A lot of what it takes to be a successful entrepreneur is the same today as it was 30 years ago—grit, vision, initiative, willingness to take risks. But how we start and run a business is very different. “We used to do market research, write a business plan, seek money and resources, build the product—and then execute the plan and hope we were right,” says Mark Coopersmith, senior fellow of entrepreneurship at UC Berkeley’s Hass School of Business and coauthor with John Danner of The Other “F” Word: How Smart Leaders, Teams, and Entrepreneurs Put Failure to Work. “Now we start lean and iterate quickly, learning as we go and building on the fly. It’s no longer a linear and segregated process.”
Given the changed environment, we ran some old business axioms by Coopersmith. Here’s why they’re no longer true and how he’d update them.
Outdated: Bigger is better.
Updated: Nimble is better.
“One reason some otherwise-promising startups die is that they are able to raise a lot of capital and they actually grow too big too soon. This is called premature scaling. They aren’t able to adjust their product or selling process to fit the market, and they exhaust their resources before they can.”
Outdated: If you’re not passionate about what you’re doing, you won’t be successful at it.
Updated: Passion is not enough.
“There are a lot of schools of thought about passion. A colleague of mine says it’s over-rated. I would say it’s not sufficient. I see success as a Venn diagram where passion, expertise and market opportunity overlap.”
Outdated: If you can’t measure it, it doesn’t matter.
Updated: Strong metrics can help you avoid and leverage failure.
“In this data-driven world, start-ups can operate like a real-time experiment, where you’re constantly measuring and determining if you’re moving in the right or wrong direction. It’s essential to use metrics to identify your mini-failures so you can avoid big failures—and ultimately have a positive outcome.”
Outdated: Don’t jump ship before you hit the iceberg.
Updated: Take a kayak instead of a ship and you won’t get hit.
“We always knew the icebergs were out there. But because of the old way of doing things, a lot of companies would still hit them. Now, we start testing the water much earlier, and we’re in faster and more agile boats.”