Entrepreneurship Is The New Black - Don’t Be In The Red

For years, the interest in entrepreneurship has exploded. “Back in the day” there were no majors for entrepreneurs. Yes, people started businesses. But there was no degree in it. If you had a passion for something, you started a business and either sank or swam. Now there are degrees, incubators, consultants, and organizations to help entrepreneurs. Also, people literally claim their job title is “entrepreneur”.

Since I started a business and am now a coach, I find that entrepreneurs are inclined to find my services attractive. And I can tell you that it is incredibly common for people to jump into the water without doing the legwork to make sure their idea succeeds.

And given the preponderance of people who want to start their own business and retire when they are 30, and the rate of failure for new start-ups, it is important that people do their homework before they invest too much time or money.

What is an idea that has legs? It should have a handful of elements:

More Than Just Interesting

My first rule of thumb is that you need to be offering a product or service that people find compelling. Interesting products or services will sell a bit. Compelling products can sell like gangbusters. Interesting would be Google Glass. Compelling would be the iPhone.

Vetted

A lot can be done with a small investment to verify the attractiveness of an idea. It can be as easy talking to friends, family, and people you meet to get their reaction. And be careful for confirmation bias where anything you hear feels like confirmation of your idea. Watch for words like “that’s interesting” or “I’d consider it”. That is a clue that the idea may not be compelling. Further tests that can be done include:

• Develop a prototype and run it by potential customers

• Put out a web page pitching / selling the idea with a delivery date in the future (fake door test)

• Interview potential customers at a place where they may typically find the product

• Run focus groups

• Do competitive analysis to get a sense as to what else is in the market and how successful that product is

A Plan

Most entrepreneurs want to jump in head first. A little plan can help make that jump less traumatic and improve the odds of success. The planning should minimally include the following:

• Problem. What problems are you solving? How many people have that problem? How urgent is the problem to solve?

• Target customer. Who is the target customer? How can you find them? If your target customer is “all people”, you need to narrow it down more. Even “all software companies” is too large. Finding your niche is important because without a niche, you can’t find the customer.

• Value. What value do you provide? You need to think about this from the customer’s perspective. And this isn’t a list of features or capabilities. This is what they get from buying your product or service. For example, a therapist provides marriage counseling. The value might be a happier, healthier, and more trusting marriage. A luggage company provides luggage, but their value could be to travel with ease. Answer the question, if they bought your product or service, how would their lives be better.

• Advantage. How will you be different and better than other solutions to achieve that value? Be careful not to assume that it is just other companies doing what you do, rather it should be companies that deliver the same value. So for instance, for a therapist, they may also be competing with self-help books, religious institutions, coaches, etc,...

• Mission, Vision, and Values. Knowing what you want to be and what you want to do in the next 3 - 5 years to get there helps ground you in your business. These can always change, but defining these gives you a north star. As one of my clients recently said, if you want to get out of the field, pick a point on the fence and start walking towards it. If you don’t know where you are headed, you may just wander around the field and never get anywhere. Minimally do enough work to make sure you are heading out of the field vs. wandering around in circles or heading to the dugout instead of the outfield. And as a refresher:

• The vision statement should state what you want to be in 10-20 years. It should be a huge stretch goal and possibly even unrealistic. (start with a noun)

• The mission is how you want to get there (start with a verb)

Google’s vision statement is to provide access to the world's information in one click". The company's mission statement is "to organize the world's information and make it universally accessible and useful"

• An Elevator Pitch. You need a succinct and clear way of describing the problem, target customer, and value you deliver to people you meet. Don’t get caught in the trap of explaining all the details. Explain the problem, the value, and the target customer. The most compelling elevator speeches I have seen start with the problem. “Have you ever,...” and then state that my company helps <target customer> who <have said problem> <value statement>. It could be something like “Have you ever wanted to make a change like changing careers or moving to a new city and struggled to take the first step? I help people who want to make a change and are struggling to take that first step take action and ultimately reach their goals”

• Differentiation. Once you understand the competition, you need to ensure you have differentiated your product by either price or features. And the ultimate differentiation is your mission. Leverage that to create a differentiating message to the marketplace.

In summary, to avoid turning your idea into a cash drain, make sure it is solving a compelling problem, test the idea before investing all your hard earned cash, and put a plan together so you have your roadmap to achieving your goals. There is a lot more that is needed to succeed including great marketing, sales, and support. But that is a topic for another time.

If you are have an idea and want a coach to help you tackle these necessary steps, feel free to reach out for a free discovery call to see how coaching can help you reach your dreams.