6 Make-or-Break Steps to Go From Big Idea to Successful Business
This week, I had the chance to speak with a friend who's created a truly unique design in a product category that has relied on the same basic approach for quite a while now. He's got a prototype, has a patent pending and is working to figure out how to manufacture it. The countless hours of research he has spent on the category, technology and market are impressive, however it's clear that he's completely starting from scratch in terms of actually taking what he's done so far and turning it into a real business.
I've found this most often to be the norm, rather than the exception, with startups. It's human nature to get immediately excited about a great new idea, but the simple belief that, "If you build it, they will come," is not the way any new idea becomes successful.
A few key steps are absolutely critical to any successful launch:
1. Have a business plan.
Yes, you heard it here first. OK, you actually heard it basically everywhere. Writing a business plan isn't fun, but it's one of the single most important things you must do to stop dreaming and start making your business idea a reality. A well thought out business plan forces you to consider all aspects of business operations that will be necessary for success, including production, distribution and marketing. Without one, no investor will even consider providing you with the capital you need to become successful--in fact, you'll have no real way of even knowing just how much capital you're going to need. There are tons of examples you can tap into online, or for more guidance invest in a software package like Business Plan Pro.
2. Execution often trumps idea.
Think about how many amazing ideas die on the vine. Great ideas are only great if they're well executed. This has far less to do with the actual product than with the more mundane elements of finance, marketing, sales, production, etc. Failure to consider all of these critical elements upfront means that success is unlikely. Which brings us back to why investors first want to see that business plan.
3. Define your promise.
In ten words or less, describe why someone would want your product. When put to this test, most entrepreneurs immediately dive into the detailed minutiae of product design and functionality. While that's very important to the person who designed the product, it's not at all what I meant when I posed the question. What I'm looking for is that reason for being, the passionate gut reaction a consumer experiences the moment they first engage with the product. What problem have you solved? What emotion have you generated? What promise are you making about all your current and future offerings? Yes, the details are very important--but most people simply don't care about them like you do. They want to get excited about the potential your product has, not bored by all the details..
4. Distribution matters... A LOT.
I've had some start-ups succeed and some that didn't. My first startup had it all: Great snacks that were both tasty and healthy, low-cost production and a great brand that everybody resonated with. What we lacked was any real experience or knowledge of the retail grocery environment. While we were able to achieve substantial retail penetration, the major retailers literally ate us alive. Slotting fees, marketing fees, promotional fees, return fees, broker fees, distributor fees--at times we were almost spending more than the price of the product just to put it on the shelf. Needless to say, this was not a model for long-term success. Understanding where to sell your product, and how to effectively enter those channels is one of the single most important aspects of any business. And if you are in a business where the majority of sales are in retail and your plan is to just start selling online, think again. It's hard enough to succeed as a start-up without the burden of believing that the wonder of mere presence will alter consumer behavior forever.
5. Package things simply.
It amazes me how many times someone shares an idea simply by flipping through a hodgepodge of different documents, websites and materials. I'm always left with the impression that this person really hasn't fully thought through what they are sharing. Being buttoned up is important, especially for a start-up. Put together an easy-to-review presentation that walks through the basics. Keep it top-line, and be prepared to walk anyone through it in 10 minutes or less. I said anyone--because you should go in assuming your audience knows little about your product or category.
6. Leverage your network.
You have friends and family. You've worked with people who respect you. Many of them can offer expertise, networks and occasionally, investment potential. Often, they would love to help--that is, if only you would ask. Not all will, of course. Often, the ones who help the most are those you originally expected the least from. Don't be afraid to engage the people you know, and be prepared not just to share your idea but to express the ways they can add value.