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The Low Risk Startups that I have encountered in my life

July 2, 2015 by Lei Jin in Experience and advice, Our Blog

I have seen some failures and success in my life. For the ones who succeed, I think they made it partially because the business they started are low risk by nature, due to the fact that nearly all the founders have distinct competitive advantages, which they gained either purposely or by pure luck.

Bob was someone I used to have as a tax accountant along time ago. Bob used to be a senior manager in IRS, also worked in personal and business tax service for well above 20 years. Bob eventually started his own tax service franchise, and grow to tens or maybe even over 100 stores. I don’t know what happened, but this guy eventually disappeared. Anyway, my point is that Bob has a clear advantage in the sense that he knows a lot more than most of his competitors do, and he started a business, which is closely related to his competitive advantage.

Back in the old days, when my company was becoming a major player in PC-camera market (camera with USB to be connected to PC or embedded Notebook camera), the sales woman of ours, who was living in ShenZhen, having established good relationships with nearly all the major camera manufacturers, decided to quit and start her own distribution company ( sell our products to manufactures while making a percentage of profit). Obviously, we agreed because it was a win win situation, and the lady had positive cash flow from day one. She eventually distributed many more different product lines to the very same group of customers which made her company a significant player in that market. She made a successful company because she knew every inside out of the industry before she started her own company.

I have met many brilliant engineers and business people over the years. Most engineers have complained about either the lack of SEO experience or not enough knowledge on social media, while the number one complain from business people is how hard it is to find a software programmer who would be willing to work not for money but equity. Well, for business people, tough luck. But for the engineers, I guess I don’t understand why don’t they establish competitive advantage by looking for jobs on SEO or social media PR related works, which might sacrifice income or even future perspective, but eventually might turn out to be a strong advantage by having the combination of App development, SEO, and social media PR.

While I was living in California, a friend of mine wanted to open his own restaurant franchise, which sounded like a long shot because his job (I still don’t what his job was) wasn’t related to restaurant. However, this guy is so determined that he actually landed a job in a franchise restaurant and worked his way up to become a store manager. After a couple of years, he quitted his job and opened his restaurant of his own, and then about a new restaurant every year since. Surely, everybody fantasized about restaurant business, at least once in his life. But this guy is the only one I know of, who literally worked his way in.

Well, none of the examples above are in a hot market. I guess it is more important to get in a business, which is related to your competitive advantage than some “hot market” where you can’t stand out.

For the ones who don’t have much competitive advantage, it would never be too late to start having one.


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Article by: Lei Jin

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  1. Bo Wang Log in to Reply

    Advantage is a must, otherwise why you succeed? However, advantage is also relative and dynamic, as Jin Lei mentioned here. At the end of day, time and effort are among biggest differentiators.

  2. Huiming Gu Log in to Reply

    Well said. To be successful, do only what you do best.

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