By Kelly Luo, March 3, 2017
The China Europe International Business School (CEIBS) is a globally top-ranked business school located in Shanghai, China. CEIBS had an exclusive interview with Steve Hoffman, a Silicon Valley investor and serial entrepreneur about key questions entrepreneurs ask.
Here are some key takeaways for entrepreneurs:
Race Against Time
To start a company is like racing against time. In Silicon Valley, we insist on a belief that we want to see the answer as fast as possible. You need to set a very short schedule for a product cycle so that you can test quickly.
Challenge the Status Quo
Never take anything for granted. As an entrepreneur, to make a change in an industry can result in a significant transformation of the sector. For example, mobile payment has changed our traditional ways of payment and offers customer convenience and security.
Innovation – Start Small
Focus is one of the critical success factors for innovation. YouTube was a file sharing platform at the beginning. If it started as a large video sharing platform, it might be difficult to test the concept. In fact, the success of any company lies in a small discovery. Google was designed to be an index system of scientific papers, and then expanded to become the world’s most popular search engine.
Nothing to Lose
The reality for an entrepreneur is that you have run a small business with tight budgets. Not many people know who you are and therefore you have nothing to lose. But the traditional big companies may indeed lose the game. In the United States, the main job of a CEO at a large company is to grow revenue and they need to maintain the status quo and control all aspects of the company. An entrepreneur, on the contrary, can make some changes in a sector to provide cheaper and higher quality product/service to compete with the big companies.
Let’s take Skype as an example. Skype was founded in Estonia to develop voice transmission technology. Many telecom operators already mastered the technology at that time, but they did not want to sacrifice the lucrative existing business – the long-distance call service. Skype seized this opportunity and earned billions of dollars.
Team – The Smaller The Better
In general, the bigger the team, the harder it is to build a creative environment. With the growing team size, an entrepreneur will become a manager rather than creator as you have to build an organizational structure and assign different tasks to each team member. For startup entrepreneurs, it is better test the sustainability of its business model which can be done with 3-5 people.
Observation – A Necessary Skill
For an early start up, you need to observe what’s happening around the world and find out things that others haven’t discovered. Steve Jobs said that customers will never tell you how to innovate. This does not mean customers don’t need to be involved in the process. Entrepreneurs have to identify the real needs of customers, not what they said.
Adopt a Long-Term Plan
The most successful companies such as Google, Alibaba, and Amazon do not focus on how much money they can make from their customers, but how to attract their attention and lock them in their ecosystem as long as possible.
You can watch the interview videos about the following topics:
The 3 qualifications of successful entrepreneurs
The three mistakes to avoid for entrepreneurs