5 Invaluable Lessons Silicon Valley Startups Can Teach Us About Small Business
For most of us small business owners, Silicon Valley startups can seem wildly bizarre. We hear their founders interviewed on TV, read about their mega successes online, and it’s hard to wrap our minds around the mind-boggling valuations!
What can these tech monstrosities teach us about running a small business?
A lot more than you might think. Although they look little alike at first glance, once you break down the principles that make startups successful, it’s easier to spot the key insights and apply them.
Many of your competitors won’t do this. So, when you’re willing to open your mind and explore those often-overlooked similarities, you can stand out from the pack.
Ready to get started?
Let’s dive in.
Timeless Principles for Every Successful Business
Just like you’d drive down the block and see a huge variety of businesses, tech startups serve basically every market under the sun.
You’ve got apps, software developers, and IT services. There are huge differences between their business models and target audiences. With that said, a set of key principles link them together – principles you can use to take your own business to the next level.
Here are five of the most important business lessons Silicon Valley startups can teach us today:
1.Don’t Let Perfectionism Hold You Back
The old aphorism has it right: “Perfect is the enemy of done.”
A lot of us small business owners struggle with this. We’re perfectionists at heart. Often it’s this desire to be in control – and do things better – that drives us to start our own thing.
When you take this tendency, and combine it with the emotional attachment that comes after pouring countless hours and dollars into your venture, it’s only natural to agonize over the details.
Should you launch that new product?
Or expand into a larger location?
Sometimes we feel paralyzed on the cusps of these decisions. So, we justify putting them off for “later,” once circumstances change or we have more information. Except later never comes.
Successful tech startups, on the other hand, aren’t afraid to experiment. They launch the best products they can with the resources they have, but they do launch them. They understand that nothing can replace the real-world market’s response to their creations.
By prioritizing experimentation and being persistent about collecting customer feedback, it’s easier to know what to improve – and how to do it.
- Dropbox posted a three-minute explainer video to the popular tech website Hacker News to describe the concept behind the business and generate invaluable feedback. This happened before they even had a product!
- Instead of investing a ton of money in inventory and a fancy e-commerce website, the founder of Zappos started out by buying shoes from retailers, shipping them, and processing payments by hand. This was very inefficient. But it validated market demand.
We can do the same. We can be smart about mitigating risks while still being willing to experiment. Instead of playing the “what if” game in our heads (a game with no real answers), we can let our customers tell us how to improve.
What’s something you’ve wanted to try but have been putting off? How can you finally make it happen?
2. Think Big, But Act Small
Our budgets are limited, but our dreams aren’t. Dreaming big is practically a requirement for every entrepreneur.
Silicon Valley is no different. These companies set out to change the world in an unforgettable way. But the successful ones find a way to keep those dreams alive while still doing the daily actions needed to make them reality.
- Jack Dorsey, the founder and CEO of Twitter, gives each day of the week a different “theme” (marketing, product, management, etc.) That way he knows what to do every day, and he pursues it with 100 percent of his energy.
Have grand visions for your business?
Ever feel completely terrified when you look at where you are now and can’t see how to get there?
You aren’t alone. This happens to ambitious entrepreneurs all the time. Bold intentions can lead to confusion, procrastination, or just keeping on with how you’re doing things now.
The solution, then, isn’t to give up on your dreams. It’s to break them down into smaller, more manageable chunks. You probably won’t know every step you need to take to reach your ultimate goal. And that’s okay. Concentrate on what you need to do this week (or better yet, today) to move yourself a little closer.
Focusing on something you can control (your effort and processes) is much less overwhelming than getting swept away by a grand dream. It allows you to celebrate your small victories instead of stressing about how far away you are from the larger ones.
3. Embrace Change
One thing almost every successful startup has in common: a willingness to embrace change.
These founders draw up business plans and woo investors with a concrete vision. But the end product usually turns out a lot different than their original intentions.
- Facebook was “Facemash,” a goofy website that let visitors compare two Harvard University students and vote to decide who was better-looking. Now it’s a social networking giant.
- Flickr was an online game before shifting to become an image and video-hosting website.
Imagine what would have happened if these founders clung to their original plans and refused to change. How much money would they have lost? How many opportunities would they have missed?
It’s so easy to get attached to a certain way of doing things. We assume that, just because we’ve been doing something one way for five years, it’s the only way forward. Or we must keep on because that’s exactly what our competitors are doing.
If we let our (self-imposed) constraints live on, we might inadvertently limit our ability to grow.
Startup founder Todd Connor recommends being in love with the business problem you’re trying to solve, but unattached to the solution.
Adopting this mindset opens a world of possibilities. You may sell products right now, but what if your market would be better served with services? Or a complete overhaul of your pricing model?
Customer feedback and behavior are probably already hinting at the direction you should go. If you’re willing to let your business listen to where the market pulls you, that caterpillar you’ve been growing can transform into a beautiful butterfly.
4. Add Personal Touches to the Customer Experience
Tech startups are everywhere these days. Savvy business owners recognize that people are becoming increasingly comfortable with technology. This phenomenon is shaking up the very core of how we do business.
But all of that connectivity and convenience comes with a cost: a loss of personal connection. You can buy a new book with just a few clicks on Amazon. But does that compare with going into your favorite local bookstore, chatting up the owner, and walking out with a few purchases based on their recommendations?
Not exactly. The latter situation has an element of personalization. Something that makes every customer feel valued and creates a unique experience.
Successful startups (Amazon included) are working feverishly to replicate this personalization in a digital era. Brands like Pandora and Spotify grew into billion-dollar businesses by using technology to give users more control (and customization) over their music listening experiences.
As a small business owner, creating these personal touches is one of your key advantages against larger competitors. How can you tweak your processes to make each customer feel valued as an individual instead of a statistic? Your competitors might have more volume, but it doesn’t take a huge budget to create more memorable experiences.
5. Empower Your Team to Do Their Best Work
I already touched on how a lot of small business entrepreneurs are perfectionists. We like that sense of control we can’t find working for someone else.
There’s always a temptation to “do it all.” And in the beginning, without the money to hire anyone, that’s often a necessity. Unfortunately, this can ruin us later after we gain some traction.
Letting go is one of the biggest challenges tech entrepreneurs face. Picture someone pounding Red Bulls all night on a marathon coding session. Night after night until they’ve built something incredible. Once the money starts coming in, they struggle to let anyone else help.
Refusing to let go is bad for your business, and it’s bad for your health. If you keep on like you did in the beginning, the tasks to complete will just multiply. You won’t have time to sleep or take care of yourself. Eventually you’ll burn out.
Some entrepreneurs hire employees, but they never really let go and let them do their jobs. They hover over their shoulders instead of letting the work get done.
By all means, hire your team carefully, but once you do, hand them the reins to thrive. Trusting their judgment and asking for their ideas to improve will make them feel valued. That encourages them to work harder and smarter, creating a better experience for your customers.
Over to You
Some of the most successful tech startups are more like your business than you probably imagined.
They serve different audiences with different products and services. But the business fundamentals that make them succeed in a world where so many of their competitors fail? Those we can translate into our own small businesses – even if we’re following a “low tech” brick and mortar business model.
Which of the tips above stands out to you as the most important? How can you apply it in your own business? Leave a comment below and let us know!