Axiom 1: Think Big - Stick With Your Idea - Don't Take Second Best

Lessons

1. Start small, think long. It will take time and you need to be ready for frustration, disappointment, delays, etc.
2. Start from somewhere. Then modify, reconsider, start again, perhaps even start something new. Successful companies constantly change and modify their businesses.
3. No success exists without previous failure.

It Will Take Time

A SUCCESS STORY IS USUALLY A LONG STORY

A success story usually focuses on the success, which is often limited to the most recent part of the story. Success stories are, however, typically long stories that go back decades. The H&M-founder Erling Persson, for instance, tried to sell many things before sticking to clothes. Nokia started as a wood-pulp mill, became a rubber works, and finally became a world-leader in mobile phones. Success stories are as much about failures, thinking small, changing your mind and settling for something different than you first dreamed about.

Even if you don’t walk straight, you might come a long way if you keep moving. As you will see in the case presented further below:

– The Danish label Morningside Records started out as a digital music service to artists, but eventually evolved into a record label.

– Bjartur started out as a very small publishing house selling books translated into Icelandic but has since expanded into Norway and Denmark.

– Christian Wåhlberg’s career was anything but straight and seldom followed a big plan, but led to the Swedish ‘pop factory’ Murlyn Music that has provided Madonna and other global pop stars with hits.

As we shall see, all these stories are broken into milestones and break points as well as a long term commitment to taking chances. All these stories underscore the importance of breaking down big goals into small ones; or, if you have no big goal, making sure you have some very definite small goals.

These stories also point to the importance of commitment and long-term dedication. In the cases below the founders’ devotion to their companies is obvious. This is important for a variety of reasons: devotion and dedication are seen by others and are very important in the eyes of customers, employees, investors and other useful people such as media and partners.

MANAGE DIFFERENT PHASES

Growing and building sustainable business is like running a marathon. It is pretty easy to register for the race and do the first 100 metres but then things have a tendency to get more difficult.

It is important to understand that the start-up phase is only the first of many. Each of these phases will need thought and attention. Indeed, the focus on start-ups in the economy – with all the schemes to help with start-up loans, incubators, allowances, etc. – can seem a bit unbalanced. What is important in the long run is what happens after that first stage.

Thinking about possible risks and planning for the transition from rapid growth to a steadier pace as the business matures (often three to five years after the start) is vital. It is easy to continue thinking in terms of start-up: constantly looking for new premises, partners, investors, etc. Whilst it is important to keep investing, it is equally important to think small and slow and avoid taking on high costs, employees and production facilities you are not yet ready to pay for.

As Christian Wåhlberg of Murlyn Music points out:

”It might sound strange, but what you have to do when everything is going terrific is to down-size.”

Studies show that if you make it to the fourth year, your business will have a good chance of surviving. But between start-up and year four there are some difficult and risky growing pains. Such risks include:

– You continue to chase turnover, not profit (read more about this in Axiom 8).

– Your first hit/idea, around which your company is built, is losing its power.

– Formalising a business built on initial esprit de corps and excitement feels like a betrayal.

– As the business involves more people a confusion of roles and weakness at the management level can cause problems and alienate employees and customers.

– The need to take in new competences quickly can result in recruiting the ‘wrong’ outsiders.

Understanding what has happened to others at this stage in your industry is useful, but thinking about and trying to sense the risks you are taking on is equally useful if you are to stay the course.