Due to all the upheaval these days involving the economy, the virus, and the environment, it’s no wonder that so many folks are reconsidering their future. Many are thinking about starting their own businesses to address these challenges. Many have been thinking about starting their own business for years and the upheaval is the catalyst to finally make the move to self-employment. Still others are being forced into self-employment as their jobs evaporate.
In this 3 article series, we are sharing our personal experience of over 30 years in business and creating a world class brand. We have broken down our advise to new entrepreneurs into three of the most common mistakes that most startups make.
Thinking you’ve built the better mouse trap
New entrepreneurs have a tendency to fall in love with their product or service.
A “Cool” Idea
They are convinced that the world is going to knock out windows and kick down doors to get to them because what they have to offer is so great.
It solves a pressing problem, has plenty of value, and it’s, well, just plain “cool!”They’ve put tons of time into the logo, the package and the compelling catch phrase. All their friends like it; in fact, everybody they know says they would buy it.
They’ve spent hours perfecting it and already have plans for expanding the line.
The problem: their ego is in overdrive.
Research? Market testing? That’s for the other guy.
They mistakenly figure the product’s too good to fail. If the right people just see it, they will fall off their chairs and buy it, promote it, and distribute it. It will be on every website and in every bricks-and-mortar store from coast to coast.
They’re sure of it! In fact, they put most of their start-up capital into developing it, testing it, and getting it ready for shipment.
So what’s the problem with thinking the product can win the day singlehandedly?
After all, isn’t the media constantly proffering up the latest “wish-I-thought-of-that”instant millionaire?
Guess what? Having a fabulous idea is not good enough.
Warehouses are filled with great ideas that never made it to market. They’re just sitting there accumulating storage fees – until the proponents go bankrupt. Then this “fabulous idea” is sold at bargain-basement clearance prices, never to be heard from again.
It’s true that your product or service must be terrific, outstanding, and value-packed, but that alone won’t do it, no matter what you hear form the media.
Reporting on the heavy lifting that goes into most successful products doesn’t sell subscriptions or attract viewers.
The media makes it look easy. Just invent a better mouse trap and presto! Instant millionnaire ! This panders to our desires to find quick and easy solutions that prove that the product itself drives sales.
Well, after a period of proven success, that may be true, but you won’t be around to see that day if you can’t get your product to market and keep it there.
Here’s what often actually happens when entrepreneurs get tricked into believing a great product or service is the critical key to startup success.
- You ignore the time and cost of managing the distribution channel until it’s too late and your sales stop for “surprising and startling” reasons that you never considered.
- You have a false sense of security because you can control your product but fail to consider that you can’t control the market.
- You forget that your product is in a category controlled by buyers who care little about your features and benefits.
- You tend to blame the salespeople for not performing and thereby become a disempowered victim.
- You budgeted too much for production and not enough for sales and the ultimate cost of sales.
- You get in a jam and have to unload product at a big, unsustainable discount and now the market demands that same price on an ongoing basis.
- You get the idea that no one has thought of your idea yet because you don’t see it anywhere, and you fail to understand that the reason you don’t see it is because you believed the product alone would do the trick, and therefore it never made it to market.
The Big Picture
Yes, you do need an excellent product or service that everyone wants or needs. But to think that excellence by itself will result in success is a misconception that causes many inexperienced businesses to fail. Focus on market access, the product-market fit, distribution, merchandising, sales, and the cost of sales.