On the Author: If you’re from the South Hills of Pittsburgh you’re no doubt familiar with Rollier Hardware on Washington Road (if you’ve been in Pittsburgh a while you were familiar with it on McFarland Road too); but did you know the family run business has a multi-million dollar e-commerce site called HardToFindItems.com? The bright guys behind it are my long time friends Brett and Derek Satterfield. I asked Brett if he wouldn’t mind sharing some of his wisdom through this blog and he graciously agreed, so look for a post, like the one below, authored by him from time to time.
If you ask a venture capitalist what is more important to a startup, the idea or the execution, almost every venture capitalist will tell you it’s the execution.
As someone going through the startup process myself, along with multiple friends or acquaintances that are starting their own companies and or have seen their idea fizzle, one of the constants I have seen in successful ventures is how the entrepreneur handles the evolution of their company. The entrepreneur cannot accomplish everything; however, delegating to many tasks too early on can also be a recipe for disaster.
Startups succeed when the entrepreneur can develop a solid competitive advantage, but just an idea won’t create a competitive advantage. When my brother and I launched HardToFindItems.com, we thought we would sell a slightly different product mix than we ended up selling, sell mostly on our own website and advertise mostly with shopping comparison websites. Turns out some of our best products are items we would not have thought would even be in our catalogue. While our own website is building a strong base for long-term competitiveness, we are seeing explosive growth this year to the tune of a projected $6+ million on Amazon.com as a third party merchant. Finally, we have found that shopping comparison websites are not cost competitive, but Google Adwords is very cost efficient.
Lesson: Innovating/growing your business won’t happen unless you are closely attached to the day-to-day operations when you start up is in its infancy stage. It is hear that you will be able to listen to your customers, troubleshoot problems, find inefficiencies in the marketplace, et cetera that are necessary to develop and refine you strategy and competitive advantages. Once this has been developed, it is time to hire and train capable employees. This isn’t always as easy as it may seem. It’s tough to give up these responsibilities for many entrepreneurs, but there comes a time when it is necessary for the evolution of the business.
On the other hand, if an entrepreneur doesn’t meddle with the day-to-day tasks enough at the start, the business is bound to lack a solid direction. Entrepreneurship is about evolution, new ideas, etc. Theses ideas have to be developed and refined by the founder before you start delegating.
This is probably not a revolutionary concept for many of you readers, but I have seen many small businesses fail because the entrepreneur didn’t involve themselves enough in the day-to-day operations while their competitive advantage was being developed. On the other hand, I have seen many businesses fail to take the next step, because the entrepreneur didn’t hire and train capable employees to run their daily operations, once they got their business off the ground.