I’ve been thinking alot about the differences of various businesses I’ve been involved with. I invested the formative years of my business life working in consumers goods companies. Classic fast moving consumer goods companies that thrived through industrial revolution and then boomed during the TV industrial complex.
I’ve since invested most of my time in service based internet businesses, startups and advertising. They both have relative advantages and disadvantages that I only ever realised once I had time to digest the dynamics in each of them. The most interesting observation I’ve made is the difference when the office and the factory are the same thing. This occurs in service / web based business. In consumer goods the office and factory tend to be separated.
The key advantage that the consumer goods scenario has is that the office is not linked to output. It creates time for thinking. The immediate concerns of what needs to ship today are somewhat removed. The urgent, doesn’t get in the way of the important. Yet, the challenge here is that we can become out of touch with how things work.
The key disadvantage of the service scenario (office is the factory), is we don’t have as much time to think and consider. There is always something that needs to be created, done or fixed. Over time our mental flexibility declines as we get absorbed in shipping what we make and meeting deadlines. Yes, we know what is happening, but we get too close to it. We lose vision and creativity via also ‘being’ the production process.
The important thing for startups and marketers alike is to know which environment we are operating in, and to work real hard on the area of disadvantage.
I often wonder whether or not advertising on work cars is a good idea. Especially given it is in many ways one of the negative sides of business – distribution, busy road, pullution. It might remind consumers that the brand is part of a large corporate monolith. You get the picture. But I’m starting to think this is different for startups.
Firstly, we’re only likely to have one or two vehicles out on the road. Secondly, it’s a good way to create brand awareness cheaply. A colleague of mine who has started a beverage company Jarritos Mexican soda has done just this. At a cost of $2000, he’s invented $50,000 worth of advertising. Which is what branded cars cost via media agencies. See below.
The key element to doing this successfully is making sure the vehicle and advertising matches the brand. For example, an environmentally friendly business should really only partake in such branding if it’s prepared to invest in hybrid / electric vehicles.
Would you advertise your startup on your car? In addition is there an opportunity to start a business branding civilian cars and in doing so helping the general population pay for their transport?
Quick advice. #1 Tip for selling a vision ?
So I thought it was worth sharing the answer here because the answer had to be delivered in less than 140 characters.
It’s about their vision, not yours. You need to demonstrate what’s in it for them. Not you. Let them own it. Perceived co creation.
In business, demand is invariably more important than supply. If demand doesn’t exist, supply is irrelevant. If demand exists, supply will eventuate.
I happened upon a quote from one of the greatest inventors / entrepreneurs in history Thomas Edison. Despite the simplicity of the idea, it’s very profound.
“I find out what the world needs, and then I proceed to invent it.”
This is some pretty good advice for any entrepreneur. It’s better to make what you can sell, than try to sell what you can make.
This is the second of my crowd sourced blog entry ideas as suggested by Aj Kulatunga. Aj wanted some basic suggestions on how to develop an idea to start a business.
First of all I start by saying, the idea is not nearly as important as people think it is. The problem with a new idea is that we need to go the effort of education people, building a new supply chain and inventing demand. Sometimes ‘selling potatoes’ is a better option. That said, I’ve been asked to give inspiration for idea generation – so here are the Sammartino methods.
The law of the opposite:
Equal and opposite version of existing successful products / markets / services.
Not from here:
Bringing stuff from elsewhere to this market and positioning it as such. Usually imported or licensed version.
The more intense version of something. More power, ingredients, recognition. The Nth degree. For example red Bull is really an Nth version of coca cola. More intense energy hit. Hummer is also an Nth 4 wheel drive / SUV.
Local versions of overseas success. Quickly adapting successful ideas for overseas markets. Although these days you have to be very quick. That said, it is easier to find them out via websites such as springwise.
The unexpected version:
Eg Extreme Sour Lollies
Nothing new, existing idea, existing industry, with large existing demand. But must have low barriers to entry. But do it better, try harder, with amazing customer service levels.
Gourmet / Natural version
Has happened a lot in the grocery / supermarket categories. Entrepreneurs have taken advantage in categories like Juice and yogurt.
Take a tiny part of a successful and existing business and just do a micro niche of it. Twitter is this for Facebook. Just taking the status update part.
Danger of trophy Ideas – This link
Seriously, your friends and family don’t care about your startup. They don’t have to. Sure they might pretend to care, but mostly they’ll wish you luck and get on with their lives.
Of all of my family members, only one has ever listed an item for rent on my website rentoid.com At first this surprised me. I thought that having a very broad target audience, they’d like it and get involved. They didn’t. So why we feel the need to seed our new startup with family and friends is beyond me. It’s really a waste of time. If they don’t like what we do, we’ll be offended. If they don’t buy what we sell, we’ll be offended. The feedback is less like to be honest than from a stranger. And most of all we are not going to get rich selling to our family and friends.
Startup blog advice is this: Go direct to your real market. Family and friends rarely, if ever, hold they key to startup success. So why delay the start of said success by launching to them?
In nature, with every second something lives for, it’s probability of continued life increases exponentially.
The lessons for startups is simple, do the stuff that keeps you alive longest. And the most important thing we can do for our startup is keep our costs low. Low cost operations gives us the advantage of time. And time is the most important asset when it comes to working out our business model. Not capital, not technology, not employees, not research. Just time.