How big is your ambition?
Dialing in your company to match your ambition is an important process. A mismatch means that you ruin your chances of success.
After three days on the show floor at Photo Plus Expo in New York City, I was absolutely desperate for a round of recuperation and rest. Instead, I found myself in Reykjavik, Iceland, first participating in the You Are In Control conference, then drinking and dancing at what may very well be the best music festival in the world — Iceland Airwaves.
Iceland is, in every sense of the word, a very small country indeed. With a third of a million people in total, it means that every industry is per definition tiny. Diminutive size has some serious downsides, but it also has a few incredible advantages: Yes, the start-up scene in Iceland is vanishingly small, but as far as I can tell, everybody knows everybody.
I had dozens, nay scores, of absolutely fascinating conversations, both with the group I was part of (the SF Embassy), and with Icelanders. A lot of the conversations seemed to pivot around the topic of ambition.
Global / Local
One conversation I was unfortunately not part of, was a textile designer who had an absolutely amazing idea for a particular item of clothing. She had it all figured out — how it would be designed, manufactured… And that she would sell it in tourist shops in the main street of Reykjavik. Another entrepreneur who was making jewellery, lived a 5-hour drive away from the capital, and found a different solution: “I’m going to sell via the internet”, she said, “Because I can’t keep travelling to Reykjavik to ensure my goods are stocked in the capital.” Somehow, in this case, the drive to sell internationally to an international audience of billions was only sparked by not being able to reach the capital (with a population of just over 120,000).
The thing that strikes me more than anything else about those two stories, was that these two particular businesses were very focused on the local aspect: Selling Icelandic creativity to an international audience, but done locally.
Of course, there are many examples of Icelandic businesses who reach far and wide beyond the borders of the ice-capped slab of land in the North Sea, and I also understand that it can be extremely scary to reach out to an international audience, whether that is via the web or not. In fact, it may seem that trying to carve out a niche on Etsy or similar is an awful lot like heading to the coast and screaming at the howling wind and waves in Iceland — but the tail-side of that coin is that that’s reportedly how Björk developed her unique style, and things did turn out all right for her.
The word ‘ambition’ brings up a lot of connotations for me, in a lot of different contexts. There are life ambitions, professional ambitions, and many other angles of looking at the same thing: Who are you, where are you now, and where do you want to be going?
Setting goals, managing ambition
Early on in the history of Triggertrap, one of our business advisers took us through an exercise that sticks in my mind; The challenge was to pick goals and projections for 5 years from now. Anybody who has ever tried to put together a business plan for a business that has only been running for a few months knows the futility of the exercise: Every assumption you make will be wrong. Every guess you take will be ludicrous. Every attempt at peering into the inky well of the future should produce giggles, because frankly, the more firm the prediction, the more likely it is to be a rampant lie.
The one good thing that came out of that particular round of ‘planning’ however, was to set the path. Say you are opening up a cookie factory — do you want to make ten million cookies of one type, or a million different cookies of ten different types? Or perhaps a hundred thousand times a hundred types? The net number of cookies is the same, but creating a pipeline for developing and bringing to market a hundred different types of baked goods, versus mass-producing a single type is a vastly different proposition.
Putting together a plan — even if it is just choosing whether the company is leaning towards one or a hundred different cookies — is an incredibly valuable decision, and one that might not actually be made until someone thinks to ask the question, “What kind of company are you?”
Another extremely useful discussion I had with someone in Iceland, was what the difference is between a start-up and a lifestyle business. It turns out that this wasn’t something that was entirely clear to people; a lot of the ‘start-up’ ideas I had pitched at me weren’t really start-ups at all. That isn’t to say they weren’t great ideas, but in my mind, there’s something at the core of a ‘start-up’ that was missing in some of these business endeavours. To put it differently: If you have the idea to run a dozen amazingly high-quality coffee shops in Reykjavik, it could be perfectly viable business model, and it may well make you a lot of money, but Facebook, BMW, or HSBC is unlikely to come buy you out.
Selling to 1% of the people in Iceland
There’s an old joke in the startup world that says that “My business plan means that if I could only sell to 1% of the people in China, I’d be rich”. The joke is obvious: you’re probably not going to be able to reach a fraction of those people. In Iceland, the joke is more serious: Even if you did somehow reach 1% of the people in Iceland, you probably wouldn’t have a viable business, because you’d only have 3,600 customers in total.
With that in mind, the piece of the puzzle that fell into place at Iceland Airwaves is that music straddles this line very nicely. On the one hand, music scales really poorly in one sense: A single band can only put out so many albums, or do so many tours. On the other hand, some parts of music scales incredibly well; a band can sell two or two million copies of a tune on iTunes, and if they’ve signed a record deal that doesn’t screw them completely, they should see proportional returns.
So, there are three basic platforms of ambition: Instagram made a billion dollars after a very short amount of time in development, showing the most insane growth potential. The half-way house may be a service or product that services only a particular market. Selling car insurance in Iceland, for example: It may very well be a profitable business, but at some point, every car owner is insured, and your business will reach its plateau. The other end of the scale is the lifestyle business that has some serious road-blocks in it — ideas that don’t scale because they can’t. You can only print so many t-shirts, or pour so many cups of coffee.
Or can you?
Scalable business & picking a platform
Love ‘em or loathe ‘em, Starbucks is seriously challenging the idea that you can only pour so many cups of coffee… And if you look up how many bibles are still printed in the world, you might realise that yes, there’s a market for that, too.
I spent a long time thinking about whether there was any type of business that genuinely couldn’t scale. Plumbers can take on staff and become large companies. Artists can sell their artworks for sums of money that appear to approach ‘infinite’ — or go the other way, and sell commercial art that is sold for low cost but at incredible volumes through companies like IKEA.
The trick is to set the direction for the business right from the start, and to find your platform for ambition; think up half a dozen different directions that your business can grow, pick one of them, and don’t be shy about changing your mind about the direction of growth if it turns out that your first choice isn’t working out…