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The problem that entrepreneurs face is that their costs can be fairly easily estimated. But, it is impossible to know how the market will respond when the startup’s products or services are finally offered for sale. The question of will there be demand is and should be core to any entrepreneurial endeavor. It is what every entrepreneur struggles with.
Demand is not an issue only for new businesses. It may appear to be much more of a problem for new products and new businesses, but this is not actually true. Although many existing businesses like to think that they know their customers and the demand for their products, this also is not actually true. You can only estimate future sales correctly for as long as nothing unforeseen or unexpected happens. That’s the problem — the world is always changing. And your business is changing the world.
Businesses need to constantly reinvent themselves and refine their products because things change — and because they and other businesses change things.
Uncertainty of the future
The difference between regular business and entrepreneurship is one of degree. Entrepreneurs are in the business of creating a new future. They pursue new products, new service offerings, innovations. They hope to carve out a market share or niche where they are unbeaten in serving their customers.
Existing businesses are doing the same. They too strive to create the future. The difference is that they have experience interacting with customers, developing products, dealing with suppliers and might have name recognition that helps them get a fair hearing. But the fact is that the past does not determine the future. Our actions do.
In other words, the future is uncertain and our actions contribute to making it even more so. By trying something new, the entrepreneur not only attempts to carve out his or her own niche but is also trying to affect and change consumer behavior — and therefore undermine incumbent business models. This is the core of the “perennial gale of creative destruction,” in economist Joseph Schumpeter’s celebrated phrase, that characterizes the market.
In other words, uncertainty is everywhere. Its impact too is uncertain. There is no way of planning and predicting one’s way around it. Or is there?
Related: How to Harness Joseph Schumpeter’s ‘Forgotten’ Path to Innovation: Organization
How to deal with uncertainty
Uncertainty can easily seem a burden that is not only inescapable but also a cost that one must simply carry. But this is not so. There are simple means to deal with the uncertainty of the future and maximize one’s chances of coming out ahead.
1. Make the consumer core to your business
No, not the customer, even though customers are of course important. Even if your customers are businesses, you should think of the final consumer. Business success is ultimately about contributing to consumer welfare. B2B is only one or more steps removed from the consumer, but it doesn’t make the consumer unimportant. Ask yourself, how does what you are doing provide benefits to consumers (directly or indirectly)?
Related: How to Think Like a Successful Entrepreneur
2. Think beyond your product
It is easy to get stuck thinking about one’s product or service offering and therefore focus on product development. Those are important, but they are not what determine the long-term success of the business. Your product is next-step material, but long-term success requires that you think beyond the goods that you offer customers (and consumers!). Place yourself in their shoes. How can you make their lives better? That’s the entrepreneurial question and every business needs an entrepreneur.
Related: It’s Time to Separate Managers From Entrepreneurs
3. Disregard the competition
Yes, you read that right. Seems crazy, but the point is that what the competition is currently working on is a matter for the short term. You need to survive the short run, but it is to be successful in the long run that truly matters. For the long run, the short run is just a bump in the road. So focus on how you can find a place where you make a lasting contribution. How? By focusing on the value that you can and will provide to consumers.
Granted, these rules of thumb do not guarantee the success of your business. But they offer proper framing for thinking about it. The purpose is to help you keep the longer-term play in mind while dealing with all the necessities of the present. It is easy to get so bogged down with putting out daily fires that one loses sight of the goal. Eyes on the prize.