Recently in the United States, we saw the election of Donald Trump as our next president, succeeding Barack Obama. President-elect Trump was not favored to win. Rather, it was his opponent, Hillary Clinton who was favored. As election results poured in pundits on both sides of the aisle and most of the media and press pool were stunned, shocked at the results. Donald J. Trump, with more than the required 270 electoral votes, won the Presidency.
In this post, I’ll tell you why starting your own business or creating a startup company is just like a presidential campaign.
First, businesses and entrepreneurs start with a basic assumption.
Businesses, and entrepreneurs especially, start with a basic idea that they are going to solve a problem or provide a service. Whether it’s through a mobile application like iPhone or Android, or a physical product like a tool or item, they think that what they are creating will solve a problem. In the same way, a candidate for president thinks that He or She will be be the solution to a wide array of problems.
Second, businesses and entrepreneurs test the market.
When a solution is formulated and the idea is fleshed out, the businesses usually goes to market with a “minimum viable product”. This is something just enough to present to the public to gauge interest and start a conversation toward developing that product. It can also show that what the founders or business originally conceived was a good start, but what people really want is something different. So, given the research and testing of the product, the business tweaks the product or service to be more in line with what the customer wants. In a political campaign a candidate may launch an exploratory committee, to see if there is enough interest for him or her to enter the market (campaign). He or she will test messaging (the content), how to present it (the packaging), and the possibility of success. Once answers are found, the candidate may or may not decide to enter the race.
On a larger scale, multiple candidates enter the field and are all testing their messaging and potential to win. Polling companies compile data and present to committees, debates are scheduled and held. Candidates will meet voters face to face and make conclusions about who is best to run.
Third, businesses and entrepreneurs raise capital.
Business activities take financial support to do what they do. So, with product in hand or service to present, entrepreneurs seek funding for their idea. Think Shark Tank. Think The Apprentice. Also, think smaller events like 5 Across, Pitch Competitions, and others. These events are geared towards connecting the businesses with venture capitalists who would see promise in the product and commit funds to help with the startup or business’s funding to continue to develop and sell their product. On a more traditional level, businesses use a business plan and supporting documents to help borrow money from banks and lenders to help get the business off the ground.
Political campaigns lobby for donations and support from individual donors and others who would support their candidacy/product. Where this is vastly different is the rules and regulations around fundraising for candidates and the way people can give and how campaigns can accept that cash.
Fourth, businesses and entrepreneurs may need to pre sell their product
A clever way to acquire funds for starting up a company is to often pre-sell the product before doing any kind of development. In this way, the company stays lean and can deliver on their promises to investors. Businesses are also able to grow their user base to show potential investors that they have a lot of people on board with the product already. So it’s actually a really smart idea.
Perhaps there is no better way to show that a campaign is like a startup than in this way. You could argue that an election is nothing more than a massive pre sell of a product. Throughout the election (and this assumes a general election) campaigns perform voter identification through phone calls and door to door work to tell which people will vote for their candidate on the election. And, 72 hours before the polls open, they contact those voters to ensure that they get out to vote. Sometimes, even driving those voters to the polls to make double sure.
Finally, businesses fail and businesses succeed.
As with any venture, businesses do well, and some businesses fade away into history closing up shop. While some stay around for several years and indeed become icons of history, like Macys, IBM, Apple, McDonalds, etc. many fail and go under, like CompUSA, Blockbuster, Winn-Dixie, etc. These businesses probably started strongly, were managed well, and had a lot of success throughout the time they were in business, but through the market and changing economy failed to adapt to changes or their leadership failed to manage the company through those times, ultimately leading to failure.
Clearly, in a political campaign, one candidate wins and one loses. Their win is based on a myriad of factors just as the campaign’s loss. Management may have been lacking, funding short, or the product (the candidate) wasn’t what people really wanted.
In the most recent election we saw that many people assumed that Mrs. Clinton would be the obvious winner, yet at the end she lost because of a myriad of factors. I think times of political campaigns should reaffirm what people know about basic business fundamentals and the aspects of a market driven economy.