3 Things Small Business Needs to Learn from Tech Entrepreneurs
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- 3 Things Small Business Needs to Learn from Tech Entrepreneurs - April 8, 2016
College student CEOs, overnight success stories, startups that turned traditional industries on their heads: it’s no wonder the world has taken inspiration from the energy and growth of the startup world. But for the average small business owner, it can be difficult to pick out lessons from their successes. Much of what works in the world of entrepreneurship just doesn’t translate into the world of most small businesses.
Luckily, there are plenty of lessons small business owners can learn from the tech field. Many of these are lessons that will be crucial to surviving and thriving in the coming years. From thinking about industry-disrupting techniques to managing liability through new business models or fidelity bonds for your employees, there’s more small business owners can do than they realize.
1. Manage Liability
Okay, so you might be thinking that this is the core of the modern corporation, but a variety of modern startups have taken liability management to a new level. Two prime examples are Uber and Airbnb. What is it that makes these companies unique?
To start off, their business models are fundamentally built on shifting liability away from themselves. While there has been serious backlash against this technique, it’s allowed both of them to disrupt their respective industries by pushing liabilities onto people who provide their services, but aren’t their employees, while still profiting handsomely.
So how can small business owners utilize this technique? First, by realizing that smartphones open up the possibility for entirely new business models that address seemingly mundane and standardized industries. It also shows a huge potential for reducing liability.
Even if you can’t craft a new business model from scratch, tools like employee dishonesty bonds can make a substantial difference in your liability. These protect your business from its own employees in cases of theft, embezzlement, and other dishonesty-related problems. You can follow this employee dishonesty bond guide to learn more.
Granted, it’s much easier to talk about innovation in liability reduction than to do it; that’s why you should also check out some of the well-honed startup techniques specifically designed to help you experiment like an entrepreneur.
2. Experiment Ruthlessly
Business can be afraid to experiment. That’s understandable, especially in small businesses, where trying something new can be an expensive and risky proposition. This tends to breed an inherent conservative outlook in many business owners. The startup movement doesn’t have this fear; if you take inspiration from tech entrepreneurs’ techniques and success stories, it’s clear there are fewer and fewer reasons to hesitate.
First of all, it helps to be very public about what you’re considering. Everything from blogging to social media to using sites like Quora can help harness the power of the crowd to gain insights and perspective long before you put any money or resources on the line.
The next startup technique is to test your idea in a more tangible way. This doesn’t mean committing fully just yet: where possible, try experimenting with several micro-versions of your idea. This will allow you to commit the minimum amount of resources to pre-testing, while still giving you the chance to observe and refine.
Once you’ve found what works, you can put everything into that idea. In short, find which version of tech entrepreneur Eric Ries’ ‘fail fast’ mantra works for your particular small business and run with it. Even public sector workers are looking into how they can apply these ideas – so why not you?
There are also unique ways of thinking about value and profits that small business should really take notice of.
3. Use Value-First Thinking
To many small business owners, this may sound a bit counterintuitive, especially after we’ve discussed how to reduce the resources used for experimentation. But in the startup world, companies have found their greatest successes by providing value first and monetizing second.
This answers one of the main questions small business owners often have about how the world of tech startups functions: How does anyone make any money in a world where nearly everything is offered for free? Value-first thinking is the answer. Everyone from Facebook to Netflix leveraged early losses for the sake of growth: purposely not pursuing profits until they had a solid base of committed users.
It’s a questionable strategy for anyone focused on the risk aversion techniques here, but that doesn’t mean it can’t be useful for small businesses, particularly in the area of customer loyalty. Bear in mind that providing value doesn’t have to be expensive: even blogging or creating other online content can help you develop a loyal and trusting customer base without directly bringing in any revenue.
All three of these tips come down to keeping an open perspective and inquisitive mind. Don’t fall into a trap of seeing success in a place like Silicon Valley and assuming it has nothing to do with your business: there’s always something that can be learned, so get learning and start thriving.