Thursday, 8.41pm Sheffield, U.K
The entrepreneur always searches for change, responds to it, and exploits it as an opportunity. – Peter Drucker
I came across a paper by Fine et al., (2022) that looked at operations management for entrepreneurs. Entrepreneurs have been ignored by researchers. Most research is done in large companies and the standard subjects taught in universities focus on the needs of mature firms with large supply chains and complex operations. Startups are different. They don’t follow a formula. Some find customers and then figure out operations. Others do the reverse.
People who love startups will identify with the metaphor of a small group hacking through dense jungle. You need guts, courage, a belief in yourself, and the ability to withstand mosquito bites and the odd tiger attack. Cash is everything. Speed of movement is more important than quality. You want a determined team that can improvise on the fly rather than waiting for direction. Good communication, quick decisions, and getting away from charging elephants quickly is vital for survival.
At some point, the startup founders get through the jungle and find a place to make camp. They might stay here for a while. They might even create a village. But how do you handle that transition effectively? There are at least 10 things to think about.
1. Process
You need to go from ad-hoc one-off things to repeatable activities. If you follow a series of steps to get things done, then you can reflect on those steps and make them better over time.
2. Professionals
It’s time to get the professionals in. Find some “grown-ups” that wear suits and manage things and put them in charge.
3. Culture
This is how people behave when you aren’t around. Culture comes from the top. They way the boss behaves is the way everyone else acts.
4. Automation
Computers should make your life easier. Learn how to use them well.
5. Segmentation
Create a package of work that you can sell that provides a bundle of benefits to a customer. Do one thing and do it to completion. When you’ve tapped your market expand carefully without damaging your first offering.
6. Platforms
It works for some businesses if you’re lucky or a first mover or have lots of money or are lucky.
7. Collaboration
Leave your ego at the door and get good at working with others. Relationships will help you grow faster but you’ll have to share profits with your partners.
8. Capitalization
If you need money, you’ll need to share equity and give up control over your business. Pick your funders carefully.
9. Replication
Once you have a working model, you’ll want to do this over and over again, either the same way or with some customisation. Think about that.
10. Evaluation
Take time to check where you’re going. Are your numbers on track? What’s the voice of the process telling you? Hope this sparks a few thoughts.
Cheers,
Karthik Suresh
References
Fine, C.H., Padurean, L., Naumov, S., 2022. Operations for entrepreneurs: Can Operations Management make a difference in entrepreneurial theory and practice? Production and Operations Management 31, 4599–4615. https://doi.org/10.1111/poms.13851
