People are perhaps familiar with the term “Unicorn Startup” that is used in the venture capital industry to describe a privately held startup company with a value of over $1 billion. Some of the more popular unicorns based in the U.S. include home-sharing giant Airbnb, video game company Epic Games, as well as fintech companies Robinhood and So-fi. However, being a unicorn is a rarity and even seems like an impossible dream for almost every entrepreneur. Therefore, another strategy to survive in a highly competitive market is being a cockroach start-up.
What is a cockroach startup?
The term may be new to you yet very easy to understand. A defining characteristic of a cockroach is that they are hard to kill. They don’t eat much and they are adaptable to new environments. A cockroach startup is a business approach that emulates these characteristics.
Cockroach startups focus on sustainability and profitability. Cockroach startups place less emphasis on growth and more on survival. The strategy assumes that perfecting the business model will take time and mistakes. Thus, it is critical to stay in business as long as possible. The company focuses on managing costs and having the flexibility to adapt to changing situations.
1.Charge money from day 1
When a product is free, there is no way to test the true value of the product. For users, when seeing something free, they have nothing to lose, so they will say yes most of the time. However, when seeing something that costs $1.99, now they have something to lose. If the users don’t truly value the product, they are not going to pay for it. For business owners, this is a disaster because they can’t directly measure how others value their products. Hence, by charging money, companies can discover their pricing, positioning, and cost structure.
2.Keep trying out ideas
An important component in operating a cockroach startup is trying a number of new ideas and measuring the results. When implementing a business, every detail matters. The company needs to determine which business approaches will work before they run out of funding. The faster they try out these ideas, the quicker they will learn and reach profitability, so the ability to create tests efficiently is important.
3.Products/Service is the key to survive
Cockroach startups are adaptive in nature as they can survive in tough conditions by having a real product or service. Usually, when a business starts picking up the right direction, founders tend to forget about the product or service and start focusing on getting funding. Whereas in a cockroach startup, the energies and money are always spent on improving the product or service.
In short, we can say that a cockroach startup keeps working on improving the products and services without spending much at its own pace.
A cockroach startup approach may be a way that entrepreneurs can adapt to eliminate or minimize outside funding needs for launching a new business. These are just a small part of our previous seminar talking about Cockroach Startup that we had last week. Our speakers were experts in the field including
- Mr. Vincent The Hung – strategy, market, and digital transformation consultant
- Mr. Nguyen Tan Huy – management and strategy consultant
- Mr. Nguyen Dinh Van – strategy and market consultant
They were sharing their valuable experiences and guiding on how to build a cockroach startup.
Keep updated on our upcoming events and make sure you won’t miss out again because who knows you might find the right direction for your business to survive and succeed in the competitive market.
SmartR is an EdTech company providing skill-based training solutions for individuals and organizations. SmartR applies technology to solve real-world challenges in the Learning and Development industry. SmartR offers online and offline courses covering a wide range of topics that include language learning, business skills, computer science, and personal development.