002: How To Avoid Premature Scaling with John Richards
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A startup is a temporary organization that is setup to create a sustainable, repeatable business model.
– John Richards CLICK TO TWEET
What is the difference between startups that succeed vs those that fail? That’s the question of todays podcast. It’s one thing to have a great idea. It’s a completely different thing to systematically prove that your customers agree. There’s a reason that 93% of startups that scale early never reach the 100k per month and why 74% of prematurely scaled startups will fail. My guest, John Richards, is a wealth of knowledge when it comes to building scalable businesses. In this episode, we discuss the signals of premature scaling, the business model canvas, the surprising differences between grad students and undergrads as entrepreneurs, and the single most important ingredient to a successful startup.
- The Startup
- A startup is not a company from day 1, it’s a temporary organization that is setup to create a sustainable, repeatable business model.
- First thing anyone has to do in order to create a properly sustainable company, even before you build any product or try to sell, is see if you’ve got any semblance of a model that works.
- Business Model Canvas
- Profile of an Entrepreneur
- Those that set out on their venture while hedging through thoughts of resorting to their degree and abandoning this cause are vastly more prone to failure.
- The constraint of lack of capital and true back-up plan breeds creativity and innovation and makes entrepreneurs iterate where needed, persevere and “find a way”.
- Tenacity and persistence are key to entrepreneurial success.
- Premature Scaling
- No customer facing company that doesn’t practice the validated learning methods of Lean Startup ever reached 100,000 users and achieved long-term success. Those that do, come out of the chute slower and more pragmatically (without the vanity metrics to start), but have a consistently higher probability of PMF and reaching the “finish line”.
- Most early stage entrepreneurs will fail to be able to articulate a business model that has been effectively validated with primary research.
- Startup Ignition
- Startup Ignition is an entrepreneur bootcamp, including actual implementation of learned tools and skills, that prepares entrepreneurs, founders, and teams to properly launch a company and take the right steps towards mitigating risk and increasing success. We enable our students by removing the fluff from a traditional 4-year degree, or other out-dated programs, and delivering an intense and impactful suite of results-driven curriculum.
- “There’s no great predictor of the personality types that make a great entrepreneur. People fall in love with the concept of starting a business and being rich, but not necessarily with the facts of 80 hour weeks (and the like)… Are you going to ‘grab the brass ring’ and make a go of it?”
- “If you’re ready to work hard, and you learn these sustainable basics, you can learn to start to see pains in the world that you’d be able to solve. You’ll then be able to find the true genesis of your company.”
- “A hallmark of successful entrepreneurship is launching without a defined safety net, or fall-back plan in mind.”
Meet Our Guest
John E. Richards is an entrepreneur, venture investor, executive manager, and educator. His activities have included founding, running, selling, and investing in several enterprises. Most recently, he founded Startup Ignition, an entrepreneur bootcamp in Provo, Utah. He spent over a decade teaching entrepreneurship at Brigham Young University in Provo, Utah where he helped bring the Rollins Center for Entrepreneurship & Technology to global prominence. He was managing partner of UtahAngels, a venture investing group. He co-founded BoomStartup, a tech accelerator in Utah, and also founded the Utah Student 25. Early in his career, he started the first-ever online yellow pages that led to an initial public offering and a multi-billion-dollar valuation as part of InfoSpace, Inc. John is a frequent speaker at conferences and other events. He has four adult children and three grandchildren. He and his wife reside in Provo, Utah.
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