Starting a Business: Two Questions I Wish I’d Asked Earlier
Neglect them at your peril
Hi, I’m Hugh.
I am not a millionaire. I am not a high flying executive and I probably wouldn’t call myself an ‘entrepreneur’. But I do alright for myself. I have spent the last decade in professional services and sales. Within that, I’ve founded two companies, one community initiative, and have been involved in a number of start up projects.
More importantly though, I’ve f### up. A lot. Seriously, I’ve spent the last ten years feeling like a complete nit-wit, absolutely out of my depth muddling through projects, not always knowing where I am going.
Notwithstanding, with these experiences have come many significant lessons. Lessons I now use to drive my own success forward.
In this piece, I’d like to share two things which I believe underpin the success of any new venture, business, service, or product. Without them, you are dead in the water.
Early days. Food delivery…
It was a beautiful springtime morning and my buddy and I were having breakfast at our local cafe. He was a chef, and I was working as a consultant.
As a chef, he barely cooked at home, he was always fed at work. For me; despite the fact I enjoyed cooking, a busy social, work, and exercise schedule had eaten up the time I had to do so. As such, I began to meal prep.
Munching on my smashed avocado and sourdough, I lamented that I desired a way to outsource my meal prep. Yet, all that was available at the time was one weight loss service, or terrible frozen meals from the supermarket freezer.
‘Well, why don’t we do that?’ my mate suggested.
‘Do what?’ I asked.
‘Make and sell meals’ he said.
‘Go on…’ he’d piqued my interest.
‘What if we made great quality, premium convenience meals, and sold them to people like you. You know, those who want to eat well, but are just too busy to do so?’
I thought it was a great idea. ‘Okay, I’m in.’
…and with that, Captains of Cookery was born.
Fast forward two months and we were off to the races. We’d sourced a kitchen we could use one night a week, found packaging, built a website, the works. We were taking orders, cooking madly, and delivering them. Our process went like this. Head to the market on the weekend for supplies, cook and package Monday night, run deliveries on Tuesday, and then spend the remainder of the week ensuring people were making orders for the following.
We also teamed up with a local personal training studio. We had a captive market; he had busy clients, we had a product, and they were willing to buy.
Running regular ‘dinners’ at his gym was a hit. His clients would come in for their 45 minute class and we would set up in the corner. During which, they could smell the food cooking. By the end, they were hungry and would gobble it up. Then, we’d give them our spiel and they would sign up for a package. It was a pretty smooth operation.
However, there was just one issue; customer churn. We’d get a new client, they’d come on for a week or two, and then they would drop off. Often not to return our calls or come back to us.
…and then it happened.
‘Have you actually tried to eat your product for a week?’ She said to me.
‘Sorry?’ I asked.
‘Your model is really slick,’ she said. ‘I found you guys super easy. The website was great, ordering a breeze, and delivery was perfect. But your product sucked. I couldn’t eat it. I was so disappointed, everything had pointed to it being great.’
F###.
We’d really missed something here.
Our model was pretty simple; make high quality, premium convenience meals, and deliver them weekly to busy, time poor people. We legitimately solved a problem. People were busy, they didn’t have time to cook, and they didn’t want to eat frozen meals. We had a solution. Fresh, vacuum sealed meals they could have delivered each week at a very reasonable cost. But, and this is a very big but… we just didn’t do it well enough.
This is the first lesson:
Solve a problem for your customer, and solve it well.
We had solved a problem for our customer, but we hadn’t solved it well enough.
I’d actually like to stress this point more because I think this is where most people get stuck in indecision. If you read a lot of the blogs and advice columns available, they speak about having a UXP, or unique selling point. That is, what is it that makes you different to everyone else? Why do you stand out? Why are you exceptional?
All good questions, although I feel many take it to mean they must have invented something completely new and different. Or created a world changing invention.
But really? Do you think your local plumber or chippie is doing something different to all the others? No, but the successful one does a damn good job of ensuring your needs are met in a quality fashion.
Of course, that’s not to say you shouldn’t look for ways to differentiate yourself, but the reality is, even the most ‘generic’ ideas can be executed in such a way that makes them worth paying for. Most of the time, this is simply:
- Providing a product or service people need;
- Making sure it is the best quality possible for the market; and
- Giving the best darn customer service you can.
Follow these and you’re halfway there.
Now I did mention I had two lessons to share so here’s the other half. The second lesson is one we actually did pretty well, albeit unintentionally. We nailed this part and it was the reason we got many orders to start with.
Rather than find single customers, we found a source that could find many customers for the same amount of time. By making our primary lead generator a busy personal training studio we could interact with many more people in one go than making individual calls. What’s more, they were hungry, they were motivated, they were wanting to be seen by their peers as making progress, they were captive.
We had what you might call a pretty solid distribution network.
Therein lies the second lesson:
Your network is everything.
Even an average product can get some traction if it’s got a decent distribution network… and a fantastic product can go gangbusters!
Why do you think ‘influencers’ have become a thing? It’s not because they actually have anything good to say. It’s because companies realise these influencers have a reach and trust with a market they can only dream about.
Similarly, why would a brand take tiny margins just to get into a big box store? It’s because the scale of that company’s network is so large it gives the start up many times more reach than they would otherwise have.
If you’re starting a business, or launching a product you really need to ask yourself this question. If you can’t answer it, then you don’t have a viable product. It’s that simple. The ‘build it and they will come’ mentality is a fairy tale. Build it, and make sure you have a way to sell it!
Still, I don’t want to over complicate things, and you don’t need access to a national network to be successful, but you do need some kind of network, and you do need some kind of plan for how this will work. So, ask yourself the following questions:
- What demographic is my product, service or business being offered to?
- Where does this demographic hang out? Where might they be reached?
- Of these touch points, which one has the greatest return on investment? (For example, how can I reach the most quality leads for the least amount of effort?)
Once you’ve answered these questions, target those locations. Again, that’s not to say that more is better, but rather, look for places where you will get a disproportionate return for the time invested. For instance, if you don’t have a social media following, building one might be important, but until you have that, don’t use it as your primary income source. Rather, find others who are willing to sell your product to their audiences instead.
If that’s not you, and that’s definitely not a bad thing, it might be a professional network that’s worth exploring. Rather than calling bottom of the rung managers, go straight for the MD. Even if they don’t want to meet with you, if you have a solution to a problem they have they will put you in touch with the right person.
Similarly, if you’ve got a product you feel would fit in a department store, instead of going after small time stores, go after the buyers of larger groups to understand what it is they require of their vendors and what you need to do to become one. Even if you don’t get the deal straight up it will provide significant insights into what you’ll need to do over the longer term.
I know this is simple stuff, but I am completely dumbfounded by how it’s so often glossed over. Don’t put the cart before the horse. You can have the company structure, you can have the registrations, you can have all the profit and loss forecasts possible, but if you haven’t answered these two questions you don’t have s###. Seriously, make these a priority, and make them water tight otherwise it’s really just blind luck.
In summary
If you’ve been around a bit, I probably haven’t told you something you didn’t learn the hard way either. But if you’re new to the world of business it might be of help. Don’t let it be as scary as people make it out to be. You don’t need to be world changing, but you do need to answer the following:
- Solve a problem, and solve it well. Ask, what is the product or service people need? Once you have this make sure it is the best quality possible, and give the best darn customer service you can; and
- Find a network to distribute through that gives more than it requires. Ask, who is the demographic I am offering this to, and where can they be reached? Of these, where will I get the greatest return on investment?
If you’ve gotten this far, thank you for taking the time to read. I hope I have provided you with a couple of questions you can apply to your business now, or in the future. Happy reading, Hugh.
