Many would-be entrepreneurs spend years waiting for that one brilliant idea. But successful businesses rarely start with a flash of inspiration. More often, they start with a feel for the market, curiosity and the courage to take the plunge.
Caro sips her flat white and scrolls through LinkedIn. There is another post about a recent university graduate whose start-up has taken off and just closed its second round of funding. And one about a student who is apparently making money effortlessly thanks to an AI tool she built and is marketing on social media.
Caro studied business administration and now works at an international management consultancy. After years of PowerPoint presentations and learning first-hand how other companies operate, she is starting to wonder whether this is all there is for her. She wants to stand on her own two feet professionally. She wants to build something that will make a difference in the world. But what, exactly?
She still has not had that one big idea that would show her the way.
Caro’s head is full of start-up success stories. The trouble is that many of them tell only half the story. What they often leave out is this: nine out of ten start-ups fail. A clever idea is not the same thing as a viable business model. That point is underlined in the Global Startup Ecosystem Report (GSER), published by Startup Genome, which analyses data from around 3.5 million start-ups worldwide.
Starting a successful business rarely comes down to inspiration alone. Nor does it always depend on groundbreaking innovation. What it does require, however, is a feel for the market, curiosity and courage. Here are six ways to get started today without having to wait for that elusive flash of genius.
Nine years ago, Andreas Kuster, an economist, found himself in a similar situation to Caro. He had built a successful career at a large company in New York and Zurich. But he wanted more - and felt drawn to entrepreneurship. One day, he made a spontaneous call to Jakob’s Basler Leckerly, a biscuit company that had been in business for more than 300 years.
"Do you want to sell the company?" he asked. The owner’s reply surprised him: "Yes." She sold her biscuit factory to Kuster and his wife, Charlotte. Since then, they have turned Basler Leckerly into a well-known Swiss gourmet brand.
Bernard Arnault took acquisition entrepreneurship to another level. In the early 1980s, using funds from his father’s construction company, he bought into a struggling French fashion group that owned Christian Dior. The deal cost USD 15 million. He went on to acquire brands including Moët & Chandon, Louis Vuitton, Bulgari, Tiffany and Birkenstock. Today, Arnault's LVMH empire is one of the world's most valuable luxury groups, and he ranks among the world's ten richest people.
Arnault's lesson is simple: you do not always have to build prestige and a customer base from scratch. Sometimes you can acquire both - and make them even stronger.
To encourage this kind of acquisition, Harold Irving Grousbeck, a former professor at Harvard Business School, developed the search fund model. Under this model, one or more aspiring entrepreneurs set up a search fund to raise capital from investors, while looking for a company to acquire and run. The targets are often smaller businesses facing succession issues. Search funds are increasingly helping SMEs across Europe pass successfully from one generation of owners to the next.
There is a type of company that is rarely featured in business school case studies: the boring business in a boring industry. "Boring is beautiful", says US entrepreneur, investor and bestselling author Brent Beshore. He uses the phrase to describe companies that may not be glamorous, but that do essential work behind the scenes, keeping our lives running smoothly without ever becoming household names.
These companies maintain sewers, clean industrial buildings, place people in jobs, make packaging materials and cut hair. French entrepreneur Philippe Bosc, for example, started out as a hairdresser at the age of 14. A few decades later, he sold a hairdressing business with 4500 employees.
While talent and capital often chase high-tech darlings, many less fashionable companies in unsexy sectors quietly generate steady profits. The advantage for entrepreneurs and investors is that these companies often come without the glamour premium.
Many successful businesses began with a dissatisfied customer. Take Sir Richard Branson. His airline, Virgin Atlantic, was born after he experienced a dreadful flight. Virgin Active emerged from his frustration with gyms. Branson has often presented the Virgin approach not as pure invention, but as improving markets that already exist. The more than 400 companies in his Virgin empire all have one thing in common: they operate in saturated sectors - and take on the incumbents with a sharper proposition.
Anthony Tan's starting point was not a new market either, but a bad customer experience. At the time, taxi journeys in Kuala Lumpur could be an ordeal - particularly for women. Tan, who comes from a Malaysian business family, saw an opportunity to make them safer and easier. Together with his fellow student Tan Hooi Ling, he launched a simple smartphone booking system. An app followed, and Grab was born. What began as a response to a miserable taxi ride has since grown into an ecosystem spanning ride-hailing, food delivery, financial services and healthcare.
So sometimes, the best starting point is not "What can I invent?" but "What annoys me - and how could it work better?"
Do you need to be a born entrepreneur to launch a successful start-up? Sahar Hashemi OBE would say no. While travelling in New York in the 1990s, the British entrepreneur fell in love with the city's emerging Starbucks-style coffee bars. Back home in London, she missed her lattes so much that she gave up her career as a lawyer and founded Coffee Republic with her brother Bobby. The chain helped bring American-style coffee bar culture to a country that was much better known for drinking tea.
The lesson here is to notice what works well elsewhere and ask whether it could work in your own market. Hashemi's advice is: do not sit at your desk - get out; and do not buy into the fairy-tale romance of the big idea. Act on small, everyday ideas instead.
Apple founder Steve Jobs remains one of the most admired figures in business. What is sometimes forgotten, however, is that his first great entrepreneurial move was not to invent a computer himself. It was to recognise potential in someone else.
When Jobs saw the computer that Steve Wozniak had built, he realised its commercial potential. He persuaded Wozniak to go into business with him, and on 1 April 1976, they founded Apple Computer Company, and started to build their first machines in the now famous Jobs family garage.
Wozniak was the engineer. Jobs was the salesman and visionary. The partnership worked because their strengths complemented each other. Entrepreneurship, in other words, does not always mean being the creative genius. Someone in your circle may already have a great idea or technical skill, and they may need a person who believes in it and knows how to bring it to market.
You do not always need a new product or a new market. Sometimes, the opportunity lies in understanding a group of people better than others do. That is what Pauline Borg did. As a fifth-generation member of the Finnish industrialist Ahlström family, she grew up with the understanding that wealth and responsibility go hand in hand.
Over time, she realised that many entrepreneurial families were wrestling with a similar question: how to use capital effectively for the benefit of society and the environment. These were families whose concerns she understood because they were close to her own experience. To help them address this challenge, Borg founded the advisory firm Kairos.
Caro puts down her smartphone. Her flat white is finished. She still does not know exactly what kind of business she wants to build. But maybe that was never the point. If good ideas can hide in plain sight, she now knows where to start looking.
