The Titanic Effect – Successfully Navigating Business Uncertainty with Drs. Todd and Kim Saxton. They share insights on how small business owners can deal with and mitigate the unforeseen uncertainties that can sink your small business in the future. They are the authors of the book “The Titanic Effect: Successfully Navigating the Uncertainties that Sink Most Startups.”
Dr. Todd Saxton is an associate professor and Indiana Venture Faculty Fellow at the IU Kelley School of Business and an award-winning professor of strategy and entrepreneurship. Todd has advised, helped launch, and invested in hundreds of startups. He serves on the board of multiple entrepreneurial ventures. He has published numerous book chapters and articles on corporate and startup strategies, and he is the co-author of “The Titanic Effect.”
Dr. Kim Saxton has over thirty years of marketing and market-research experience, working with large corporations, startups, and medium-sized businesses. Currently, she is a clinical professor of marketing at Indiana University’s Kelley School of Business. Kim’s research on market segmentation, branding, promotional strategies, venture success, and venture ecosystems has been published in numerous international academic journals. She also serves as an associate editor for the Journal of Advertising Research. Kim is an active angel investor and advisor to high-potential startups. She is also the co-author of “The Titanic Effect.”
Kim and Todd currently live in the Indianapolis, Indiana area.
Topics discussed on this episode of The How of Business podcast include:
- Why did you decide to write this book? Why the name “The Titanic Effect”?
- “Just one out of two startups make it to year-five and seventy percent of ALL new companies fail by year-ten. Why? The Titanic Effect!”
- “Like the Titanic, venture failure is nearly always the result of a series of errors that are not obvious—problems that lurk beneath the surface—that are a consequence of navigating uncertainty in the early stages of development.
- “…often-overlooked human, marketing, and technical “icebergs” that sink startups…”
- Drs. Saxton introduce the concept of hidden debts. Non-financial obligations or expectations—that startups inadvertently accumulate but that can limit success or cause their failure.
- The Human Ocean:
- Beware the founder who has no passion for the problem the business solves—but also the founder who is so committed they appear unwilling to consider negative feedback. Good founders are passionate and persistent, but coachable. (Team has PEP (Passion, Experience and Persistence))
- Never split equity 50/50. Have a clear majority owner and decision-maker if there are two founders, or require majority agreement for major decisions if there are more founders.
- Look for a diverse mix of advisors who add functional expertise, industry knowledge, startup experience, and relationships with new customers and/or investors.
- The Marketing Ocean:
- Don’t try to target an entire market. (Segmentation)
- In the beginning, startups should be narrow and focused. Make it easy for the right customers to figure out what the product offering does.
- The Technical Ocean:
- Hide the solution until you’ve exhausted conversations about the problem. Seek out negative feedback. An entrepreneur has no better friend than a devil’s advocate. Pitch to someone who will give honest critiques. (But how to avoid those who are scared and will sabotage your idea?)
- Startups should avoid going straight from a back-of-the-napkin concept to MVP. A mockup or wireframe is an important intermediate step. Why?
- The Strategy Ocean:
- “Does not overly focus on one Ocean more than others” (from Iceberg Index checklist)
- The number one “debtberg” for startups to avoid no matter their size or stage of development.
- How should entrepreneurs think about uncertainty in business?
Episode Host: Henry Lopez is a serial entrepreneur, small business coach, and the host of this episode of The How of Business podcast show – dedicated to helping you start, run and grow your small business.
Books mentioned in this episode:
[We receive commissions for purchases made through these links (more info)].
- The Titanic Effect: Successfully Navigating the Uncertainties that Sink Most Startups – by Drs. Todd & Kim Saxton
- Made to Stick: Why Some Ideas Survive and Others Die – by Chip Heath and Dan Heath
- How We Got to Now: Six Innovations That Made the Modern World – by Steven Johnson
- Farsighted – by Steve Johnson
- Partnership Memo of Understanding – to help you determine the terms of your partnership agreement before engaging your attorney.
- The Titanic Effect online resources, including the podcast and blog.
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