By Scott Meacham
Copyright © 2019, The Oklahoman
I set a goal for this summer’s series of columns to reflect on and write about my lessons-learned during my past six years of immersion in entrepreneurship. Our focus at i2E is on high-growth technology or life sciences businesses, but startups of every stripe are vital to Oklahoma’s future. In many regards, what is true for high-growth entrepreneurship is true for Main Street.
First and foremost, starting a company is much, much more difficult than anyone who hasn’t done it can imagine.
My No. 2 lesson-learned is that, yes, there are many great ideas for new businesses in Oklahoma. These ideas deserve attention and support; however, with all due regard, only a small percentage of those ideas will eventually be scalable to high-growth companies. And that leads me to my No. 3 “aha.”
Like the road to the Promised Land, the entrepreneur’s path is neither straight nor without bumps. Invariably, in the companies that we work with, there will be unforeseen challenges that rear up and create a pivot point.
On Day One, entrepreneurs don’t know what they don’t know. They are ready and eager to do the back-breaking work to turn their passionate ideas into successful companies. Once they get out into the marketplace exploring their solutions with real potential customers, they learn very quickly that some (or most) of the assumptions they made about the market’s willingness to adopt and pay for their product aren’t 100% correct.
It might be that the cloud platform that held out possibility as a breakthrough solution for high-growth is actually more of a niche business for a narrow segment of an industry. Or it might be that a solution with a medium-size impact on one industry pivots to become a game-changing tool for a different industry. That’s part of the story of WeGoLook, which started out as a service to visually verify big-ticket items sold on eBay and pivoted the core technology to become the world’s first gig economy platform for enterprise customers.
In biotech, emerging drug therapies may initially focus on treating one condition, but then, with more testing and discovery, they pivot to a different patient population. An Oklahoma example is Selexys, Oklahoma’s largest exit. The company started out working on a therapeutic to deal with inflammation related to transplants and was acquired by Novartis for more than $600 million as a drug for treating inflammation related to sickle cell disease.
Top-performing management teams differentiate themselves from the not-top performers by how well they navigate the pivots on the way to success.
Pivots are the reason that market validation is such an important cornerstone of our Venture Assessment Program. We provide services and a framework to help entrepreneurs recognize that their solution needs to be tweaked or that they need to match their new product to a different market segment or industry, or a different aspect of a well-identified problem.
To paraphrase Oklahoma’s cowboy philosopher, Will Rogers: Nothing makes a man [or woman] broad-minded like adversity.
Scott Meacham is president and CEO of i2E Inc., a nonprofit corporation that mentors many of the state’s technology-based startup companies. i2E receives state appropriations from the Oklahoma Center for the Advancement of Science and Technology. Contact Meacham at [email protected].