Secrets to a Successful Startup

A Recession-Proof Guide to Starting, Surviving & Thriving in Your Own Venture

Trevor Blake

• Publisher: New World Library
• Year: 2020
• Print ISBN: 9781524758844
• eBook ISBN: 9781608686674
• Topic: Personal Development
• Subtopic: Entrepreneurship

Everything You Need to Start and Succeed in Your Own Venture Trevor Blake built three successful startups and sold them for more than $300 million. Now he's written a complete instruction manual that covers everything the budding entrepreneur or existing business owner needs to know to build the career or business of their dreams. Unlike the many theoretical guides out there, this is a practical handbook based on Blake's wildly successful in-the-trenches experience. It incorporates leading-edge strategies that cover every aspect of running a business — including funding, developing systems, and marketing. Blake presents in-depth insight into managing effectively, maintaining cash flow, and adapting to the changing needs of customers in volatile economic times. One of his most innovative contributions is an emphasis on cultivating the right mindset, and he tells you exactly how to do that. "The secret to success isn't in the plan, " he writes. "It's in the person holding it." His proven methods will give you the confidence to take the entrepreneurial leap and turn your winning idea into an efficient, profitable company.

PART I

STARTING

The Global Pioneering Spirit

“Begin at the beginning,” the King said, very gravely, “and go on till you come to the end: then stop.”

— LEWIS CARROLL, Alice’s Adventures in Wonderland

CHAPTER ONE

Turn a Moment of Insight into a Winning Idea

A moment’s insight is sometimes worth a life’s experience.

— OLIVER WENDELL HOLMES SR.

When most people come up with an idea for a startup, they are inspired by something they do well, have experience with, or enjoy and are passionate about. In that moment, many startups are doomed.

My advice is: To come up with a winning idea, pay attention to what makes you mad. Don’t focus on your skills or what you love and want to do; figure out what you want to change.

What Makes a Winning Idea?

When I decided it was time to be my own boss, I did what most people do. I considered what I enjoyed doing and what I was especially good at. However, when I analyzed my life honestly, I had to admit that I was not very skilled at anything. It came as a bit of a shock to realize that I had no talent, but that revelation is probably what saved me from joining the millions of failed startups.

By my fortieth birthday, I had changed careers three times, and without much of a plan, I had become a sales manager for a biotechnology company. In essence, I was responsible for managing a sales team, which involved some skills, and I could lead a team, but those talents were not unique in any way. I could not figure out how to turn that experience into a winning idea for my own business. In addition, the dot-com bubble had already burst, I knew nothing about computers but how to type on them, and my lack of do-it-yourself skills was a subject of family legend. I had long been banned from going near a toolbox, so being any kind of tradesman was easily ruled out.

When I realized I wasn’t getting anywhere struggling to solve this alone, I decided to research others who had faced this same problem. After all, this strategy had already worked for me once. When I was younger, I lived a hardscrabble life. I wanted to travel the world and to be an adventurer, but it seemed impossible. I couldn’t work out how to escape the quicksand that was my life back then. So I read the biographies of explorers. Dozens of them had started out in even worse situations than mine, and their inspiring life stories helped me rewire my thinking. I began to mirror their attitudes and habits, and before long, I took my first adventure. Over the next two decades, my travels included lengthy visits to fifty-six countries.

Now I wanted to be my own boss, so I sought inspiration in the biographies of business pioneers. I hoped their inspiring stories would reveal some latent skill or knowledge that I shared with them. I wanted to know what talents had triggered their pioneering business journeys.

That is when the real “secret” to a winning idea hit me. It jumped right off the pages of every biography. It wasn’t a particular talent or skill. It wasn’t passion for what you are selling or doing what you love. It wasn’t some innate quality that some entrepreneurs are born with. It wasn’t some life experience or education that turned someone into a successful entrepreneur. In fact, the desire for success or to make millions seemed to be the wrong mindset entirely. Instead, the one thing every legendary entrepreneur had in common was that they were ordinary people who got so hopping mad about something they were driven to fix it.

Further, they did this even when they lacked the experience or qualifications to solve the problem. Most of them were clueless about where to begin. They didn’t have top-notch management teams or access to funding, and in most cases they didn’t desire to be entrepreneurs at all. They were simply driven by a deep motivation to find a way to fix something that had somehow got under their skin, and in the process they inadvertently became business leaders.

This is the simple yet profound secret to a winning idea: Be motivated to improve the world in one specific way.

Henry Ford grew up on a farm, and later he became an engineer working at the Edison Illuminating Company. He didn’t set out to become an entrepreneur who would revolutionize the automobile industry and manufacturing. Instead, he was mad that, when he was growing up, driving a car was a rich man’s privilege. Ford wanted to make cars that common folk could afford, freeing them to travel.

The story of Madam C. J. Walker is one of my favorites. The daughter of former slaves in the American South, Walker became angry because her hair kept falling out due to malnutrition, stress, and the damage caused by all the “snake oil” concoctions being sold by traveling salesmen at the end of the nineteenth century. She got so mad she developed her own hair tonic for herself. When other African American women began asking her for some, Walker started selling her hair tonic door to door.

By the time she died in 1919, Walker had become America’s first female self-made millionaire and was considered the wealthiest African American businessperson, and she achieved this against almost unthinkable odds. She was the wrong color and the wrong sex in a racist, male-dominated society. She was the wrong class, she had no formal education, and she had no expertise in chemistry, beauty products, or business. Few successful entrepreneurs anywhere, at any time, have had as many hurdles to overcome, and I consider Walker one of my heroes. I wish I could have met her. If you could bottle what made Walker tick, you would surely make billions.

Another story that inspired me was Sir Richard Branson, whose dyslexia led to poor academic performance in school. His first business was a magazine called Student, through which he advertised discounted records for students, who typically couldn’t afford the record prices at “High Street” stores. This made Branson mad, and he later said, “There is no point in starting your own business unless you do it out of a sense of frustration.”

Selling records eventually led Branson to found a record label, Virgin Records. Then, another moment of frustration led him to start an airline. About thirty years ago, American Airlines canceled his flight to the British Virgin Islands, where “a beautiful woman” was waiting for him, and Branson became incensed.

“I went to the back of the airport, hired a plane, borrowed a blackboard, and wrote, ‘Virgin Air, $39 single flight,’” he recalls. “I walked around all the stranded people and filled up the plane. As we landed, a passenger said to me: ‘Virgin Airways isn’t too bad — smarten up the service and you could be in business.’” Branson eventually married the beautiful woman, Joan, and turned his anger into a profitable airline.

Netflix cofounder Reed Hastings started Netflix after he was charged forty dollars in late return fees for a video at his local Blockbuster. “I had misplaced the cassette,” he admits. “It was all my fault. I didn’t want to tell my wife about it. And I said to myself, I’m going to compromise the integrity of my marriage over a late fee? Later, I realized my gym had a much better business model. You could pay thirty or forty dollars a month and work out as little or as much as you wanted.” Hastings transformed his embarrassment and frustration into a new model for renting movies, and just as importantly, Netflix has since adapted with the times and become a global streaming sensation.

Sara Blakely was irritated by the seamed foot in her pantyhose, so she cut the toe section off. When she realized others had the same dilemma, she knew this common problem represented a business opportunity. Fearing ridicule, however, she didn’t even share her business plan with her husband or family until her company, Spanx, was well underway.

Academics might try, but I can’t find any genetic, psychological, cultural, or environmental commonalities between Ford, Walker, Branson, Hastings, and Blakely. Before starting their businesses, none had a shared identifiable talent or passion. What happened, however, what unites their stories, is that they used their experiences of frustration to do something to change and improve the world. That is where winning business ideas come from.

A Winning Idea Fills a Need or Fixes a Problem

However, the truth is, you don’t necessarily have to get mad. But if your winning idea does not fill a need or fix a problem that frustrates customers, then it won’t make a successful business, and by successful I mean one that makes millions by delighting those customers. Your business does not have to be the first to market to succeed. You don’t have to be the only company offering your product or service. But you must fill a need or delight customers in a specific way and do that one thing better than anyone else (for more on this, see “What Makes a Winning Product or Service,” pages 178–81).

For instance, Southwest Airlines was not the first airplane service, and within a year of their launch, with nothing much to distinguish it, the airline was in trouble. They had posted a net loss of $1.6 million, and the company was forced to sell one of its planes. Desperate to keep up, Southwest’s vice president of ground operations, Bill Franklin, was tasked with finding a solution. The answer he came up with was simple but brilliant: Unload and load passengers faster than the other airlines, and get the planes right back in the air. So Southwest’s “ten-minute turn,” as it came to be called, was born, and they effectively turned the planes like an assembly line. This winning idea was born of adversity, but it worked because it served customers better.

The story of Google’s founding is another tale of success born of frustration, but of a different kind. Two Stanford University doctoral students — Larry Page and Sergey Brin — had created a search engine algorithm (called PageRank), but according to Luis Mejia, Google’s associate director of technology licensing, “The inventors did not want to do a startup company — they wanted to finish their PhDs.” Mejia worked with the pair in the mid-1990s and says, “We spent half a year trying to market [the technology] and find licensees. But nobody really expressed much interest.”

After a few “road shows,” Mejia says, Page and Brin realized no one understood what they were doing. “So it was really out of frustration that they decided to start a company. . . . In that respect, it was chance.”

Mejia says the pair — who never finished their doctorates — did not have a business model, “but then a lot of things just sort of fell into place. Maybe that’s where serendipity comes in. . . .There is a chance we could have licensed it to another company for a very nominal sum of money. But it isn’t clear that they would have done anything with it. And there probably would be no Google today.”

Occasionally, moments of insight lead entrepreneurs to solve problems people haven’t yet realized they have.

Ask Yourself: What Makes Me Mad?

Once I realized the “secret” to startup success, I reviewed my life for the things that made me mad. I drafted a long list, but one in particular made my blood boil. For years I had been frustrated that the company I worked for had created a product that could successfully treat a rare disease, but then they spent no money making physicians and patients aware that this solution existed. Though this sounds callous, it is typical of a lot of large businesses. Originally a small, private company that could make scientific and patient-focused decisions, it had become so successful that it went public. Now the company had to answer to shareholders, who generally prefer to increase profits and dividends and don’t have much tolerance for potentially risky or low-revenue strategies.

The company estimated that less than two hundred people in the world suffered from this rare disease, and the cost of making all physicians aware of both the issue and the solution was considered exorbitant compared to the potential return from sales. Three times I proposed plans to justify an investment, and three times I was rejected and warned to focus on selling our other products. Yes, this made me mad.

My idea was born. I had never started a company before or raised finances, and I knew very little about research and development, but the unfairness of the situation motivated me to want to do something for patients suffering from the disease.

Take Notes: Make a List of Problems

Every time something gets under your skin, make a note of it. When you hear yourself or others complaining about something being wrong, jot it down. When someone expresses a wish for something that does not yet exist, scribble the request on a piece of paper.

Writing things down is important. Don’t be fooled into thinking that making a mental note is all you need to do. It is scientifically proven that people who physically write somethin...

Table of contents

• Cover
• Title
• Copyright
• Dedication
• Contents
• Introduction
• Part I: Starting — The Global Pioneering Spirit
• Part II: Surviving
• Part III: Thriving
• Endnotes
• Index
• About the Author