Pandemic-induced supply chain issues persist. Consumers are tightening their belts in preparation for a recession. And high costs are hurting bottom lines. There is no way around it. unpredictable challenges hit entrepreneurs at every turn. But where some see uncertainty, Shopify President Harley Finkelstein sees opportunity.
“The numbers show that there are now more people starting businesses on a monthly basis than ever before,” says Harley, who has been an entrepreneur himself since the age of 13. What started as a surge in new businesses at the start of the pandemic. remained at historically high levels even until 2023.
History also shows that some of the world’s most successful companies were launched during economic downturns. “If you look back to 2008 or 2001, when you have a recession or the threat of an actual recession, you do see more entrepreneurial activity,” Harley says.
In 2023, you can spend an hour or two and create a business, hit Launch, and immediately start selling to a global audience.
And today, technology is better equipped to meet the needs of a changing world, enabling a new breed of entrepreneur to launch. “In 2023, you can spend an hour or two and build a business, launch it and immediately start selling to a global audience,” Harley says. He points to the growing number of channels and options now available to start-up business owners. “You can use YouTube live sales, get listed on Google search, or take a point of sale and open a pop-up.”
Ahead, find out Harley’s top tips on how founders can win over wavering customers, flex their flexibility muscles, and protect their businesses in 2023, which he calls “the year of the entrepreneur.” (You heard it here first.)
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Build with intention
“There was a time when you could make a bunch of mistakes, it just didn’t matter that much. You try something, throw it against the wall, see what sticks. If it sticks, you scale. If it doesn’t, it’s not a big deal,” Harley says. “I think now it is necessary to be a little more precise. You have to be a little more thoughtful.”
While it’s tempting to get excited about trying new things, Harley urges entrepreneurs to be intentional about their “key quest.” Each idea must be tested through a framework that determines whether the new idea leads to a main quest or a side quest. And if it is the last, then it is not a place to invest energy.
“There are no unlimited resources at the moment,” he says. “These are difficult times. Interest rates have risen, financing is more difficult at the moment, the economy is in an uncertain state. Return on ad spend has declined.” As a result, successful companies will be those that use resources wisely to advance the central brand mission while avoiding distractions.
Think small for big impact
“There’s no question that customer acquisition costs have gone up,” says Harley. “It’s more difficult today than it was a year ago, two years ago.” He points to the “1,000 True Fans” theory, which says you can only make a living with 1,000 die-hard fans who will buy anything you produce. Harley took the same approach when building the Firebelly Tea brand, which she co-founded with partner David Segal, developing a loyal following of brand fans who promoted the Firebelly story by word of mouth.
The brands that will be most successful in the future will have a thorough understanding of how their customers want to buy.
As more people start businesses, that means more competition. “If you’re a coffee brand, Maxwell House has more money than you, Starbucks has more money than you. They will beat you when it comes to the advertising platform,” says Harley. “The one thing they don’t have is you, an entrepreneur.” He advises entrepreneurs to lean toward authenticity and uniqueness to build meaningful relationships and generate loyalty with customers.
Meet your customer where they are
“The brands that will be most successful in the future will have a deep understanding of how their customer wants to buy,” says Harley. Your customers want to buy from you in person. Do they prefer to shop on YouTube or TikTok? Sell in those places, Harley says. “If you’re too caught up in one particular wave, and that wave decays or goes out of fashion, you’re going to get screwed.”
For her own brand, Harley enjoys the flexibility of using Shopify to experiment with selling through different channels, including through multiple retail partners. “When one warms up, we double down. When someone catches a cold, we withdraw from it,” he says.
Embrace uncertainty, grow resilient
“Most people think that flexibility is something you either have or you don’t,” Harley says. “And actually it’s not. They learn flexibility.” In these times of economic uncertainty, now is the time for entrepreneurs to develop resilience.
The epidemic divided entrepreneurs into two groups, he says. “Some ran after the sand and grabbed their towels, while others ran for the surfboard and surfed,” says Harley. “What about those who surfed? They are hardy like a buck.”
Harley challenges founders to embrace uncertainty and develop resilience through challenging entrepreneurial moments. “There’s no doubt in my mind that this won’t be the last time dirt is going to be hard,” he says. “Every time you struggle, you build new resilience and eventually you will win.”
. . .
As 2023 unfolds with all its uncertainty and burdens, Harley is adamant. there’s never been a better time to be an entrepreneur. “Entrepreneurship as a tool for survival happens to be incredibly effective,” he says. “It’s not easy, but it’s effective.” There is a reward for those who choose the rocky path. “We’re going to look back on this period as a time when some great companies, great businesses, great entrepreneurs were developed, created and scaled.”