What Will You Succeed At?

I was recently given a copy of Stick to Drawing Comics, Monkey Brain! by Scott Adams, the cartoonist who behind Dilbert. In his introduction, Scott discusses why he chose to write a book which has nothing to do with business, at least not in general. He had no experience in the field, and yet he wrote the book anyhow.

As it turns out, when he started drawing Dilbert, he had no experience with cartoons either. Before he landed his first paid speaking gig (which paid him $5,000 for an hour of his time), he had no experience with public speaking beyond a couple generic courses. He recounts many of his successes, and makes the statement:

To put all of this in context, I remind you again that I fail miserably about ten times for every one success. (That’s an accurate estimate. I’ve literally kept score.) The failures always involved activities for which I was completely qualified. Ironically, I couldn’t even “keep my day job.” On the other hand, my successes have all been in areas in which I had no obviously relevant background or experience whatsoever.

This statement is incredibly interesting for a variety of reasons.

First, however, this cannot be taken to mean that if you were to try something for which you have no qualifications that it means you will succeed. In that, Scott is an exception, though I do believe his recipe for success can be duplicated. While Scott did apply himself to a variety of endeavors with no qualifications, he also did not attempt the impossible, merely the improbable.

What Scott is saying here is that success and qualification in a particular area have little to do with one another. While those two factors may not be mutually exclusive, they are also commonly not found to coincide with one another. Simply because one is qualified does not mean that success is probable, and the inverse of that is also true.

The pattern in what Scott has done is that in each case he has set himself against probability, but had a motivation to succeed despite the odds. Winning contests with some element of skill involved is not impossible, even if there are millions of other contestants. It’s unlikely, not probable, but still possible. One can succeed and win.

While I’m sure Scott has not included every endeavor of his in his introduction to his book, he has described a sufficient number to indicate that while he was not particularly qualified to excel at any one of his successes, he was not unqualified either. That is, he may not have been considered an expert in the field, but he would not have been described as incompetent in that area.

Success is not a function of what you’ve been trained to do. You can succeed at something for which you have no background, provided, that is, that you are prepared to apply yourself. The path may be difficult, but it’s not impossible. Some things you may find yourself struggling with, but in other areas, where the “professionals” would have stopped, you may persevere and succeed.

Perhaps that’s actually a limitation in an ability to succeed. The more documented a background you have in an area, the less likely you may be to push the boundaries of what can be done. By not being qualified (and recognizing that fact), you prepare yourself for the long, hard road. If you’ve found a way to motivate yourself, to convince yourself that you can succeed, then you may well endure along that path until you do reach your eventual success.

Customer and Market Research

A recent question posted on a site I frequent asked about the use of vaporware as a means of measuring customer interest in a product prior to actually building the product. If you are unfamiliar with the concept of vaporware, the definition from Wikipedia reads:

Vaporware describes products not released on the date announced by their developer, or announced months or years before their release… Vaporware first implied intentional fraud when it was applied to the Ovation office suite in 1983; the suite’s demonstration was well-received by the press, but was later revealed to have never existed.

The current usage, though, is more along the lines of creating a website promoting a product, and seeing how many customers attempt to purchase it. This tactic can be used to determine how much interest there is in the product, and whether or not the price is suitable.

The risk, of course, is that once a tactic like this is used, any trust between the company and the potential customer is lost. The customer has been led to believe that they were purchasing a product, only to find out that the product does not exist. While this is not fraud, since the customers are not actually paying for anything, it isn’t honest.

However, the problem remains as to how to go about measuring consumer interest in a product that has not yet been created.

One approach, perhaps a bit naive, is to go out and find some customers who are willing to pay for your product. Ask them for prices they would be willing to pay, and use that as the basis for your business model and income projections. The problem, however, is that until a customer is asked to put out money for a product, any statement they make regarding pricing has to be taken with a grain of salt. This is, in fact, the basis for the statement “Put your money where your mouth is”.

Customer surveys in which information about the potential product is provided, and general statements regarding pricing have similar problems. While this can help narrow down the range, it does not validate that a particular price will work, for the same reason as asking customers to name a price won’t work unless they are prepared to back that statement with cold hard cash.

The approach that does work, though, is to find some actual customers who will state that not only will they purchased your product at a specified price, but will actually lay out at least some of the money up-front. Such validation indicates that these users are prepared to believe in you and what you can build, and that they see a specific value in what you’re building.

The risk, of course, is that if the product does not get built, you have to return the money. Be careful using this approach to ensure that quantifiable milestones have been defined for the product development, and that it is clear how the product can be assessed objectively to determine whether or not it has met the goals defined during the research stage.

Who Gives This Type of Advice?

In a conversation with a client, we discussed a piece of advice he had received from a venture capitalist in regard to his business. He had been seeking an investment of a few million dollars, most of which would be spent on development and hardware infrastructure for the business. The business already had clients lined up to use the pair of products as soon as it became available, thereby crossing the first hurdle of getting the first paying customer.

With this validation under their belt, he hoped that the VC he was meeting with would see the promise. However, he left the meeting empty-handed, though the VC parted significant amounts of advice on how he might proceed. The reason he gave for declining the investment, though, was something along the lines of:

It’s not big enough for me to get involved. I think your business will do well, and will be profitable in the near future. However, you have a long road in front of you to reach the market, and the competition is quite strong. It’s not for me.

There are actually two types of investors who would make such a comment, and trying to differentiate between the two is complex at best, impossible at worst.

The first investor knows the industry, the competition, the existing products, and understands the business idea you’re proposing. He’s looked at how it compares to the current offerings, and has made an educated guess as to how the target market will respond. He’s factored in changes in the nature of the market itself – in this case, it’s age-specific, so understanding the generation that will be targeted to adopt the product is a key requirement to being able to project the business’ performance.

Once all this has been taken into consideration, this investor feels that the adoption rate will not be high, the product will not redefine the market as a whole, and there will be stiff competition. It’s unlikely that the business will do much beyond turn into “yet another” player in the specified market.

The second investor is likewise well-educated in the industry, but is also looking at it from the perspective of his own generation. That is, he sees how his generation would react to such a product, and projects that thought onto the current market. With limited adoption by that generation, a generalization of how it might be adopted by other markets is created, resulting in the same conclusion.

The difference between the two types of investors is that the first has made a properly balanced argument for why the business will not be the next shining star. The second, however, has merely projected an attitude against a new business, whose market he does not really understand. When the advice comes from the second investor, it should be taken dubiously, since he clearly does not get it.

The problem, however, is how to tell the difference between the two. For that, you need to know the people involved, past investments they’ve made, and then make a judgement call based on that.

Question: Favorite Place to Get Work Done

Today’s post is really short, because it’s actually a question, not an answer.

I was forwarded a talk by Jason Fried about Why Work Doesn’t Happen in the Office, in which he discusses where people like to go when they need to get some work done. Interestingly, the answers he got were pretty much anything but the office.

The question is the same as Jason’s question:

Where do you go when you need to get some work done?

It’s a Good Idea, Now What?

Often in my line of work, I have conversations with people who have thought of an idea for a product or service, and are looking to turn it into a business. The first barrier they need to cross, namely, having a GOOD idea, has been crossed via validation from potential customers of the product or service. The question they have, then, is what to do next.

The first thing that needs to be realized is that getting validation that the idea is a good one has ramifications for how to proceed. Some potential clients can help by working with you to refine the service or product. Other times, you have to go off on your own and figure it out.

One of the biggest mistakes someone new to the business world can do is to go out and try to raise capital. The reason is quite simple – you don’t know yet if you actually need any. Sure, it would be nice to have a budget of millions that you can spend on fancy offices and a huge staff, but do you NEED it?

The first approach, therefore, should be to determine how much of the product or service can be developed with what you have – namely, yourself (and any partners you may be working with). Commonly known as bootstrapping, you should be trying to build out with the minimum amount of resources possible.

If that’s not possible, see what you can get by reaching out to your network. People don’t expect to work for free, but you may be able to barter something of value (and note that shares in your business currently have little value at all) for work.

Don’t forget that you need to be thinking about multiple aspects to your business. You need more than just an idea, product or service – you need to be able to sell it. If there are legal ramifications to that, make sure you work them out up front. You may need a marketing plan, you might need to work out pricing schemes. If you know someone who’s been in business, talk to them – you should try to get a mentor if you can, if only to steer you clear of issues that you might not need to face.

However, start your approach with an eye toward frugality. That doesn’t mean trying to pay less than the value of a given item, but rather determining if you need the item in the first place. There’s a gray area between good enough and perfect, and usually, perfect isn’t worth the effort over good enough (though of course there are many exceptions to this).

Starting a Business

A recent course which was titled “Starting a Business” and ended being better named “Writing a Business Plan” got me thinking about what kind of advice I would give to someone just starting out. I thought back to a few businesses which started out as a single person, and have grown, and realized that there are two kinds of people who start businesses, and the advice to each is different.

First Time in Business

If you are in business for the very first time, then what you need to do is go out and find some customers. No fancy business plan, no expensive incorporation, just a phone number or email address at which you can be reached. Reach out to your network, announce that you’re in business (explain what type of business you’re looking for), and ask people to send you leads.

What you are trying to do is get some momentum, and the simplest way to do that in the early days of a business is to find one person who will pay for what it is you have to offer.

One friend started his business with $500 in his pocket – he unpacked the coffee machine, pulled out a list of phone numbers for every person he knew, and started calling each to let them know he was in business. A few years later, he has several people working for him on a variety of projects, and has some idea about where he’s taking his business. But the start was informal – just a bunch of phone calls.

What it comes down to is networking to find one client. Once you have that one client, you can worry about determining where your business should go – taking legal steps to protect yourself, setting yourself up to be as tax friendly as possible, etc. The first step for someone in business for the first time is always networking.

Been There Before

If you are starting your second or later business, then the steps are different. Finding your first customer isn’t as important as figuring out what this business will do. You have to reflect on your previous business to determine, from a business perspective, how you can do better. In that case, a formal business plan might be wise – you may have the time to do this, and can afford to spend valuable time researching your target market, the industry, raising capital, etc.

The steps aren’t as clear here either – what was the end of your previous business that pushed you to start a new business? Would you call your previous venture a success? How would you apply the lessons learned there to your next venture?

These questions, and other related questions, need to be answered in order to determine your best approach to starting anew.

Summary

If it’s your first time in business, then don’t over-think it – just go out and find someone who will pay you to do the kind of work you want to be doing. If it’s not your first time, then reflect on your previous endeavors and figure out how to apply the lessons learned there to your next venture.

Bad Marketing Pitch Raises Scam Alert

I use Twitter as a source of interesting articles, sites, and other content. Unusual for Twitter readers, I actually read an incredibly high percentage of posts in my feed (currently about 80% of what’s posted is actually read by me), and that’s without using lists or any service other than the website itself. When I saw the post below, I decided to check it out:

Google mistake Reported by Jill ChristopherI clicked the link, and found myself looking at a marketing pitch for a course on how to get other businesses to pay you to get a listing on Google. After watching for a few minutes, my scam radar starting beeping. One of the images just seemed wrong:

Google Local MapThe map was accompanied with an explanation that the items marked with letters were businesses who had claimed their listings, while those without letters (just a red dot) had not. Money could be made by listing a business for someone who doesn’t know how to do it, and then get paid a maintenance fee to keep up the listing.

This didn’t seem correct, and further investigation showed that the dots are actually for businesses who have ALREADY claimed their listings. The reason some are marked with letters is simply because they’re on the current page of Google listings. Not only that, but there is no maintenance fees to keep up the listing – once you’re listed, you can forget about it. A quick check online directed me to another page, which had the details of the scam, and so I passed it back to Jill in case she didn’t realize she had just posted a scam to her feed (the other posts from her I had read didn’t seem to be scams, after all):

Response to Jill Christopher about the scamPerhaps unsurprisingly, there was no response from Jill regarding her dubious post.

What is interesting, though, is that what triggered the scam alert was an actual lie – that is, what the map represented. Anyone even somewhat informed on Google would be aware that their statement was simply wrong, and therefore everything else claimed in the pitch (which is quite long and includes pop-ups trying to get you to buy a $97 course) is likely erroneous too. While marketing pitches are not always known for their accuracy, they do try to avoid flat-out lying.

Marketing is meant to draw people in, to lure them with the promise of something big, whether income, or a change in a formerly routine task. However, they should not be lying to people, because once the sale goes through, the truth will come out, and you’ll have some upset customers. (While some businesses thrive on negative publicity, it usually is not a recommended course of action.)

So, if you’re planning on creating a marketing pitch, make sure it’s accurate to reality. If it isn’t, someone will find out, and they may then decide to send some negative publicity your way.

Unique Value Proposition Turns into a Business

I was working on a business development plan for someone, and we discussed her business, what she envisioned being able to do for clients, and various approaches she could take to find new clients. This came, after some discussion, to the concept of unique value proposition – that is, what would set her business apart from her competitors. We discussed a few options, such as offering some merchandise to clients who sign up for certain packages, or pairing her services with those of someone offering a complementary service.

These are common spins on how to set your business apart from the competition, but we wanted to take this a step further. Eventually, we landed on offering a custom service that would be given to her clients at no charge, for as long as they were her clients. In the short-term, this might have reduced the amount she could charge each client, but it would also ensure that clients would stay with her for many years.

Working in IT, I went to determine how complicated it would be to build the web application we envisioned. I came back a day later and realized that the application itself, what we had considered to be a unique value proposition for one business, could actually fill a void in the market. That is, many of her competitors and non-competitors (i.e. people offering the same service to a different geographic market) would love such a service, and would likely pay to use it.

The assessment continued to the point where a price could be placed on developing the application, as well as sales models for it (usage and membership fees), as well as marketing angles (it’s a B2C service, so market it to other businesses). The whole business could actually be run in conjunction with her existing business, taking little effort to set up new users on the system (most of this would be automated), but would require significant effort upfront.

What ended up happening is that a business was created for the sole purpose of giving a unique value proposition to ONE client. However, anyone who wanted to use the business, even competitors, could do so – but for a price. That is, we found a way to get the competition to pay to be the competition.

When looking at a business, and its approach to attracting customers, sometimes it will be discovered that something that was added to the business to make it more appealing is actually part of another business. When that’s the case, it might be smart to spin that part of the business off into its own entity, so that you can charge your competitors for using what you give away to your clients.