It’s guest post week here on New Venture Mentor and today we’ll hear from Gemma Reeves about the pros and cons of basing your startup on the trends. Here’s Gemma:
Most people choose business ideas depending on what is popular at that time. This might seem like a good strategy but it also has its downfalls. Our friends over at www.findmyworkspace.com discuss the pros and cons of basing your startups on trends.
As a wannabe business owner, I’ve encountered the word “startup” frequently when I did my research before setting up my business. When the cofounder and co-CEO of Warby Parker, Neil Blumenthal, was interviewed by Forbes Magazine, he defined startups as “a company working to solve a problem where the solution is not obvious and success is not guaranteed.” Further into my research, I found out that startups are usually classified as businesses that have the potential to drastically grow by offering novel solutions and opportunities unbounded by geographical constraints. This differentiates it from a small business such as opening a café or a fashion shop that only has a local reach. Although it shouldn’t necessarily be technologically inclined, a startup harnesses the freedom and power of technology to go beyond the borders of its physical base. Most importantly, a good startup promises relevance that can be sustained into the future.
This last characteristic definitely piqued my interests. If I find that unique and sustainable solution to a need or want that hasn’t been addressed yet, I could hit it big. So I started the next step of my research and looked for startup trends. There’s a long list of ideas and successful examples out there. I could easily pattern my startup with the up-and-coming trends that business sites and magazines talk about. But would that be helpful or will it slow down my success rate? What are the benefits and disadvantages of basing my startup on the latest trends?
(1) Advantage: There is so much potential when you invest on the latest startup trends.
If you choose to ride the startup bandwagon, it is best to invest in a company answering the most pressing needs of the times. The most in-demand companies are on top right now because a lot of people want or need them, so there is a lot of room for financial growth and expansion. For example, drones are really popular right now for a lot of reasons: for recreational purposes, for security, for business (such as using drones for photography), for research and information. This means that there is a wide market that will embrace a startup designed to give advice, information, accessories, and assistance in repairs. Investing in a startup with such a wide audience in its infancy stages will allow you to have more control of the operations and will enable you to develop your entrepreneurial skills.
(2) Advantage: Startups have flexibility.
Okay, you can probably call it an excuse, but startups have flexibility that traditional businesses do not have. Even If you do have a business plan and solid strategies, you do not have to answer to the demands of a governing board, which gives you some leeway in how you will run the show. When things go wrong, such as a decline in demand because of a better product or a stronger competitor, traditional businesses have to deal with the problems that crop up and sort them out to bring the expected stability in the company. However, as a startup, it will be easier for you to refocus, recalibrate and rebuild your business.
(3) Advantage: You build a better team.
The relaxed and more casual atmosphere in startups encourages openness and camaraderie that facilitates creativity and free flowing ideas.
(4) Disadvantage: Bigger risks and bigger loses.
What if your idea grows stale? What if someone else found a better solution to that need or want that you have been trying to address? What happens when customers don’t appreciate your products or services? You may be flexible, but that doesn’t come without corresponding losses to you and to your investor. You can always start again from the ground up, but you’ll have to work extra hard to convince an investor to come on board if you’ve already experienced being a flop.
(5) Disadvantage: Being young and inexperienced.
Startups appeal to the young and daring who shun the structure of traditional businesses. The young ones might be bubbling up with bright ideas, but in order to sustain any business, whether a startup or a traditional one, needs discipline, maturity and perseverance. These characteristics are often lost on impatient and rash young professionals who are overly eager to prove themselves to the world.
(6) Disadvantage: Finding employees who are willing to take the risk with you.
The flexibility of startups is really a double-edged sword. While giving you more room to commit mistakes, it also provides you with the right excuse when you make a mistake. This instability at the beginning could be a major turnoff to potential talented employees. Lack of funding could also means that you will not be able to offer as much salary and benefits to your employees. It would be a challenge to find someone who would be willing to make a sacrifice for your business.
These are some of the things that I’ve been weighing on ever since I decided to become an entrepreneur. I am still trying to sort out if I can dare to invest and work for a startup. I am hoping to be encouraged by the advantages and challenged by the disadvantages of basing my startup on the latest business trends.
Gemma Reeves is a seasoned writer who enjoys creating helpful articles and interesting stories. She has worked with several clients across different industries such as advertising, online marketing, technology, healthcare, family matters, and more. She is also an aspiring entrepreneur who is engaged in assisting other aspiring entrepreneurs in finding the best office space for their business. Check out her company here: FindMyWorkspace