I had an interesting discussion with one of the founders of txtanium, a company I have recently invested in. The topic was about how startups often end up doing something completely different to what they had originally planned on doing. This is something I have personally experienced many a time. As you bring your product/service to the market, start receiving feedback and measure traction, tweaks have to made. Sometimes products/services are launched in areas where the demand has not yet been developed. Other times, our target market may need a variation, or a complimentary product/service, that supports the one that we had initially planned to provide.

Regardless of the situation, one should expect a fair amount of change in the original business plan, the one that was conceived when the product/service was just a concept. Ground realities are usually very different from what they appear to be when you are in the planning phase. Inability to adapt to these realities can result in companies having to close business down. In essence, this brings out a key characteristic found in successful entrepreneurs, flexibility. The ability to change ships before they sink is a typical quality of a serial entrepreneur. When the odds are stacked up against you, it really comes down to the entrepreneur’s ability to be able to side step and duck.

One needs to have a finger on the pulse of the business constantly:

1. Monitor your cash flow situation at all times. Long sales cycles, delayed payments and over stocking on inventory can have devastating impact on your bottom line. If you are not being able to generate revenue fast enough, it is time to start exploring alternative paths.

2. Focus on customer feedback. Setup systems to constantly monitor what your customers and prospects are saying about your product/service, as well as the overall industry you operate in. Choosing incorrect niches is a common mistake that many startups tend to make. This is usually because we tend to overestimate market size or demand levels.

3. Keep an eye on your competition. How are other companies doing in your niche? Is everyone selling a relatively homogeneous product/service? Who is leading the pack? What are they doing differently? How fast have they been growing over the past 12 – 24 months? If your company is getting left behind, take a look at existing practices and systems. It may be time to bring in some major changes.

These are just some things to stay on top of it all. The main takeaway from the system is the entrepreneur having the ability to make those difficult changes when things are going as planned. This is not as easy as it sounds, it takes a lot of heart and flexibility to accept that one was heading down the wrong path. However, if you want to create a successful business, your ego has to be put aside. I am a strong believer in the fact that no effort is ever wasted. All good things take time, patience and flexibility are cornerstones to success.