By Ismail Abdur-Rahman, CEO iVIBES
While the whole world saw a boxing match during the Mayweather vs McGregor tilt, I saw something just a little bit different. Sure, there was no escaping the pugilistic pomp and circumstance of the mega-event, but from a different lens, you could glean several important lessons for startup success.
While Conor McGregor is a dominant UFC champion, he is a boxing neophyte, making the parallels to startups particularly apt here. Something conveniently glossed over during the fight hype was that despite his MMA accomplishments over the past 5 years, he was the equivalent of a Silicon Valley startup trying to steal Apple's smartphone market share. The years of trial and error design, research, and marketplace learning were simply not there, making for an unrealistic hope of unseating the most dominant industry giant of our time.
Assess Barriers to Entry
Before deciding to enter a specific market, a startup needs to assess the level of difficulty of doing so, specifically examining any potential barriers to entry. For example, if you want to become a player in the travel industry, you will need to consider that starting a new airline is capital intensive and the returns are perilously low. Unless your investors have loads of cash to burn and are not in need of a reasonable ROI, these factors are likely to preclude you from trying to become the next Virgin Atlantic Airlines.
Unfortunately for McGregor, his UFC fame essentially eliminated the typical barriers to entry for professional boxing. Most professional boxers toil in the amateur ranks for a considerable amount of time in order to develop the skills and reputation necessary to have a realistic shot at going pro.
Identify Core Competencies
A startup also needs to assess its core competencies. What are you actually good at? This could be as a result of specific industry experience, academic learning, or insider information, but an honest assessment of your startup's real skillset must be done to determine whether you stand a realistic chance to gain traction in your market, to say nothing of competitive advantage. After identifying your core competencies, it's important the your product/service is built around these strengths. While some startups occasionally venture into uncharted waters and find success, the more likely scenario is that the length of time it takes to develop competency in the new area will drain startup resources and force the company out of business before it becomes profitable.
While McGregor obviously has fighting talent, most of his high-level skills don't transfer well to the boxing arena. Unable to use hammer fist strikes, knees and elbows, or chokes and kicks, McGregor was essentially handcuffed to a pawing jab and an inconsistently placed counter punch combination. Had the match been fought under UFC rules, the outcome undoubtedly would have been much different, but the reality is that McGregor simply didn't have the skill to match the wily old veteran in a boxing match. As a result, he punched himself out early on and didn't have enough gas left in his tank to battle through fatigue in the later rounds.
Know When to Pivot
One of the key components of the Lean Startup methodology is the pivot - knowing when to make a strategic shift with your product/service offering. I'm sure by now you know that 9/10 startups fail, and the primary reason for their failure is that they run out of money before they figure out what product/service the market is willing to pay for and at what price. Of course, it goes without saying that your assumptions need to be validated in order to make an appropriate pivot, and there are a number of ways that you can do that with your market. They key, though, is figuring out as fast as possible when you need to change your offerings in order to meet market demands.
An interesting footnote to the fight was a post-fight interview with McGregor in the locker room. He remarked that he thought he was doing well early on but that about midway through the fight, Mayweather switched his style to an approach McGregor hadn't anticipated. The result was that Mayweather, who made an appropriate pivot, was able to exploit the weaknesses in McGregor's footwork and punching effectiveness to take control of the fight. McGregor, on the other hand, didn't pivot after it became clear that his early strategy was no longer effective, ultimately sealing his fate on the wrong side of a TKO.
There are a number of other observations from the fight that could also be applied to the startup business cycle, but for now, the aforementioned lessons will suffice. In fact, the same principles can also be applied to career path progression, for those of you who are more inclined to work in the corporate world. For startups, though, perspective is key. Either your initial assumptions were correct and your startup succeeds, or you quickly learn that your assumptions were off, so you pivot, and your startup succeeds. In McGregor's case, his assumptions about the market potential of the fight were correct, and he will pocket a minimum of $30 million - a tenfold increase over his highest-ever UFC payday, although his misreading of his core competencies for the event got him battered in the end.