I’ve heard this line from everyone and their grandmother. Variations are ‘I have this great idea that I want to try’, ‘I’ve always wanted to start my restaurant’ etc…and my telepathic response always is ‘wtf are you waiting for?’. Well I should admit that those are the smart folk. Most people know that there are enough reasons not to trade a steady pay check for an unpredictable lifestyle. Regardless, I thought it’s about time I wrote for those foolish enough to consider indulging in the entrepreneurial call.
About 8 months after a major media launch Google announced that it is going to be canning ‘Wave’. ‘Wave’ apparently did not gain enough momentum to transform into a tsunami and ended up little more than a ripple. Bad puns aside, the case illustrates that even talented proven teams, like the Rasmussen brothers who also gave us Google maps and huge companies like Google who gave us, well…the rest of the internet :)… can fail at making a product succeed in the market.
Get a real job:
Statistics show that 8 out of 10 businesses fail within the first three years. I’ve also read (though I cannot find the link) that an average entrepreneur goes through 20 ventures before getting it right. So entrepreneurship is definitely not for the faint of heart. Imagine being fired from 20 jobs prior to finding one you like. It can take its toll.
In other words, statistically, one is more likely to make money at a job than in their own business AND psychologically (even without considering that it’s a lonely climb) most people are probably more equipped to work for someone else than to work for themselves.
In my first post on the subject of entrepreneurship here are my thoughts on what can be considered the two ‘book-ends’ of the entrepreneurial process:
- The Idea
- The process of Selling
The idea is not that ‘great’:
Many budding entrepreneurs are convinced that the initial ‘Idea’ is worth its weight in gold. They are sure that once the product or service is set up or manufactured, consumers will appear in droves. Build the website, set up the distribution channel or restaurant and away we go! After all, it’s a great idea!
From my experiences as an entrepreneur as well as helping other entrepreneurs move their products to market, I hold the view that the ‘Idea’ by itself is merely a catalyst to the whole process. Optimism is a necessary trait for launching a business. However, it can also be an impediment if no thought is given to how the idea is will be presented to and adopted by the market. Building a product is just the start of the battle. ‘Build it and they will come’ is not really true as most entrepreneurs find out. If Google with all their marketing power, reach and media resources could not get the formula right, it’s not going to be easy for anyone else either. The newer the product or service, the greater the risk… as the Rasmussen brothers have confirmed with their Google ‘Wave’ experiment. In other words, the risk is generally lower if you have a proven product, brand, or service, like your grandfather’s jewelery store passed down to you vs. a franchise vs. a totally new concept in fine dining or technology.
I’ve built it but I cannot sell it:
I’ve often been approached by people offering me an equity in a product if I help them build the technology, website, design etc. It seems like a fair deal at the outset; their idea, my efforts. Not really, considering that if the product does not sell, my efforts are going to be in vain. Any percentage of ‘zero’ is still ‘zero’. For those with similar offers, it’s a good idea to look for the marketing commitment/resources in terms of budget allocated to actually ‘sell’ the product. Educating the customer about a product or service is expensive and/or time consuming. If the entire budget is spent on building a product that nobody knows about, everyone is going to be left with ‘zero’ by the end of it.
Social media tools have made it easier to educate a customer about a product or service. These tools provide businesses easier access to the customer. However, as businesses learn about these tools they also compete with each other for customer attention, increasing the noise that the customer eventually blocks out. Remember those banner ads that you now know how to ignore?
In this environment if one does not have the resources to help stand out from the crowd or at the least use these tools to build relationships using social media platforms, the chances of success diminish. Creating product awareness is often not enough to ensure product/service adoption as once again, the Google ‘Wave’ example shows. In the case of online products, adoption is still a long way from actual profitability or even revenue (in some cases…read on Twitter’s challenges in this regard).
Often the ‘idea’ person is totally unaware about the long road to product/service adoption in the market place, let alone profitability.
Using rapidly evolving social media marketing strategies is a skill in itself. As someone who handles social media accounts including twitter and facebook for my clients, I should probably mention the common mistakes some entrepreneurs make. Too much for this post, maybe later!
Are you a fool?:
Are you? :). Am I being too negative? Well, there’s a reason for the high number of failures in business. At the same time, one has to know that these failures are what help make your next steps or venture even stronger. After all, someone has to create those ‘secure’ jobs everyone likes. That is, if you are foolish enough to give it another go.
Video of Steve Jobs – ‘Stay hungry, stay foolish’.
More to come…
- 3 Effective KPIs to Keep Your B2B SaaS Marketing Efforts Revenue Focussed - February 17, 2020
- 4 Contrarian Management Insights from Disney - February 2, 2020
- 5 Practical Steps to Increase Lead Generation as You Scale Your Business - December 2, 2018