Many entrepreneurs I know don’t realize that the language they learned in the corporate world, or even their recent MBA class, won’t get them ahead in the startup world today. Even if you have heard some of the new terms but can’t explain how, when and why they are relevant to your startup, you may be in jeopardy. As a reality check, try this quick test of your entrepreneurial savvy.
See how many of the following “new” entrepreneurial concepts you recognize and can explain in terms of impact and value to your startup. See how many you have personally experienced already or are currently mentioned in your business plan:
- Crowd-sourcing equity. This is a term indicating the use of “crowd appeal” to get money from interested people on the Internet for a share of your company. For years, sites like Kickstarter have offered rewards and pre-sales for crowd investments, but real equity won’t be legalized for people other than accredited investors until sometime this year.
- Super-angels. Super-angel investors (like Mike Maples Jr.) are a new category of investors, closer to venture capitalists, who are perceived to be more sophisticated, insightful or well-connected in the startup community, particularly with respect to technology companies in Silicon Valley and other technology centers. They are also called micro-VCs.
- Minimum Viable Product (MVP). For startup new product development, this is a strategy used for fast and quantitative market testing of a product or product feature. MVP was popularized first by Eric Ries for web applications, and it suggests the minimum necessary features to allow the product to be deployed and get feedback.
- Startup accelerator. As opposed to a startup incubator, which typically deals with startups barely hatched, an accelerator focuses on a later stage startup with an existing product and proven business model looking for rapid growth. This usually involves more attention to organizational, operational and strategic challenges.
- Osmosis marketing. This concept promotes the idea that any brand’s image–and resulting success–is achieved more effectively through the osmosis of pervasive blog buzz and tweet-trending than traditional marketing methods. Osmosis marketing is the hot new term for word-of-mouth advertising.
- Social mobile web. Responsive web technology that resizes text and images to fit any screen is the norm with new websites. As tablets are replacing magazines on your coffee table and smart-phones are replacing portable computers, you need to make sure that your content is able to be viewed, shared and bought on the newest[LS3] mobile devices.
- Gamification. This is the use of game-thinking and game mechanics in business applications for marketing to enhance user engagement, accelerate revenue flow and expedite application learning. Rewards range from becoming the “mayor” of an entertainment location via FourSquare, to winning badges through a Badgeville campaign.
- Startup pivot. A pivot is a quick change of direction or strategic correction by a startup, based on customer feedback or changes in technology and the marketplace. Over time, this pivoting may lead entrepreneurs away from their original vision but not away from the common principles that drive any business.
- Ramen-profitable. This is a startup that proclaims to be cash flow positive but actually makes just enough money to cover basic living expenses, such as toilet paper, running water and instant ramen noodles for survival (which means no salary for the founders). This buys you time and credibility with investors until the big bet really starts to pay off.
- Gen-Z. This is the youngest demographic, people born after 1995, who are sought after by all new businesses. Gen-Z members have grown up in an untethered world of smart-phones, tablets and WIFI, and their perspective is both multi-cultural and global. They have never seen a world without the Internet, and they now have real spending power.
Just for fun, I’ve come up with a scoring system based on my non-scientific survey to help you rate yourself on your level of entrepreneurial business acumen. How many of the terms defined above have you personally used or explained in the context of your startup?
- 8 to 10 – Excellent startup savvy (or a Gen-Y)
- 5 to 7 – Average, keeping up with the crowd
- 2 to 4 – Wanna-be entrepreneur, struggling to catch up
- 0 or 1 – Wake up, the entrepreneur world has passed you by
The new entrepreneurial age is here–there is no going back. It’s probably the biggest source of change and innovation in business today. As entrepreneurs and business people, it behooves us all to understand and adopt changes which can improve our competitiveness and impact. Are you leading the pack or barely hanging on?