“Passion and perseverance are strongly linked: Passion (an attitude) and perseverance (a behavior) form a positive feedback loop and reinforce each other.”

To succeed in business you need both passion and perseverance. You will be in the state of flow only if you will have both. The state of flow requires a positive feedback loop which is fueled by passion and perseverance.

Passion is not something that some of us have and some do not. Each of us has a passion for something. And we are not born with this passion, it’s developed over time. That means we can become passionate about pretty much anything. But only if we decide to do so and take certain actions. Naturally, we will not become passionate about things we don’t know about, and that’s why discovering and learning is the most important element of developing a new passion.

“To innovate, live in the world of what might be, not in the world of what is.” —Alan Cooper

A customer need is a gap between the current state and the preferred state. You want to find these needs in order to build your solution for them. The solution is a service or a product. It’s dangerous to build solutions based on impulse or pure passion because sometimes no one needs them. Instead, if you want to minimize the risk of your new venture, analyze possible customer needs. Then, determine if you can build a great solution to address them. 

What is a tree of needs?

Every product or service is a solution for a need, and that solution generates more needs. This is because the solution is not perfect, or it opens a market for additional products. For example, the iPhone opened a need for mobile apps, phone covers, and even iPhone repair services. Then, solutions for these needs open other potential needs. For example, mobile apps created the need for programming services. And so on. Every need has or can have a solution, and every solution creates a new set of needs.

“It’s not the customer’s job to know what they want.” —Steve Jobs

Smart entrepreneurs are not listening to what people want, but rather what they want to achieve. Most likely you know Henry Ford’s famous saying, “If I had asked what people wanted, they would have said faster horses.”

Therefore, next time you talk to your potential or even current customers, always listen to what they want to achieve. What are their goals? And then, it’s your job to invent the solution.

“Not failure, but low aim, is crime.” —James Russell Lowell

Creating a business is a risky and difficult thing. That’s why you should always aim for a big return on your time and money investment. To do this, you want to build a solution for the biggest possible group of people.

How can you address a bigger spectrum of customers? How can you serve the same or a very similar solution to more people? Or how can you sell more to the same people?

When you have this big idea, it’s time to start with something small. First, focus on a small group of people and a simple solution. Start by focusing on a specific solution in a specific niche, and then slowly scale it up.

Your stars are your and your founder’s resources. When you are looking for a great idea for your business, take a close look at what resources you have and what you can do with them. There are five types of resources.

• Skills and abilities
• Technologies - There are basic technologies you can consider, like mobile phones. However, when you think about it, you probably know about much more than just the basics. For example, you may know about GPS or 3D printing.
• Assets, knowledge, and accomplishments
• Relationship and reputation - This is all about who you know and how you can use your network
• Inner-strengths

“We cannot become what we need to be by remaining what we are.” —Max De Pree

Most likely, your subconscious tells you a lot of negative things about yourself: you’re not enough, you’re not good at this or that, you’re a slow learner, etc. This type of thinking is not good for your future because it can work as a self-fulfilling prophecy. The good news is that it can be changed. You can either disapprove this thinking or convert it into an asset.

It is also important not to criticize others. It might feel good at first, but there is nothing good about it in the long run. Instead, always try to find something good about others.

“We’re still in the first minutes of the first day of the Internet revolution.” —Scott Cook

Pretty much every company benefits from new technologies such as websites or customer management software. So, you should think about making a business that provides a service or a product based on technology. Even if you have little knowledge about the technology, you can learn about it and then innovate something. You don’t need to have a degree in any related area, many of the best-known innovators didn’t have related degrees. They learned everything by themselves.

Nowadays, there are a lot of online sources where you can learn the basics and even more advanced things about technology. So, even if you are an artist, there is no excuse.

“Strategy is about making choices, trade-offs; it’s about deliberately choosing to be different... A strategy delineates a territory in which a company seeks to be unique.” —Michael Porter, Harvard Business School

Being better is not enough. Being 20% faster or 20% nicer is not enough. Your product must be different. For example, Apple produced computers with an entirely different operating system. All the other companies (Lenovo, IBM, HP) were selling computers with Windows. And they had only small differences in the hardware to distinguish themselves. In contrast, Apple was selling a computer that had a completely different user experience. Think about this when you create your product. Be different, not just better.

When are you different? When your customers see that you are different. It’s up to you to decide what’s different about your solution, but don’t fool yourself about the strengths of your advantages. Validate your differentiation on the market.

Sometimes, the best way to start a business is not by discovering needs, but by analyzing your resources and determining what you can do with them. Sometimes you have a technology or an innovation that can be used differently. And that might be all you need to start a business.

Microwave ovens, corn flakes, potato chips, and even penicillin were invented by accident. And the inventors built their businesses based on them.

“If you can laugh together, you can work together.” —Robert Orben

Your business will be much more likely to succeed if you have a co-founder. Also, it will be easier and more enjoyable to build. Here are some more benefits to having a co-founder:

• A co-founder will help you accomplish things that seem impossible.
• He will bring his own resources to the company.
• You will start building your team immediately.
• The right co-founder will challenge you and make you stronger.

“Be frugal, and you can be generous.” —Lao Tzu

A software entrepreneur Nick Winter owns only ninety nine things. He has an iPhone, two pairs of jeans, clothes, and not much more. There is rarely a reason to have more things than this. You probably only wear about 10% of the clothes you own. Why do you keep the rest of them? The point is that you possess too many things that you don’t need. You don’t have to minimize the number of things to ninety nine, however, think about being as frugal as possible.

Frugality eliminates distractions and helps us to focus on what’s really important.

In the early days of a startup, money is tight. Therefore, you should avoid all unnecessary expenses. For example, even though one Starbucks coffee is relatively cheap, it can cost you a thousand dollars over a year if you go there regularly.

Being frugal also means surrounding yourself with people that are impressed with goals and progress towards them. This is the opposite of people who are impressed by extravagance. Many billionaires like Mark Zuckerberg, Tim Cook, and Drew Houston live simple lives.

As was said before, your success depends largely on the resources you already have. However, you might not have enough resources for your ideas or you may need additional support. In these situations, you can use some of these 10 methods to develop and acquire the resources that you need.

Business partners can help you in areas that are not your strength. You can find specialists and business partners in pretty much everything nowadays, so no matter what your weakness is, you can find someone to help you. Think of all the resources that you need for your business, and then think of who you could partner with.

Network effects are positive feedback loops where customers attract and are attracted by more customers. Your product has a network effect when your customers interact with each other in some way. This interaction causes more people to join your network, and your customers become more engaged and ultimately purchase more. Pretty much every business can create and build network effects among its customers.

Principle 1: Estimate the value of your solution to customers and be able to articulate it.

Principle 2: Know your breakeven point.

This is the point where the revenue equals the costs. It’s the minimum money your company must earn to survive.

Principle 3: Estimate the price for your solution that would maximize your profit.

The higher price, the more money per item you will earn; however, fewer customers will buy it. Usually, there is a golden point where your revenue is highest.

Principle 4: Create recurring revenue.

Netflix could sell you access to single movies or TV series. Yet, they decided to charge one monthly fee to allow you to watch as much as you can. Recurring revenue is a much better pricing model due to its stability and high profit.

Principle 5: Go Freemium.

Freemium is a relatively new name for something that existed for a long time. Give your customers the ability to use your product for free to some extent or for some period of time. If they like it, they will come back for more.

All your research, market analysis, and brainstorming will finally come to the point where you have to show your product to your potential customers. This is where the real learning starts. This is where you will get to know how close you are to finding a solution to the problem you are trying to address.

The sooner you get feedback from potential customers, the better it will be for you. That’s why it’s a good strategy to validate some assumptions before you build the actual solution. This can be accomplished by doing mockups or showing a presentation or video. The product should only be built when you know that you have learned all you can without actually building the product.

In the early stages of your business, it is very difficult to raise money. In order to raise money, you would have to spend a lot of time. This time would be better spent building a solution and starting to sell. Sometimes, of course, you need to raise capital because you cannot do anything further without money. However, you should only spend time raising capital when it’s absolutely necessary.