3 Tips on Starting a Business in a Field in Which You Are Not an Expert
Sir Richard Branson’s recent history-making voyage to the edge of space enraptured the world while establishing Virgin Galactic as a market leader in space tourism. But how did a high school dropout from London become the billionaire founder of a multinational conglomerate?
Entrepreneurs are often afraid of the risks associated with starting a business in a field they are not an expert in, but Branson’s success story shows that it is possible. He got his start with a mail-order record business that he established when he was only 20, and from that point on the Virgin Group continued to expand to various industries. In 1984, Virgin Atlantic, Branson’s airline, was launched.
The idea for Virgin Atlantic arose the way many startup ideas do — through a personal inconvenience to Branson. He was trying to fly from Puerto Rico to the British Virgin Islands when his flight was cancelled. He was determined to get to the islands to see his girlfriend, so he decided to pay to charter a plane from the airport for his journey, hoping his credit card wouldn’t decline. Ever the entrepreneur, Branson rounded up the others that were supposed to be on the cancelled flight, and offered them rides on his chartered plane for $39 apiece. One of his passengers remarked that with a bit of work he could run an airline. Despite having no experience or knowledge of the field, that’s exactly what he decided to do. The next day Branson called Boeing, informing them of his decision to start an airline. While they weren’t keen on the Virgin name they were keen on Branson, and so decided to lease him a plane while he tried to get his business off the ground (literally). The rest, as they say, is history.
Branson is now attempting to replicate his airline success in the space travel industry, and it seems to be working out. So what can we learn from this self-appointed daredevil about taking entrepreneurial risks?
1. Don’t Underestimate the Power of Fun
One of the first questions that every entrepreneur must ask themselves is, “what industry do I want to run a business in?” However, this question is overlooked far too often. Rather than focusing on an industry, entrepreneurs often focus on creating a specific product, or serving a particular market. While this may be profitable in the short-run, it can lead to founder burnout. Founder burnout occurs when entrepreneurs feel overwhelmed and become demotivated. It can happen when founders begin to lose passion for what they are doing. This passion is often lost because founders fail to realize at the beginning of their journey that the industry that they are in is not one that they will enjoy long-term. To avoid this, entrepreneurs need to find founder/market fit. Founder/market fit occurs when entrepreneurs are truly passionate about a field, and are willing to spend years within it. In other words, they need to start a business in an industry that excites them, and will continue to do so on a long-term basis.
Branson is a prime example of strong founder/market fit. Rather than viewing business undertakings as ways to turn a profit, Branson pursues opportunities that he finds fun. He assumes that because he finds them fun they will be fun for others, and thus will be profitable. Furthermore, because Branson is having so much fun, he is able to work extremely hard without burning out. As the saying goes, you’ll never work a day in your life if you’re having fun.
Perhaps the reason why Branson was able to make Virgin Atlantic such a success was because he was having fun while doing it. Branson is a daredevil, and has always been captivated by adventure and flying. An airline seemed to be the best way to put these passions together in a profitable way, and it may be why Virgin Atlantic became known as the airline you flew with if you wanted to have an adventure.
2. Be Prepared to Take Risks
There is often a substantial amount of fear associated with starting a company in a space that you are not an expert in. Although this fear can be beneficial because it encourages entrepreneurs to do their research and be fully prepared to make the jump into their new business, it can sometimes be harmful. Being afraid of a new and unfamiliar venture can prevent entrepreneurs from taking risks and completely committing to their new business. However, in order to achieve success, taking risks are necessary. Founders must attempt to minimize the risk that they face, but still be ready to jump at some point.
Branson would not be where he is today without taking an immense amount of risk. He often says,
“Opportunity favours the bold.”
— Sir Richard Branson, Founder of Virgin Group
This is a very true statement. Rather than avoiding risk altogether, Branson focuses on learning from failure. He is comfortable with some degree of risk and knows that even if it does not lead to success, it will be a good learning opportunity.
For example, Branson started Virgin Galactic at a time when space travel was a very new concept. It was a huge risk, and he faced failure in 2014 when Virgin Galactic’s first test flight ended in tragedy with the death of a pilot. However, Branson learned from this horrible mistake and continued to work towards his goal. He was eventually successful, and was able to travel to the edge of space on July 11, 2021. Preparation is important, but entrepreneurs must be comfortable with the fact that there is no way to truly eliminate risk.
3. Value the People That Make You Who You Are
When it comes to starting a business in a field that one is not an expert in, entrepreneurs often search for that expertise in the form of advisors, business partners, or employees. The people that you are in business with become a huge asset as they guide you through an industry that is foreign to you. That is why they must be treated with the utmost importance. You must value them, invest in them, and listen to them. If you treat your colleagues like your biggest asset, they will provide returns far greater than you could have imagined.
Branson often says,
“Clients do not come first. Employees come first. If you take care of your employees they will take care of the clients.”
— Sir Richard Branson, Founder of Virgin Group
This sentiment is echoed in the fact that he invests heavily in regular training sessions for all employees to increase their confidence and motivation. He also takes the time to meet as many employees as he can and personally listen to their suggestions. Companies are built from the ground up, so listening to those at the lower levels of your firm allows you to build a strong foundation.
In Virgin Atlantic’s early days, rival British Airways launched a “dirty tricks” marketing campaign against the new airline. They illegally accessed Virgin Atlantic’s private customer information, leading to a lawsuit from Branson. Virgin Atlantic won, and almost all of the $1M payout was awarded to employees at all levels of the organization in the form of Christmas bonuses. Branson’s commitment to valuing his employees allows him to attract top talent, and thus helps him be successful in whichever industry he chooses to operate in.
How Do Investors Feel About Founders in Fields That are Foreign to Them?
Although you may find success in a field that you are not an expert in, it may be difficult to convince investors to invest in you and your startup. However, there are some things that you can do to make your startup in a foreign field more appealing to investors.
1. Have Experts on Your Board of Advisors
A board of advisors is a group of business professionals that advise entrepreneurs on how to better manage their company. Advisors usually own shares of the firm they advise, and are thus invested in its growth. Startups at seed stage should already have a board of advisors. Advisors that are experts in the field allow you to gain inside information on the industry that you may not otherwise possess. They bring 15–30 years of invaluable experience that cannot be replaced if you are not an expert. This is appealing to investors, as it shows them that you are not completely lost in the industry that you are operating in.
2. Have Experts in Your C-Suite
Similar to having industry experts on your board of advisors, it is very beneficial to have industry experts in C-suite roles. This shows investors that even though the CEO may not be an industry expert, the COO or CSO is, which provides the firm with a valuable resource. This increases investors’ confidence that you will be able to run a successful business in the industry that you have chosen.
3. Have Exclusive Partnerships
Another thing that excites investors is when your startup is doing something that nobody has done before. When this happens, other firms only want to work with you, leading to exclusive partnerships. This shows investors that other firms are interested in you, which makes them interested as well. Although general partnerships are great to have as well, exclusivity is what makes your startup really appealing to investors.
4. Have Customer Testimonials From Beta Testers
Beta testers are users that test a firm’s final products just before they are released. Beta testing is the first time that a product is introduced to the market, and it allows startups and investors to gauge interest in the product being offered. Positive customer testimonials from beta testers that are well known companies in the industry are very appealing to investors. It shows them that your product has potential, and other firms believe so too. Beta testers that are familiar names in the industry are also important because they help build investors’ trust through their strong reputation.
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