By Art Reisman
I often get asked to help friends, and friends of friends, with flushing out their start up idea’s. Usually they are looking for a cheerleader to build confidence. Confidence and support are essential part of building a company; however I will not be addressing those aspects here. I am not a good predictor of what might take off, and a marginal motivator at best, but I do know from many failures as well as successes, the things you will need to give yourself the best chance of success. What follows are just the facts, as I know them.
1) You don’t have much of a chance unless you jump in full time.
If you are not willing to jump into your venture full time, you are stacking the odds against yourself. Going halfway is like running a marathon without training and expecting to win. So be honest with yourself, are your doing this as a hobby or do you expect a business to pop out? I know the ideal situation is to start as a hobby and when the business grows a bit then go full time, you can also win the lottery but its not likely. Even with a unique idea and no obvious competition you are still competing for mind share. Treating your business as a hobby is akin to studying for a final when you don’t know what is on the test. To insure a good grade you’ll need to know more than everybody else taking the test which means you need to study hard.
2) If your idea requires a change in culture or behavior you are less likely to succeed.
There are literally trillions of ideas and things you can do that might be successful given a little energy. Too often I see entrepreneurs stuck on something that requires a change of consumer behavior beyond their control. This is not to say their ideas are bad or that a change in human behavior is not in order. The problem is you will have limited time and resources to promote and market your idea. The best inventions probe high demand low resistance niches , meaning they fit into a segment where there will little adaption resistance.
I worked with a company that invented a shoe that would allow you to track your children. One of the behavioral show stoppers was that you had to put the shoe in a charger every night. Who puts their shoes in a charger? It’s not that it could not be sold with this limitation, but the fact that it required a change in behavior which made it a much less attractive idea.
Although one might assume that text messaging on phones just happened , from its roots in the Japanese market of the early 1990’s, it took 10 years to become commonplace in the US. The feature was an add-on to product already in a channel and generating revenue hence it did not require a house bet from existing service providers to bring to market. You most likely will not have this kind channel to leverage for your product, in other words, it takes a special set of circumstances to influence human behavior and be successful.
3) Your idea involves consulting or support services
If your goal is to get immediate income and become your own boss, then consulting and services are relatively easy to get going in. Yes you will need to work hard to win over customers and retain them, but realistically if you are good at what you do, income will follow . The downside of consulting and support is that it is very hard to clone your value and expand beyond your original partners. For this reason, the tips in this article are geared toward bringing a product to market.
Hopefully you don’t have too many enemies but the point of this statement is validate your product need. Selling a book to your family and friends through courtesy buys is good for some feedback and worthwhile, but you will never know how your product will fare until you are converting random strangers. If you can sell to somebody that hates you personally then you’ll know the product has staying power.
5) Test Market with small samples
The late billy mayes had it down to a science , take almost anything produce a commerical and sell it to a small market with a late night TV advertisement. Obviously this validation is only good for home consumer products, but the idea is to test market small.
6) Sell the idea without the goods.
You need to be careful with this one. The general rule here is, do not under any circumstance take any money unless you have your product in stock. Either that or fully disclose to potential customers that they are pre-ordering a product that does not physically exist. If you break these ground rules you will fail. I learned this trick from a friend of mine who wanted to sell Satellite dishes when they first came out. They did not even have a Franchise license, but they took out a small Advertisement in the local paper for Satellite dishes and the response was overwhelming , they just told inquiries they were out of stock ( true statement) and then proceeded to get a Franchise License and follow up with their inquiries.
7) How do you eat an Elephant?
One bite at a time. I define success as selling something , anything and making one dollar, once you have made a dollar you can concentrate on your second dollar. Great if you can go faster, but unless you are really big now as a company, there will be plenty of time and space to grow your product into. You don’t need sales offices all over the world that is just a distraction.
8) Ask successful people to help and advise. Most entrapanuers and business people love to help others get started and if you have a good idea they can help you open doors for oppurtunities but you must ask, and you must be sincere. Everybody loves the underdog and is willing to help. Remember your brother in law, that is a sales rep for Toshiba, is not who I am talking about. You need to get advice from people who have started companies from scratch. Nothing wrong with brother in law at Toshiba, but the if you are doing a product spend your time getting advice from others who have brought products to marker.
9) Stop worrying about the competition. Just do what you do best. You will often to differentiate yourself from the competition. I politely keep the subject on what I know , my product, and how it fits the customers needs. Never bad mouth a competitor even if you believe them to be scum an astute customer will figure that out for themselves. Let somebody else bad mouth them.
10) I am waiting to be in a better financial situation before I start a company
Time on this earth is way more valuable than the any dollar you can make. Letting years go by is not a rational option if you intend on doing a product. Your financial needs are likely an illusion created by others expectations. If you have to live in trailer without heat to make ends meet while developing your product you can do it. In fact, the sacrifices you make will be far healthier for your children than that new Nintendo game. It just amazes me how many people will borrow 100k and give it to a school for a childs education while at the same time are afraid of investing in their dream with time and savings.
About the Author:
Art Reisman is currently CTO and Co-Founder of NetEqualizer. He has worked at several start up companies over the years , and has invented and brought several technology products to market, both on his own, and with backing of larger corporations. Including tools for the automotive industry.
Practical and inspirational tips on bootstrapping