React quickly

Put inefficiently used resources toward creating new products, and react quickly to problems.

Did you know that many people spend less than five percent of their time driving their car? The other 95 percent of the time, it’s just parked somewhere, taking up space. Robin Chase realized how inefficient that type of car ownership was, and so she founded Zipcar – a car rental company that offers cars for an hourly rate.

You too can found a successful start-up by identifying inefficiently used resources and coming up with an efficient solution. Try imagining how we could use what we already have more efficiently, like Chase did.

Another strategy is to come up with new functions for things normally used for one purpose. For example, ten years ago, our phones could only be used to call and text people; in the past decade, however, we’ve seen them develop into hi-tech computers that can take photos, play videos and send e-mails.

But no matter how brilliant your idea is, your start-up won’t survive if you don’t react quickly to problems.

So if you discover a big problem with your business model, don’t get discouraged. Instead, try to solve the problem as soon as possible, and inform your customers about what is going on. If you’re honest, they will be more understanding than you might expect.

For example, after the first three months of running Zipcar, Robin Chase realized that there was a serious revenue problem that would eventually bleed the company dry. After consulting her whole team, she quickly concluded that without a 25 percent increase in the hourly rate, the business would die.

Robin dreaded informing her customers of this. Once informed, however, most of them were prepared to pay more for what they already considered a great service.