Why Falling In Love With Your Product Can Be Dangerous To Your Wealth
Why Falling In Love With Your Product Can Be Dangerous To Your Wealth
Twice in the last week I have had requests like this from budding entrepreneurs who are starting businesses with this view in mind. Neither of them have any business ownership experience, but both have a lot of enthusiasm. Each believes they can be successful, but in both cases I am uncertain. Not because I think what they want to sell won’t sell. I just don't know and I wouldn't sink my money or time into either idea at this stage.
Unfortunately I can’t reveal what they want to sell, as that would be unfair, but I can tell you that one is in a branch of management consulting and the other is a software product. But what is more useful, is to share with you why I think what they are doing is risky and how they might go about finding a better way.
While it is possible to make money with a new product that no one has thought of before, I believe their approach is risky because there is no ready demand that you can tap into. Many people look for the unique idea, I would rather sell a product for which I know there is significant demand, even if there are a lot of competitors. There is always room for another competitor especially if you are better than the others..
What is more important than a unique idea, is to make your business unique in ways that are important to your prospects. So for example if you are a roofer, what's the reason people should do business with you and not your competition? For example, it could be in your price, it could be in your process or in your materials or any of a dozen elements of your business.
My first question was "What makes you so sure anyone will buy what you are selling?" One said he just knew it in his gut, the other said she had spoken to friends about it and they just loved the idea. Both of these are dangerous reasons to believe your business idea will make you rich.
The first thing to remember about customers, is that they vote with their cash. Unless you can find someone who will pay you cash for your idea, then it may be nothing more than simply an idea. Gut feeling is a poor substitute for positive proof that someone is willing to give you cash. Friends, although well intentioned, can also be misleading. They want to please and they are seldom your target market, so their advice is at best subjective.
If it is a new idea and no one has what you are selling then how do you know there is a market? This is a common mistake that people make, they fall in love with an idea and expect the market to do the same. I would much rather sell a product for which I know there is a ready demand. If you were selling men's suits, would you rather sell them to people who occasionally wear a suit for work because suits are making a comeback or would you be better off looking for people who wear a different suit every day of the week. In my opinion you would have greater success selling to the guy who has a great suit collection.
The second question was, "What are people buying that shows there is demand for this idea?" Neither had done any real research. Both indicated they had no money for research. In one case the person was prepared to take out a home equity loan to fund the business, the other was hoping to borrow money from friends and family to get started. So if you can’t afford research, how do you find out what people are buying before risking your hard earned cash on a new venture.
There are several free tools you can use to find out what people are looking for and are buying now. The first is to look at what people are searching for on the internet. You can use search term trackers at each of the major search engines to identify what people are looking for. Some of the best ones are Yahoo Buzz Index, MSN Search Insider and Google Zeitgeist. These will give you details on the most popular trends and ideas. Who's hot and who's not.
You can also use key word search software tools, of which there are many, to determine what terms people are searching for. Ones I like, include Overture and Wordtracker.
Another great resource is Amazon.com best seller list. This tells you what books people are buying in what categories. Most people like to read about subjects before buying or getting involved. E-bay is another great source of information on what people are both buying and selling.
Every industry has its trade magazines, they can be a treasure trove of information. Any entrepreneur should subscribe to both the free ones and the paid ones if they intend to keep up with trends.
If you can, it is always a good idea to buy your competitors products or services. This will tell you, both, how they are selling what they sell and give you ideas about how what you offer might be able to improve on their weaknesses.
It doesn't matter which of these you choose ,but before launching a new product or idea, it is a good idea to learn about whether people are actively looking for a solution. If they are then all you have to do is find a way of tapping into this demand.
Why Falling In Love With Your Product Can Be Dangerous To Your Wealth - To learn more about this author, visit Michael Hepworth's Website.
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"I have a great idea, no one is even thinking of it, there are no competitors. I just know I can make a lot of money if I can get it to market! Will you help me market it?"
Twice in the last week I have had requests like this from budding entrepreneurs who are starting businesses with this view in mind. Neither of them have any business ownership experience, but both have a lot of enthusiasm. Each believes they can be successful, but in both cases I am uncertain. Not because I think what they want to sell won’t sell. I just don't know and I wouldn't sink my money or time into either idea at this stage.
Unfortunately I can’t reveal what they want to sell, as that would be unfair, but I can tell you that one is in a branch of management consulting and the other is a software product. But what is more useful, is to share with you why I think what they are doing is risky and how they might go about finding a better way.
While it is possible to make money with a new product that no one has thought of before, I believe their approach is risky because there is no ready demand that you can tap into. Many people look for the unique idea, I would rather sell a product for which I know there is significant demand, even if there are a lot of competitors. There is always room for another competitor especially if you are better than the others..
What is more important than a unique idea, is to make your business unique in ways that are important to your prospects. So for example if you are a roofer, what's the reason people should do business with you and not your competition? For example, it could be in your price, it could be in your process or in your materials or any of a dozen elements of your business.
My first question was "What makes you so sure anyone will buy what you are selling?" One said he just knew it in his gut, the other said she had spoken to friends about it and they just loved the idea. Both of these are dangerous reasons to believe your business idea will make you rich.
The first thing to remember about customers, is that they vote with their cash. Unless you can find someone who will pay you cash for your idea, then it may be nothing more than simply an idea. Gut feeling is a poor substitute for positive proof that someone is willing to give you cash. Friends, although well intentioned, can also be misleading. They want to please and they are seldom your target market, so their advice is at best subjective.
If it is a new idea and no one has what you are selling then how do you know there is a market? This is a common mistake that people make, they fall in love with an idea and expect the market to do the same. I would much rather sell a product for which I know there is a ready demand. If you were selling men's suits, would you rather sell them to people who occasionally wear a suit for work because suits are making a comeback or would you be better off looking for people who wear a different suit every day of the week. In my opinion you would have greater success selling to the guy who has a great suit collection.
The second question was, "What are people buying that shows there is demand for this idea?" Neither had done any real research. Both indicated they had no money for research. In one case the person was prepared to take out a home equity loan to fund the business, the other was hoping to borrow money from friends and family to get started. So if you can’t afford research, how do you find out what people are buying before risking your hard earned cash on a new venture.
There are several free tools you can use to find out what people are looking for and are buying now. The first is to look at what people are searching for on the internet. You can use search term trackers at each of the major search engines to identify what people are looking for. Some of the best ones are Yahoo Buzz Index, MSN Search Insider and Google Zeitgeist. These will give you details on the most popular trends and ideas. Who's hot and who's not.
You can also use key word search software tools, of which there are many, to determine what terms people are searching for. Ones I like, include Overture and Wordtracker.
Another great resource is Amazon.com best seller list. This tells you what books people are buying in what categories. Most people like to read about subjects before buying or getting involved. E-bay is another great source of information on what people are both buying and selling.
Every industry has its trade magazines, they can be a treasure trove of information. Any entrepreneur should subscribe to both the free ones and the paid ones if they intend to keep up with trends.
If you can, it is always a good idea to buy your competitors products or services. This will tell you, both, how they are selling what they sell and give you ideas about how what you offer might be able to improve on their weaknesses.
It doesn't matter which of these you choose ,but before launching a new product or idea, it is a good idea to learn about whether people are actively looking for a solution. If they are then all you have to do is find a way of tapping into this demand.
Why Falling In Love With Your Product Can Be Dangerous To Your Wealth - To learn more about this author, visit Michael Hepworth's Website.
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