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I’ve been kind of a serial, organic entrepreneur my whole life. If I came across a problem, and inspiration struck, I would start a new business; working long hours, pouring time and energy into bringing a new product or service into the world.
Satisfying? Rewarding? You bet. But more often than not my startups ended up with… mixed results.
Pursuing different ideas on a semi-regular basis is a fun way to be an entrepreneur. There’s always a period of sheer excitement that comes with working on a ‘great new venture’. But what I learned is that it often takes time to fully understand an idea. By which I mean,
I wasted a significant amount of time and energy (not to mention bootstrapped capital) charging into a new and exciting startup before exploring things fully. And, ultimately, I would have derived far more success and wealth if I had changed a few bad habits early on.
Here’s what happened…
I used to write a lot of technical books on programming and Web development – before I realized I could help people build websites for free far quicker and easier online. Back then, my publisher used to issue quarterly royalty statements that would show how many books were sold and what my commissions were. Most publishers were the same.
Keeping track of sales on a quarterly basis was like torture, so I wrote a script that accessed the Amazon backend, via their Product Advertising API, to track the sales ranks of my books on Amazon. Eventually I upgraded this into a nice chart, and then added a few more bells and whistles, like sales estimates, to make it more useful.
Not long after I realized that other authors might find what I had built for myself useful. I started an online service offering Amazon sales tracking to authors and publishers for as little as a few cents per day. No dice. No one was interested.
I spent a lot of time developing a usable online service, coding by hand. But, after a year, the business folded.
Because I had rushed into the idea without exploring all the possibilities. I hadn’t consulted with anyone else about the idea – preferring to work on it in isolation. I spent all my time doing technical work and very little time marketing and promoting. I was exhausted by the end of the first development cycle with nothing to show for it.
Frustrated. Demotivated. I moved onto other things. Years went by without me giving it a second thought.
One day, quite randomly, it occurred to me that since a lot of people sell stuff on Amazon via their Associates program,
Knowing how much, when and why their competitors were selling would be useful to a completely different target market (from the book authors I had originally pursued).
This realization proved to be a turning point.
An Amazon sales tracking service that could monitor the sales of competing products for unusual behavior, like a sudden surge after a blog review or media mention, and alert clients in virtual real-time would potentially be hugely valuable. It could tell you (as a small business owner) about the marketing, advertising and promotional campaigns competitors were using successfully – allowing you to build up your own high return marketing playbook.
Not to mention retailers trying to source the best new products for their own stores. Marketers measuring the impact of their promotions. Writers, bloggers and journalists gathering data to use in their articles.
All of a sudden I had completely new markets for a service that hadn’t found any customers before (well, not a viable amount). These new niche audiences were interested in the service.
Within a few months of taking this concept to the public and pitching target partners, revenue started trickling in. The more the service grew, the more customers recommended it to their friends and colleagues and the faster it grew. The business succeeded; and has racked up over 5000 paying customers to date. It’s also regularly used for research purposes at prestigious institutions like Stanford University, amongst others.
To get to the underlying point about this particular story, here’s a list of lessons I learned from this experience (amongst others) that will hopefully prove helpful to you too.
It can be the hardest thing in the world to put your passion and energy on hold to do a whole lot of boring business planning and research. But it really has to get done.
Starting a business is not sprint. At best it’s more like the 5000-meter steeplechase you see in the Olympics; with people falling and tripping and trampling each other. There are obstacles in the way. The path is never straight. It’s not easy.
Passion and enthusiasm need to be kept bubbling away. They keep you going for the long haul. Let them burn too brightly and you run the risk of burning out before the business has time to become established.
Not taking the time to fully explore the potential of the idea was a huge mistake on my part. In this instance where I went wrong is pretty obvious, but it’s not always like this. I’ve worked on other ideas where the true potential was a long way from the original business idea and model; requiring a lot of time and planning to bring to the fore.
I understand why entrepreneurs are hesitant to share their business ideas with family, friends and colleagues. There’s always the risk that someone will take the idea and do it themselves. Sure; I concede that point. Although it’s still hard to get to market – even when the idea is stolen.
But while there are risks, there are also advantages. Really big advantages.
Assuming the people you share an idea with have (to a reasonable degree) your best interests at heart they will often spot angles, connections, and new potential that you might not.
Different people have different social networks. They have different business connections. They have different information rattling around in their heads. All of this means that they can bring tremendous value to your idea for very little effort. They might know your first customer. They might know your first investor. They might know how to save on costs.
They might mean the difference between success and failure because they can help you shine a light on less obvious areas and aspects of the idea. I would strongly recommend you find a copy of Steven Johnson’s Where good ideas come from because it explains why it is so important to involve more than one mind in virtually any creative process.
Heard of a Mminimum Viable Product, or MVP? It’s a useful concept for entrepreneurs because it represents the earliest point at which you can start trying to sell your product/service to the first customer. Find out what your minimum viable product is and work out how to get there as quickly as possible.
Get out there and meet the companies and people you need to get started. Find and build relationships with manufacturers. Find out where your warehouse or factory is going to be located. Speak to people. Build alliances.
There are two advantages to this:
I spent all my time in a dark room writing code and improving a service no-one knew about and no-one had expressed any interest in (mainly because I had approached only a small sub-section of the overall market). If I had reached my MVP and dedicated the rest of my time exploring my niche I might have improved the chances of succeeding the first time around.
No matter how much time and energy you pour into understanding your own idea and how it will fit into the market. It’s quite likely that the market will want to take you in strange new directions. There’s absolutely no point in being sentimental about the direction your business takes.
While each business is unique and what works for one may not necessarily work for the other, the important part is to always be on the lookout for opportunities – whether they require a pivot or not.
You, like me, might have a viable product but have not fully explored all the possible markets. You might have a product that needs tweaks and improvements before it will take off. Your product might be right for the market, but needs a different business model. The only way you’ll work out all the kinks is to be open to new ideas and information, make a big effort to interact with a diverse range of people, and be dedicated and persistent in your efforts.
I sometimes wonder how many other failed startups were sitting right on success’ doorstep when they gave up? Perhaps all that was necessary was looking to take the business in a different direction, or the idea from a different perspective.
Have you succeeded or failed in business? What other advice would you add to this? Share your thoughts and experiences in the comments.
The announcement that the U.S.
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