Three things entrepreneurs learnt in 2019
Thesis: Well, that was quite a rush! The end of the year signals the end of the decade - making it the perfect time for entrepreneurs to look back and see what did and did not work. Here are three things which I learned in 2019 - and believe all entrepreneurs should keep these phenomenons in mind moving forward.
Timing is everything
First, let’s launch in with something that is perhaps not a new idea but something that certainly made a difference in 2019. The time of release makes or breaks your success - and this was keenly felt over the past 12 months. Simply because you are the first does not mean you will come out on top. Rather, the timing of the release and state of the market dictates success.
Case in point: The General Motors EV1. This electric car came out in the mid-1990s - far ahead of the crowded marketplace of today. However, the market reaction was close to nothing. Fast forward to today and brands like Tesla are starting to finally break the mould of renewable energy vehicles. Clearly, being the first does not always mean being the best.
Let’s also look at cryptocurrency. These digital monies powered by blockchain earned plenty of hype, but the market is yet to fully adopt it. This is why so many promising cryptocurrencies become failures - the public market still fails to fully grasp the concept. No doubt the countless applications of blockchain have a future, but cryptocurrency perhaps found its way to market before its time.
The product helps
Second, this year only reiterated that making great products is a surefire way to success. Why? Well, consider the marketing of the said product. A mediocre product will require much more marketing spend to get the product moving.
However, a great product will have the market effectively sell it for them. This is what Tesla did right with their truck this year.
The truck’s modern design and eye-popping functionality worked more than any advertisement to get stakeholders on board. In fact, the brand earned $10.5 billion in pre-orders with $0 in ad spend, leading some commentators to note that Tesla is disrupting more than the car market - it's disrupting the marketers.
Let the numbers speak
Hype is a fickle mistress. It can inflate valuations and expectations without justification - a dangerous position for any startup. Insane valuations led to the downfall of one of the biggest startup success stories of modern times in WeWork.
The hyperbolic interest cost investors plenty of many. In fact, the effective marketing of WeWork saw the company valuation ten times more than its closest competitor. Instead of valuation, the rise and fall of WeWork should teach entrepreneurs and investors to look further than valuation. Values can be inflated, but true business health indicators cannot. Be sure to “look under the hood” before purchasing buying into wildly expensive Initial Public Offerings.
Time will tell if entrepreneurs have learnt these lessons for 2019.