I'm the founder of my current startup. The new startup is an opportunity to leverage my industry expertise twice. I would get shares in the new startup, but not have control. Obviously the idea would be to create a close partnership between both startups (they are quite complementary). I'm afraid of two things: 1/ This new startup may become a direct competitor one day. The industry is very big, with the largest player having only about 5% of the market. Still, our two startups are two of the very few players with an innovative concept in the industry. 2/ The insights that I transfer to the new startup, may spill over to the rest of the industry more easily (as I have little control), reducing our competitive advantage. How could I craft this partnership so that my two fears can never materialize?
I share those fears that you have mentioned, and if I were you, I would not take a risk because a lot will be at stake if anyone of your fears were realized. Rather than looking outward to acquire new forms of capital, this post focuses on taking full advantage of your existing business asset. Explore how to rework them so that they better serve your operating goals, customer needs, and emerging needs new prospects may have. Where you have already invested a lot of effort and money to build and improve an asset, I suggest that you consider new ways to leverage it instead of starting from scratch again. When you first start, you must create several assets, but as you become established, you can shift more of your efforts to renewal and re-purposing of existing assets. You do not have to reinvent the wheel, especially when the spokes, axle and schematics from the last wheel are still lying around. Build on what you have accomplished, on successful customer relations you have fostered, and on investments that have paid off. Look for additional growth and profit from the efficient and effective use of your established assets. When determining which assets could be leveraged or repurposed, ask yourself:
a. What would allow you to create new offering?
b. What would allow you to scale more rapidly?
c. What would allow to lower costs and increase profits?
d. Where are you getting inquiries?
Money is easy to repurpose. It is almost instinctual for small start-ups to look for ways to leverage cost and increase profits. Just beware of relying solely on cost reduction and not looking at faster and higher quality resources. Leveraging equipment and process capabilities gets a bit harder.
Sometimes you develop a technique or resource for one purpose, but then realize it could be better applied in a different way. Maybe a customer “misused” the product and now you have discovered another need to market. Or maybe multiple customers made the same request for an additional or different offering. Look at areas where you are getting inquiries and work backwards from what your customers value.
Another way of figuring out what to leverage is to look at frequency and dependency. Create quarterly review where you take stock and assess your various working capital. Look at how your assets fit with your business model and ask yourself:
a. How has this helped in the last year or two? In the last quarter or two?
b. Do you see continued interest?
c. How does this fit with where you are trying to go?
d. How recently have you used this particular template/building block/piece of content?
e. How frequently do you rely on it?
If you are frequently using something, or frequently referring to something, it makes sense to try and squeeze as much utility out of that something as possible.
Let us not forget to leverage social capital. Accumulating expertise and developing trust take a long time. Once you have built solid relationships, work to maintain and leverage them rather than starting from zero all over again.
Maybe you have operated in one industry, worked with a set of people, pooled your knowledge together, but now they have gone to another company and you are building a start-up. Whether or not everyone is still working within the same industry, it helps to reach out to people you’ve shared a success story with and ask if there is some way their capabilities could work in your firm/industry. Start sifting through LinkedIn contacts and think in terms of “calling in favours.” Worst case scenario: their capabilities no longer fit with your goals, but they might introduce a new connection. Be constantly aware of your environment and practice taking stock regularly. The temptation is to always be ahead of every innovation wave but that is just not realistic. At the same time, you do not want to lag and risk obsolescence of your product or technique.
My advice to you is to ride the waves. It is hard to see the future coming, but change is a constant. Keep an open mind and integrate new technology and processes into your business whenever you can.
Besides if you do have any questions give me a call: https://clarity.fm/joy-brotonath