What Small Businesses Can Learn From Startups
This is Part 2 of a two-part series; Part 1 explained the things that startups can learn from small businesses. This essay is the inverse of the original and explains the things which a small business could learn from a startup. It’s important to note that if you don’t understand what we mean between a small business and startup to go back and read the first essay. It’s a subtle but important difference.
Startups Are Better At Storytelling
Typically startups are selling something that requires a little more “sales”, yet because they sell at “scale” they seldom do so one customer at a time. We believe that startups have more of a sales hurdle because they’re probably selling something that displaces the status quo offering; requires a customer to change their habits; or requires the customer to learn something first before they become a customer. A small business isn’t as burdened by this because what they’re selling is already the norm.
So startups must rely on better marketing. Marketing is a multi-angle story. Every touchpoint with your customer is an opportunity to take the story of your company one step farther. Some marketers refer to this as the ‘customer journey’ in that a customer has to mentally go through the steps needed to be informed by the offering, then be persuaded by the offering, and then reminded of the offering.
We believe that small businesses should concentrate more heavily in understanding that their customers are somewhere on this journey, and different parts of their story (and the places they distribute said story) should be told throughout it. Some of your marketing materials need to go towards directing your customers to the FAQs of your market and product; some need to go towards persuading them to try it; and some need to go towards reminding them that they’ve made the decision to purchase. Being cognizant that customers are all at different psychological stages of the buying decision process is the first step.
Startups Are Better At Explaining ‘Why’
As Simon Sinek emphasizes in his book “Start With Why”, customers don’t buy what you sell, they buy why you sell it. Sure, they also buy what you sell – but in a crowded market with competitive options they care first and foremost about why you’re in business. Apple’s why is fighting the status quo; Walmart’s is saving people money so they can live better lives; Starbucks’ is about nurturing your spirit; Whole Foods’ is about a quality state of mind. Notice something interesting in these statements: nowhere did they say computers, retail stores, coffee, or groceries. It’s far deeper than their features. Their features can be bought at their competitor’s stores, but can customers buy their ‘why’ at the competitor’s stores? Probably not.
Small businesses need to remind themselves to not just make great products/services and then deliver them in exceptional ways, but also to craft a message that resonates with their customers in a far deeper way than surface level benefits. Doing so will help greatly with your storytelling (the former point), as well as differentiation (the next point).
Startups Are Better At Differentiation
When you start a small business in Kansas City, the likelihood of you treading on someone else’s turf is high. Remember, part of our definition of a small business is that it’s implementing upon a KNOWN model – and for it to be known there has to be others doing it. So if you start an accounting firm in Leawood, you’ll be compared to all the other accounting firms in Johnson County. Considering search engine rankings, social media prowess, and digital ratings have a ton to do with ‘time-in-business’, you’re going to be starting from the bottom. Why would a customer choose someone doing the same thing as the other guys that have been around for years longer? They wouldn’t, if they are indeed doing the exact same thing.
But what if you weren’t doing the same thing? What if you stood out? What if your offering emphasized something niched, or was priced as a subscription when everyone else is priced as a transaction, or one of a million different things you could do to separate yourself from the rest of the market? Sure you’ll turn some people off that don’t care about your differentiator, but at least you’ll turn someone on that does. Not having a differentiator will put you at the bottom of a pile that no one will even get to.
A strong differentiator is a tool to help them do just that; differentiators make your business more memorable and thus makes it easier on your customers to slip your story into referrals. An example would be if you were a photographer it would be worth specializing in a specific type, such as food photography. Not doing so risks not getting referrals when a customer’s friend is asking about photographers; why recommend you when there are hundreds of other people that generically compete against you? But if the person asking about photographers needed a food photographer it would be virtually impossible for the referrer to bring up anyone else other than you.
In business, specialization is just another way of breeding credibility. Even if there are 100 wedding photographers in Kansas City that are better overall photographers than you, but you’re the one that specializes in food – the likelihood of you quickly owning the food photography market of the KC metro is much higher. Think about the risk factor from your customer’s shoes if they needed food photography…is it riskier to get one of the best photographers in the world that does mostly weddings, or the unproven photographer that specializes in the exact type of photography you need? The fact that a great differentiator can even have someone comparing you to the best photographer in the world means that a differentiator is a must-have asset.
Startups Have A More Advanced Appetite For Growth
We’re not knocking people that start companies for the purpose of making just enough money to live and be happy. We find this more noble than most traditional professional pursuits. But in the world BetaBlox lives in, this isn’t enough. We desire to grow bigger and stronger every single day that we’re in existence. If we owned a coffee shop, we’d want it to be two coffee shops, fifteen coffee shops, or even hundreds. If we were real estate agents we’d want to have our own agency representing our brand in multiple geographic regions. This doesn’t make owning a “lifestyle business” wrong, nor does our hunger for growth make us wrong – to each their own.
But let us make a single argument for why even the lifestyle business owner should want to grow larger. What happens if you get sick for a little while? What happens if the economy crashes again for year or two? What happens if you need to hire a relative because they’ve come on bad times? If you’ve built your business just large enough to pay your way, you’re not leaving much of a buffer for problems such as the aforementioned. If you can challenge yourself to go just a little bigger than what feels comfortable, the asset you’ve created can suffer through down times.
Startups Are Better At Design
To a certain extent, ‘design’ falls under the storytelling category, but does so from an alternative perspective. Your logos, website, social media pages, photography, table tents, signs…everything…shows off your design prowess. You caring about design eludes to the fact that you care about your product and you care about your customers. Not to mention people are drawn to beautiful things. Although we’d rather have you skip some of the design hurdles at first in pursuit of launching faster, never forget you need to eventually go back through and make things beautiful one pixel at a time.
Startups Are Better Students Of Their Craft
Being a great entrepreneur means you’re one of the most well rounded professionals there could possibly be. You’ll need a little bit of everything; SEO, design, marketing, product management/development, salesmanship, professional etiquette, etc. This infinite list of things you need to excel at is not just long, but it’s also constantly evolving. To keep up you must study your craft. We strongly suggest becoming a voracious reader; following famous small business owners on Twitter; watching small business YouTube videos; attending things like 1 Million Cups and asking those around you where they’re learning; and listening to podcasts on topics that center around either your industry, or small business in general. The second you stop studying is the second that you risk becoming obsolete.
Startups Do A Better Job Working On Their Business Rather Than In It
Let’s pretend you’re a doctor that just opened a small practice in the Overland Park. Congratulations, this makes you a small business owner. But unlike days of the past where your job was to simply show up on time and heal people, it’s now far more robust. You can no longer just show up and care for the customers (or patients in this case) that come through your door. You have to actively hunt new customers, learn why your practice isn’t ranking higher on Google, care about Facebook ratings, hire new doctors, write training manuals for staff, yada, yada, yada.
This advice goes for hair stylists, gym owners, and software developers; you’re going to be doing less hair, less personal training, and less programming than you originally thought. Doing that stuff may be why you got into business in the first place, but it’s only half the reason you’re going to stay in business. The other half will be all the stuff that makes you a healthy, well rounded, and growing company. We see too many small businesses that appear to simply clock in at the beginning of the day and clock out when it’s time to shut down. Doing so is called a job. But coming in early, working on your company during slow times, forgoing lunch, staying up late, hustling for referrals while working with customers – that’s called entrepreneurship. Small businesses in Kansas City should strive to find a great balance between the two.