The following excerpt is from the book Breakthrough Entrepreneurship, now available in paperback.
"This is the elevator pitch that I have given probably close to a thousand times," Robin Chase told an interviewer who asked her to describe Zipcar's business:
"Zipcar parks cars throughout dense metropolitan areas and university towns. You make a reservation online or by telephone for a very specific car in a specific location, and that reservation is sent wirelessly to the car. You hold your membership card on a spot in the windshield, and that unlocks the door, enables the ignition, and opens the billing record. People drive roundtrip and park back in that same reserved parking space. The billing record is closed, and you are all done."
That sounds pretty sensible now that it exists. But what steps did Chase take to go from a casual conversation about an interesting idea to building a real company? She had a few mentors and peers that she could turn to, which certainly helped--a classmate who had started a company, for example, and a professional investor she'd met at a social function. Beyond that, she was starting from scratch. How did she make it happen?
It worked because Chase was methodical, because she followed the good structural advice of people who'd succeeded before her, and because she intuitively understood the forces of creative destruction. We've found after researching hundreds of these stories that the practical steps logically self-organize into seven components. (In fact, if another pair of co-authors had come up with them, they might have been called the Seven Habits of Highly Effective Entrepreneurs.)
1. Find and fill an important unmet customer need.
2. Plan for profitability.
3. Strive for sustainability.
4. Establish credibility.
5. Gather necessary resources.
6. Lead and manage effectively.
7. Maintain balance and learn to enjoy the ride.
In this excerpt, we'll cover the first step using Zipcar as a case study.
Find and fill an important unmet customer need
If you find yourself lost at any point as you're planning, launching, or running a venture, the solution is always to let the customer be your compass. From the very start with Zipcar, Chase focused on figuring out who her customers were and how her idea for a company could help satisfy their needs--even needs they didn't recognize they had.
"There really was a light bulb that went on in my head when my partner said, 'What do you think of this idea?'" Chase told us. "I, personally, as a user, would want to do it."
That last sentence is important. Chase recognized that she was probably her ideal customer--an urban, cost-conscious consumer who didn't like the hassles of car ownership but who wanted the freedom to travel by automobile when she needed to. That gave her an instinctive sense of what similar customers' real needs might be. She talked about providing customers an easier way to access a car and also giving them freedom--things she craved herself.
Moreover, we can easily identify at least three strategies that Chase used in coming up with the idea for Zipcar that we find over and over in other extraordinary entrepreneur case studies. For example, you might observe that Chase:
- Adapted a successful idea from another market to one she understood: in this case, from Germany to the United States.
- Cross-pollinated between two or more ideas: car sharing, the Internet, and mobile technology, which turned out to be integral to the company's development.
- Identified a niche market that wasn't being served: city dwellers who wanted to save money, cared about the environment, only needed to drive sporadically because they had access to public transportation, or didn't particularly like driving or owning cars.
Customer needs don't have to be overt or practical. Maybe some customers want to seem environmentally conscious just as intently as they want to be environmentally conscious. Chase's company might offer the experience of being a Zipcar member as much as the practical benefits of joining.
Bottom line, Chase didn't need to dream up the entire concept of a car-sharing service. She could look at what was working in Europe, consider how the American market might be similar or different, and think as well about how recently developed technology could improve the business over what was being done elsewhere.
Want to learn more about the proven framework for building brilliant new ventures? Check out the book.