It’s that time of the year: people have started writing their resolutions for 2014. Maybe one of your resolutions is starting a new company. Maybe this has been a dream of yours for a long time, but you never managed to pull the trigger. Maybe the timing wasn’t right, or you weren’t ready.
But guess what? The timing is never right and you’re never ready to start a company. You just have to do it. “But it’s scary,” you say. Hell yeah! I’ve started eight companies and every one of them scared me to death when I started.
But fear just means you’re stepping outside of your comfort zone. You’re doing something new and your body uses fear as a way to remind you that you shouldn’t take your eyes off the ball. Fear is like a traffic sign indicating a slippery road that reminds you that you have to pay extra attention. Fear is necessary.
When you try to avoid fear, it becomes stronger and it’s everywhere. Embrace fear. Look at it in the eyes and thank it for reminding you to stay alert.
You should also consider the alternative: the cost of not doing anything because of fear. Growing up I was terrified of approaching girls at parties. When I told my dad about this, he asked, “What’s the alternative? Never talk to girls in your life? The longer you wait the harder it will get because the monster will keep growing in your mind if you keep feeding it.”
Don’t wait until fear goes away. It never will. In fact, the longer you wait the worse it will get. If there’s something you want to do, do it now.
What’s Your Purple Cow?
I’m not a big fan of Seth Godin, but he wrote a pretty good book called The Purple Cow. The premise of the book is that if you walk by a cow farm and see a cow that is a little taller, or fatter or has one more spot than the rest, you won’t even notice it. But if you see a purple cow, it will get your attention and you’ll tell everyone you know about it. This is because a purple cow is different.
Another book on the same topic is Blue Ocean Strategy, by W. Chan Kim and Renée Mauborgne. I didn’t love this book, either, but its core message is very powerful. It explains that most companies compete in overcrowded markets (red oceans), whereas truly successful companies create their own markets (blue oceans).
The lesson here is that the most important thing you need to do to increase your chances of success is doing something unique instead of modeling your company after other existing companies.
Remember the purple cow: when we see something we don’t expect it gets our attention. And, we talk to people about it. It’s all about breaking the pattern, not fitting in.
I wrote a blog post about this here: Why Being Different Is More Important than Being Better.
Seeking Market Validation
The old way of starting a company was coming up with an idea, opening a business and hoping that customers liked our idea.
The problem with this process is that it’s backwards. You need to make sure people are going to pay for what you have before you start a company. So, how do you do this?
Let’s assume I want build an app that allows restaurants with empty tables to send last-minute deals to people walking by their door who have smartphones. This is what my process would look like:
1. Initial interview: I’d meet with a few restaurant owners and ask them whether having empty tables is a problem for them. If it is, I’d ask him to grade it from 1 to 10 (10 being a really big problem). I’d ask them if they’re currently doing anything to solve the problem. If they aren’t, I’d try to understand if this is because they don’t know of any solutions or if they don’t like any of the existing solutions. I’d try to understand what they like and dislike about each of the existing solutions.
2. First proof of concept: Based on their feedback I’d draw a basic app and show it to them. I’d ask them what they like about it and what they don’t. I’d ask them how I can make it better and what I’m missing. Then I’d ask two of my favorite questions:
– “If this were available today, what would you say are the chances of you subscribing to this service? Please be super honest about it. I’d rather get the truth now than work on this for a year and find out that nobody wants it.”
– “If you had to make a guess, how much would you say this service would cost?” A variation of this is, “If you were competing on ‘The Price Is Right,’ how much would you guess this cost?”
3. Prototype: based on all the feedback I got, I’d develop a prototype. Then I’d meet with the restaurant owners again and ask the same questions: what do you like? What don’t you like? What can be better? What else am I missing?” I’d keep refining my prototype until my future customers tell me “This is awesome! Where can I buy it?” That’s when I know I have a product people want.
4. Kickstarter (optional): If your company will be offering a product (as opposed to a service) to consumers (as opposed to businesses) I’d seriously consider Kickstarter, a crowdfunding platform that allows you to share your idea and ask the community to fund your project. Not only is this another great way to get market validation, but it also allows you to raise money to get your product made.
If you’re interested in learning more about seeking market validation, watch this video from the Stanford Design Thinking course and read The Lean Startup by Eric Ries.
Best of luck with your new company! May 2014 be an awesome year for entrepreneurs!
