Long held wisdom in the retail industry is that items must be displayed on shelves by category. Idea being that we know what thing we are looking when we shop. But what if we’re just browsing? What if we don’t want anything in particular? Bring on Smiggle – stationary retailer who display their range by color.
Eyeball worthy…. I better go check out what they have in purple.
What other conventions need to be busted in your startup category?
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.
I’ve been out selling rentoid to major Australian rental companies and I’ve come to the following conclusion:
In personal selling being liked is more important than our product, price or offer.
Unless they like us, we wont really get the chance to explain the benefits of doing business with us. We might be saying it, telling them all the good reasons why we should be doing business, but they a probably not really listening.
What I’ve been doing is looking for relationship links. Things which we have in common. I know it sounds quite obvious, but when we have something in common we are essentially paying them a subtle compliment. We are saying “Oh, me too, your smart, you have good taste.”
Here’s some of the simple things of been using to find said common ground:
- Geography – Living in the same area, having an office close to theirs. People like dealing with locals. Geagraphy matters.
- Sport – Footy finals, if I see an interest in football or see some physical evidence then I get straight into it.( a bit blokey this one, but it works a treat)
- Industry Love – if we show you really care about the industry they are making their living from it’s a good thing. It means we are supporting what puts bread on their table. They like us if our objective is the help the industry we are both working in grow.
There is physical evidence all around us in sales calls from which we can find a link to develop a micro yet ‘instant relationship’. We just need to be perceptive while we are out there. It isn’t about being deceptive either. We’ve got to find a common interest. Something we actually believe. If we fake it they’ll smell it and we’ll blow the sale.
…… for entrepreneurs is this:
We must put ourselves in as many Yes / No positions as possible every day.
What’s a Yes / No position?
It’s a call to action.
It’s asking for something we need to get to the next step.
It’s asking for an order
It’s asking them to buy
It’s making an awkward phone call
It’s facing fear and rejection
It’s taking rejection straight into the ‘next Yes / No propostion
It’s putting momentum above all things.
The number of position proposals is directly proportional to our success – and our success rate as a percentage increases as the volume of propositions does.
That is all.
It’s no secret I own and run www.rentoid.com – but here’s a story you don’t know. The story of how I got it off the ground and got people to use the website.
Rentoid had a classic chicken and egg problem when it first got launched. People wont list items until we have willing customers waiting to rent their stuff. Conversely, people couldn’t rent things until people willing to rent their items put them up for rent. It’s a bit like asking two people who don’t know each other to fall in love. To solve this problem I decided to ‘Invent Demand’. This is how I did it.
I went out and got myself a copy of the Harvey Norman and all the major department store catalogs. Scan through and them and picked off what items I thought would be suitable to rent. For the purposes of rentoid that meant items that were ‘hot‘ in market (their placement in the catalogue was proof enough of that), items which had a purchase value of over at least $200, and had a low likelyhood of damage. I then proceeded to gather photos of the specific items off Google images and listed each of them on rentoid. The rental prices I placed at 5% of item value for a week, and 10% of item value for a month. The bond I made 50% of the cost. I made sure I listed items from varying categories. I did it in 3 suburbs across Melbourne (North, West & East). The listings also said ‘as new, never used’ – how true. It also assisted with our SEO because people do ‘item & location’ specific searches.
When people rented the items, I went out and bought them, first hunting for the lowest price on line. Then rented it to the new rentoid member in good faith and gave them an exceptional user experience. After the rental I sold the item on ebay for around about 80% of the retail price. I pretty much re-couped my costs doing this. Some items kept renting out often enough for me to keep them including my Nintendo Wii and Guitar Hero which have paid themselves off more than 3 times over. The cool thing is the experience I gave people and the live demonstration it gave me to the system I built. It really helped me iron out many of the bugs in the system when it comes to usability and transacting on-line.
You may think this is slightly deceptive, but it isn’t, simply because the rentoid member got what they wanted from the site and the process was completely transparent. When they’d come over the pick up the item up for rent I’d tell them I own http://www.rentoid.com. I’d ask questions like how they found the site and what they think. In fact, they loved the idea and were stoked to transact with the founding entrepreneur.
It was a great process to not only to invent demand, but also gain some brand evangalists and supporters. And yes, I still list a lot of items on rentoid – espeically if it’s new and cool and we don’t have it on the site yet.
As entrepreneurs, we need not be afraid of how we can build demand and momentum with our start up. We must do this because action creates reaction and often people simply liking our idea isn’t enough. Instead we must show leadership and belief in our own product and embrace it and use it as our own ‘in house evangelist’. If we don’t believe, how can we expect them to?
Quite often I’ll be looking for a business solution. A solution to a problem. But most times I really don’t know what I am looking for until I find it. But when I see, hear it, or touch it, I know it’s exactly what I need. If I waited to start until I knew what I wanted, I think rarely would I find a solution at all.
I know it sounds crazy, but I really think we should get started before we know what we are looking for.
‘An office is a very dangerous place to watch the world from”
This is really a key for anyone no matter what our life is. Decisions from the desk are rarely as insightful as decisions made from the filed. For all the reasons we are aware of such as message dilution , the grape vine et al.
I have been witnessing this first hand as I have invested the past few weeks out on the road visiting my business customers for www.rentoid.com. Put simply I’ve learnt more in the past few weeks than I have in the past few months. Incredible insights as deep and wide as web usability to asset management.
I’ll I can say to startups is this. Get out there and press the flesh and make sure you are not ‘Office Blind’.
As entrepreneurs the natural temptation is on inventing new markets. Creating dramatic change and going for the trophy ideas. This stuff is incredibly difficult, which is why when we do it well the financial rewards can be significant. The interesting thing is that by being optimists with big ideas we really develop some amazing skills just trying. Regardless of our success or lack of.
Creating markets is much harder than getting a share of an existing market. There’s so much more to do to make it work. Things like building an entirely new supply chain, accessing unique raw materials, developing distributions channels and educating consumers of the benefits of this alternative.
Imagine for a moment that we focused our skills on something simple. Something for which there is already existing demand. A market with which there has been very little innovation for a long period of time. Imagine for example…. selling potatoes.
Selling potatoes would not be as difficult as inventing entirely new markets. Sure there would be incumbents in the game, maybe some very powerful players. But the one thing we can be sure of, is that people do business with people they like. Every industry has room for new players. Every business has some suppliers which they are not happy with. Imagine bringing some new world thinking into the potato trade. Integrating some Cluetrain ideas into this business, and really winning over some customers by doing things just a little differently. There is a new business waiting to happen in boring old market.
pic by Peter VanAllen
I often think that we ignore old areas because they are sexy enough, when all we need do is bring some new ideas in to sexy it up. And there is nothing more sexy than financial success in start up land. In addition our probability of success is certainly larger in an existing market than developing a new one, even if the financial gain is smaller. Maybe we can garner some success Selling potatoes first, before we try our trophy idea. It’s easy to be better than it is to be new.
Maybe your next business should be selling potatoes.