Entrepreneurship is often born of founders’ sheer frustration with the status quo. One class of clear business opportunity, which wouldn’t exist in an ideal world, is created by the service that seemingly makes it as difficult as possible for potential paying customers to make it take their money. This sort of chronic customer dissatifaction flies in the face of both common sense and economic theory, yet it persists in countless contexts.
When it comes to inefficient outcomes and dissatisfied customers, it’s hard to beat the U.S. domestic airline industry. (In fact, it’s literally impossible; accordingly to a 2011 customer satisfaction survey, the airline business tied for last place out of 47 industries.) Don’t get me wrong, I’m grateful to get online at 35,000 feet as I write this. Yet in classic tone-deaf fashion, airlines have gone about implementing in-flight WiFi connectivity in such a customer-hostile fashion that it’s almost as if they’re competing vigorously to make things as difficult as possible for their most valuable customers: Frequent business travelers who are motivated to pay for WiFi to stay productive even on relatively short flights. Read more
I’ve been on both sides of this event, and believe me, it is not fun. But it is, unfortunately, a virtually inextricable part of the entrepreneurial life, and what matters most (at least in the US, where entrepreneurship—and even valiant failure—is celebrated rather than reviled) is how you deal with it.
I am one of the more upbeat, positive-thinking people on the planet, but when my first venture-backed company went into Chapter 11 it was perhaps the most traumatic day of my life. I felt that I had personally failed (after what had, until that point, been a life of almost unbroken success), that despite my best efforts and a decade of non-stop work I had betrayed those who had had the faith to back my vision with their cash, and that I had let down my employees, my family and my customers. I was devastated, and felt that I would never again be able to either hold my head up, or rediscover the passion and self-confidence that are critical to success as an entrepreneur. Read more
The lack of rational analysis about equity crowdfunding is remarkable to me. Sure, it sounds like an easy source of startup capital that should lead to happy entrepreneurs, delighted investors and job creation galore. However, this will likely not be the case. Few pundits seem to have the depth of knowledge and foresight to look far enough down the equity crowdfunding road and offer convincing predictions of the issues and problems that may arise.
Fortunately, Daniel Isenberg has provided just that in his HBR Blog, The Road to Crowdfunding Hell. Don’t miss it!
Entrepreneurs tend to focus on opportunity rather than risk, and rightly so. As Steve Blank has written, at its core, a startup is an organization formed to search for a repeatable and scalable business model. In the lexicon of the lean startup movement, once “product-market fit” has been achieved, the focus shifts to scale and execution as the startup matures into a growth company.
In a sense, risk and opportunity are two sides of the same coin to early stage startups. The huge risk that eclipses all others is that the product or service being offered simply won’t succeed — there is no product-market fit, at least at numbers that would make for a financially viable business — in which case (assuming competent execution) the perceived opportunity, viewed broadly, wasn’t really there to begin with. Read more
The verb “to disrupt” in all its forms is rightly popular in the startup world. To many entrepreneurs, few things are as personally satisfying (or as lucrative) as disrupting an entrenched, complacent, monopolistic, inefficient or stagnant market in ways that often empower consumers and producers alike. Consumer Internet and mobile technology businesses continue to be rife with opportunities for disruption.
On March 8, 2012, the U.S. House of Representatives passed the JOBS Act, becoming the subject of much chatter at this year’s South by Southwest Interactive (SXSW) conference that began the following day. This bill is the latest in a series of efforts and initiatives in recent years intended to disrupt the traditional methods and markets for investment in, and capitalization of, emerging growth businesses. Boosters can be found all over the Web proclaiming a nascent crowdfunding revolution that will ensure prosperity for entrepreneurs and mom-and-pop investors alike. Read more
Path, a high-profile San Francisco social media startup, ignited a firestorm this week with the revelation that its mobile application uploads users’ entire iPhone address books to the company’s servers without their knowledge or permission. The practice, discovered by Singapore developer Arun Thampi, provoked outrage within the user community and was broadly condemned by the tech business press. Jon Mitchell at ReadWriteWeb wrote that the upshot of Path CEO Dave Morin’s initial response was “We did it first, and we’ll ask you for permission in a little while.” The company quickly apologized on its corporate blog and, as I write this, plans to push out an updated version of the iPhone app to quell users’ privacy concerns. Read more