The context for doing business and creating new ventures in Thailand is growing. What is a startup? What is called a business? And how are these two different? Should a startup, which we call a "startup," learn from large companies, which we call "corporate companies"?
A book titled "The Startup Owner's Manual" will show you how to manage and operate a new business to achieve success. The job of a startup is to find its business model and ensure the long-term operation of the company. You must strive to create your first product, then give it to a group of people to use to get feedback from those users. It's not certain that what you produce will be immediately accepted by the market.
If you want to understand the essence and special characteristics of a startup, you must forget about the management and strategies used by large companies. You must learn to find a suitable path for yourself.
There are two authors of this book, both of whom have extensive experience in the startup sector. The first is Mr. Steve Blank, who has started eight businesses and has accumulated excellent experience in his field. He shares this knowledge to help the next generation of entrepreneurs learn how to lead a startup to success. The other author is Mr. Bob Dorf, who has started seven businesses and has invested heavily in the startup sector.
These two came together to create the book "The Entrepreneur's Bible" to guide modern entrepreneurs on the many shortcuts in the startup industry. They say that an entrepreneur's success rate depends on the number of times they read this book. This means he places high value on the work he put into creating his book; the more you read it, the more clearly you will understand what the author wants to show you.
The main content of this book wants to tell everyone how to operate a startup, what they need to do, without copying or using the methods and strategies of large companies. Because a startup is a type of small company. And what's scary is a small company with big-company disease. In another book titled "Rework," it was also mentioned that small companies and large companies are two different types of businesses. They must have different methods of management, operation, and strategies for market entry.
Coming to the first important point. This book states that a startup is merely a founder's hypothesis, which has not yet been proven to be accepted by the market. Whether his startup can succeed or not depends on to what extent he can turn his dream into reality. And whether the product or service he created is accepted by the market. This means, is the product good enough for customers to pull money out of their pockets to buy it?
A startup is not like a regular business. The business model in a regular business is clear. The goal of a business is to make a profit. Buy in, sell out, and put the profit in your pocket. Customers already exist, products already exist. What you need to do is sell well and make a profit.
But a startup is not the same. Its goal in the initial stage is not to make a profit. Its goal is to use the shortest time possible to prove whether the business model you are creating can work or not. Because everything is still in a state of uncertainty. It's just a business idea that came from a founder's dream. It's not certain that customers exist in the market, nor is it certain that the market will accept what you've produced. And the business model isn't guaranteed to make a profit either.
What a startup needs to do is not to make a profit immediately. It is to turn its idea into a tangible form, put it on the market, and see if customers are willing to use what it has created or not.
The bad news is that what is unavoidable for a successful startup is countless failures. Failure here is not the final result, but a temporary failure. It is a strategic failure. This means that entrepreneurs must know how to fail. Learn lessons from their own failures, then adjust their activities and strategies to find a path to success. Another point is that a startup's strategy must be the opposite of what most people think. A contrarian strategy means experimenting, then adjusting your own activities when you realize it's a real mistake, and you will make adjustments later. Because you know that creating a perfect strategy is not an easy thing. A contrarian strategy can be said to be: when we are pushing our startup forward, at the same time, we should know what is the wrong path and what is the right path to be able to find a path towards success and be able to generate long-term profits.
The second point states that the founder of a startup must get out of their office and meet customers to understand their needs firsthand. What is factually true about customers is located where they work and where they live. As a founder, you must leave the workplace to meet them and understand their needs. This stage is called market research.
This book emphasizes many times that this market research must be done by the founder personally, not by using staff to do it for them. When starting market research, we must find the problem, understand the needs, and the complaints they have about a certain problem. What do they expect and what kind of solution do they want?
First example: on the internet, there are many websites. But each website focuses on different sectors. If you want to create a website that is different from others, is it an easy thing to do? Suppose you want to create a website only for nurses who work in hospitals to use. So they can discuss with each other, give feedback to each other, or exchange information and experiences they have in this field. Then, you created a great product for them to test.
The founder must get close to the users, who are the nurses, to know what kind of product they want, then present the product you've made for them to use, and write down the detailed problems, activities, and their reactions to your product. This stage is called user testing.
Second example: if you want to create a program to facilitate the work of a financial institution, then doing research on the work of the board of directors who work in the bank is a very important thing that cannot be overlooked. You have to observe their entire workday. How do they complete a full day's work? What software do they use to record financial reports? How much time do they spend, and what problems do they encounter? Then, you must stand in the shoes of a manager, stand in the shoes of a bank owner. How would you feel about the program you've created?
Then, you have to go and research the technology department in that bank. At that point, you will get a lot of useful information before starting.
Third point: Start creating the product from a small scale and adjust it as quickly as possible according to the needs of the users. You shouldn't aim for a perfect product yet. You should work on the most important points first. Then, take the achievement you just created to the target customers for them to use and test first. Collect data and information that users have given you feedback on. Through what the users want, you come to improve your product little by little, making it better and in line with what the users want.
Third example: General Electric is a giant electronics manufacturing company from the United States. Recently, the company has researched and created a new energy source, the sodium battery, which is a technology that has never existed before. Speaking of the operations of General Electric, which is an old company with a history of over 130 years in the world, it certainly has high expertise in managing and operating a large company very well. But researching and creating a new product is like creating a new startup. They need new thinking, a new business model, to be able to push this new product to the market.
Luckily, General Electric did not use its old methods. They came to consult with the author of this book, Mr. Steve Blank, to analyze and arrange a strategy for General Electric by using his method, which is to create small products and let others use them for testing first. Therefore, General Electric considered this new product research team to be like a startup team. They did not use the strategies and methods of a large company type.
They went out of the office to markets in many countries to research the market situation and the real needs of users. At that time, they collected a lot of relevant information about how users use the sodium battery, how many times they use it per month, and other feedback from users, so they returned to modify their product to match the needs of the customers. When the sodium battery was launched on the market, it was very well received. This product was on the market for less than half a year and was completely sold out.
Fourth point: The market determines the life or death of a startup. Before entering a market, you need to know what kind of market it is. Does your product or service enter an existing market, or a market with competition, or is it a completely new market? Then, you can arrange a strategy for market entry later. How can you know what kind of market we are entering? You have to make a judgment based on your product and the market you will enter. If the market you are entering has similar products and many competitors doing similar things to you, it means you are in an existing market. Customers and products have a very dense traffic in this type of market.
And if that market has a number of users who are willing to spend money to buy products or services that are not of good quality, but people are still using them. You are in a market context where you have to segment and take your market share and create a product or service that is even better than this. Because there is a need here, but no one has done it well yet.
And if you enter a market with no clear customers, you don't know where the customers are, and there are no competitors. Then you are in a new market that you have to create yourself. Another type of market is called a clone market. It is a market where there is no established business model, and they have copied business models from developed countries, such as the business model of Amazon, the business model of Alibaba, or companies like Airbnb, and so on, to do in Cambodia, for example. And now they call Cambodia a clone market because they are doing the same things that have been done successfully in developing or developed countries.
Fifth point: The goal of a startup is to be able to generate profit and find its own business model before it runs out of money. We have already mentioned that a startup is different from an established business. The KPIs that determine the performance of a large company include profit, assets, and cash flow. All these KPIs should not exist in a startup. There are different methods for evaluating and measuring performance for a startup.
What is most important for a startup is to be able to prove that the founder's vision can become a reality. Furthermore, financial reports are not very important for this type of company. But at the very least, you need to know the level of your spending. The money you have left, whether you can continue operations for how long until you can generate a profit. As well as managing income and expenses to maintain short-term operations. Remember that a small boat is easy to turn. The team of a startup should not be too large. Even if you are a wealthy person.
Mr. Jeff Bezos, the founder of Amazon.com, said that if your team can't be fed by two pizzas, it means your team is too big. You only need two or three co-founders and a few technical team members to make your product or service bear fruit. You don't need to announce and look for a work team, create a sales team or marketers, create a finance department or any government relations department. When you have clearly found your business model and it can generate a decent income, then use your cash flow or go to investors to get money to create a work team, register the company, and start operating as a standard company.
Here are some of the key quotes from this book. First: A startup is just the dream of a single founder. Whether it can succeed or not depends on whether that founder can make their dream a reality.
Second: The path that a successful startup must cross is countless failures. These failures are just temporary setbacks.
Third: There is no such thing as a perfect strategy. Entrepreneurs must learn to use a contrarian strategy. Experiment with doing many wrong things, then come back to adjust their direction, in order to find a successful path.
Fourth: A new market is where you have to spend the most money. Because a new place has no competitors and no market. You have to spend money to create a market yourself.
Fifth: The goal of a startup is to find a correct business model that can generate profit. Before you find that correct business model, you must maintain a reasonable cash flow to be able to ensure daily operations. When you can generate your first profit, you can play big. You can seek capital, find investment to expand operations and capture market share as quickly as possible.
The above are the important key points from the book "The Startup Owner's Manual." I hope this book will help show the way and assist the spirit of the next generation of entrepreneurs who are starting a business or a new venture, or those who plan to enter this field.