ENTREPRENEURS SUCCEED BY AVOIDING RISK-TAKING
Many collaborative entrepreneurs wonder if there is a silver bullet that would help them get their company to work right now. And there is a truth that every serial entrepreneur knows. There is a way to “succeed” systematically, and there is a way to “struggle” systematically.
It’s a mindset difference. Those who struggle always build a product before making sure people will buy it. Those who succeed, make sure others really want and buy their new products before they exist.
By selling their product or service before it’s ready, when time comes to build, they know that they’ll create a product or service that people really want. To see what I mean, these are three examples of this mindset applied to entrepreneurial celebrities in their beginnings:
Before creating an airline, Richard Branson got his flight to Puerto Rico cancelled which left him and a few others stranded on an island. He figured he had a problem and went to find a solution. He picked up the phone to find out how much a charter would cost. But instead of paying a whole charter on his own, he divided the price of the charter among the number of passengers and charged them $39 to rebook their seats. He offered the other passengers to pay and they were glad someone took care of it. This pre-sale Branson’s first experience in the airline industry, and the one who led him to create Virgin Airlines.
Before building a company, Steve Jobs also started selling blue boxes that allowed users to get free phone services illegally. First it was a hobby invention by his friend Wozniak. When he realized people were ready to pay for it, he knew he was in business. Then someone tried to rob him at gunpoint (a story for another tab) and he decided to try selling computers, which ended up being another pretty good business for him.
Before Starting Paypal, Tesla and Space X, Elon Musk learned how to run a business and pay his rent by hosting epic night-parties. He first rented a house and threw parties that attracted thousands of college students. Once he knew how to make money with his projects and was comfortable with a business, he either sold it or moved on to something harder and more complex.
In 2005 before turning Arduino into a company, the Arduino founders created micro-controllers to teach their students programming and prototyping with electronics. When they realized people were asking in droves how to buy it, this is when they realized it was time to turn it into a business.
Can you see what’s going on here? They all looked for people interested in what they were offering before they had anything to sell or made any significant investment. They avoided any risk. If you are a budding entrepreneur, you might think that you can skip this step. You know in your gut that everybody wants your idea. But from my experience, as we mentioned in the previous post, this is an excuse that helps us hide from the fear of being rejected or being stolen by others.
OpenROV started with a “simple” underwater robot for submarine exploration and have improved it over time to a much more polished and refined Underwater drone. Open Source Ecology started with a Brick Press to create building materials. Once they validated people needed it, they went on to develop the rest of the Global Village Construction Set to create a new open and ecological civilization from nothing. So don’t worry if your idea doesn’t have a 20 year plan to change the world and a huge community behind it.
First things first. You have found a few ideas. Congrats. Not everyone takes the time to lay them down. Now, if you want to turn them into reality, you must find if people want it enough to pay for your idea. This is hard and challenging. People might not be interested at first. You’ll have to tweak your idea or accept that it’s not a priority to others around you. You might even have to leave your idea and pick another one you had. But you will eventually start to see that your idea can help and have an actual impact on others. And this will be incredibly exciting and rewarding.
The community and the 20 year plan will eventually come after that, if this is what you really want you think is necessary. Don’t worry if you think your ideas aren’t good enough or might be too hard to sell. The real value of this exercise lies in learning how to quickly validate any idea you have. When you know how to validate any business idea, you’ll never wonder anymore “should I have tried this?”.
You may successfully validate your idea or not. If not, your main goal here is to keep moving forward with other ideas and repeating the process without spending a lot of money or time on a website, landing page, app or whatever. You really don’t need it. Just go after the low-hanging fruit and go manual without building a website or hiring anyone until forced to do otherwise.
If you already have a business you want to try, let’s stick to this one. If you don’t have any idea, go back to this post and come up with your own list of ideas. The point is to get started. If you don’t know how much to charge for it, think how much value it brings to the person you want to help, and divide it by 3x or 10x. For example, if you are selling a course, or a product that you know will make the other person $1000, you can easily sell it for anything between $100 or $300.
If you still don’t know how much your product or service is worth, go with $10. You’ll see what are the reactions from people before and after you deliver your services or product. Their feedback will guide you into increasing or decreasing the price. But always make sure that your price is always above your costs to build and deliver the product.