It's easy to obsess on the big customer or the hope of huge viral success. That's not what it's all about.
While you are waiting for that amazing Instagram moment when the entire world beats a rapid path to your door, you’ve got to remember to take care of business. I mean that literally. It’s easy to be so focused on the big score--or on the promise of massive viral uptake of your offering--that you lose sight of the many opportunities right in front of you. Opportunities to make deals that can help pay the bills and keep the business in business.
Sure, a bunch of small deals aren’t as exciting as viral world domination or even highly-visible big wins. And chasing too many rabbits can be painfully distracting. But big deals present all kinds of issues of their own. They take a lot of time and resources to get done; they’re generally a lot less profitable, and they spread you and your team far and wide. In addition, it’s always risky to put so many eggs in any one basket.
The old dot.com idea of getting big fast probably still makes sense if your only goal is building a business to get bought by somebody bigger. But even if that’s your idea, there’s no guarantee that you’ll get there. Going solely for the gold may be actually betting the whole business on getting the big break.
A smarter strategy is to allocate a little time and talent to the B-to-B market, which will often be practically standing there knocking on your door. If you’re concerned about your hot new offering leaking out before your grand world-wide launch, you can white-label it, strip it down, price it up, or impose other time, location or distribution limits on the B-to-B version.
So while you’re pushing that big boulder up the hill, getting ready to glide down the other side, and waiting for the avalanche of accolades and adoption to come, don’t forget to take a little time to investigate these additional opportunities:
(1) Limited Players
Are there one-off applications, promotional uses, or other ways that you can provide your product or service exclusively to a limited number of partners, brands, vendors, or verticals? You want to give your new partners a marketing boost, a competitive edge, a novel solution, or a gee-whiz gizmo that will set them apart. For that, they’ll happily pay a fair amount of money. To them, it’s a marketing cost or promotional expense, which you can bill as a bulk payment or fee-based transaction rather than on a per-user basis.
(2) Alternative Markets
Are there commercial uses for your product or service? Look for those that won’t risk large-scale exposure to consumers and that can be priced on a service provider or system solution basis, rather than by the bite. Keep in mind that these types of deals can often be based on more complex uses of your offerings because of the differences in the skill levels and training of the would-be user populations. You may even find that there are groups of users already familiar with and capable of adopting your new tools and technology, ready to apply them to existing problems in their businesses.
(3) Different Geographies
Are there relatively closed markets where you can launch versions of your product or service? As much as we hear about global connectivity, you can do a great deal of testing and market trials under the radar by simply selecting the right geography. There are many towns untouched by the democratization of data. The trick is to get in, run your trials, and get out as quickly and quietly as possible. This approach won’t really help you test product virality, but it’s fine for determining use patterns and basic product viability.
You always need a Plan B while you’re waiting to be wonderful. A plan that keeps things moving and makes you some money in the interim is a pretty nice straddle. You’ll also learn, that in almost every case and business, the biggest money turns out to be in the smallest sales.
HOWARD A. TULLMAN is the CEO of 1871 – Where Digital Startups Get Their Start and the General Managing Partner of G2T3V, LLC and of Chicago High Tech Investment Partners. He is a member of the Chicago NEXT & Cultural Affairs Councils and the Illinois Innovation & Arts Councils; an adjunct professor at Kellogg; and an advisor to many start-ups. He is the former Chairman and CEO of Tribeca Flashpoint Media Arts Academy. Over the last 45 years, he has successfully founded more than a dozen high-tech companies. @tullman @tullman