There is one mantra that successful entrepreneurs often offer to aspirants – ‘Fail, and fail fast’. The premise is that you do not have to be an expert while launching a business. Rather, what matters is that you need to learn from your mistakes and pivot quickly.
But does this advice also hold good when you are talking about the expertise that one holds in the industry they are operating in?
How to be successful in business …
In a recent article on Entrepreneur.com, Jim Joseph, the President of Cohn & Wolfe for the North America region shared his experience with a tabletop wares retailer who did not have sufficient information to answer the prospective customers’ questions. The result – the business lost a customer and potentially a fair bit of reputation as well. Jim’s experience may have been a pretty extreme case. But the question still holds true – should you be an industry expert to be successful?
A few months back, I had the opportunity to talk to Jordan Eisenberg, the founder of a company called UrgentRx, an innovative medication product. Jordan told me that he did not have any experience whatsoever in the industry when he first set sights on the business idea. However, by constantly talking to people related to the industry, he was able to get a lot of information not only about the potential efficacy of such a product, but also on the regulations and legalities surrounding the business. Would UrgentRx been successful without Jordan investing his time and money into learning the industry? Probably not.
Jay Barnett, the founder of Priority Pickup, an online passenger service company has a different take on this. According to him, while industry experience is important, that alone cannot guarantee the success of a business. He says, “Industry experience is a definite advantage, but other characteristics are more important. If you truly believe in your product and are passionate about it. If you are motivated, persistent and focused on profit. If you can communicate well with others you can gain their expertise, advice and cooperation. I believe those characteristics are more important to business success than industry experience.”
There have been a lot of instances where entrepreneurs have been successful despite little information about the industry. One very known story is that of Richard Branson who started his airline company without much knowledge about the industry. Despite the anecdotal evidence that exists, there is no doubt that entrepreneurs who have industry experience have an edge over others who don’t.
With industry experience comes the innate knowledge about the do’s and don’ts. An entrepreneur venturing into the real estate industry will have an advantage over others if they are already knowledgeable about the kind of properties to invest in, the contacts that are essential to succeed, etc. On the contrary, an entrepreneur without industry experience will be learning on the job. Not that it is a bad thing, but when you are bootstrapping and do not have much leverage, it is not a good time to learning. Rather, you will need to execute right within the first few trials.
Failing fast is a great advice to go with. However, it is even better if the entrepreneur knows the mistakes that will help avoid failure in the first place. This is only possible with industry experience and is definitely something that one must strive to gain before getting neck-deep into the murky waters of entrepreneurship.