or service which you used to monetize, thus creating an opportunity to make it more profitable. You could take Apple for example: They give away the operating system of their smartphone and its applications, thus translating into selling more hardware.
Create an awesome feature. Think a bit about what features you can add to your product or service that will make the lives of your customers easier. Also, don’t forget the find a unique way of selling it even if your customers are not requesting it. Investing your resources your high-end items produce in other products may allow you to find that amazing thing which could drive your company in the future at the speed of light.
Last but not least, to achieve a long-term success, find objective ways to compete with yourself. If you don’t find a way to disrupt your business, be sure that somebody else will come along the way and do just that.