Picking a Market
A lot of entrepreneurs start their own business because they have what they think is the next great million dollar idea. They spend countless hours and all of their money developing their idea with the thought, “If I build it, the customers will come.”
That is the worst way to go about starting a business. To illustrate the point, let me ask you, what is the most important factor when going fishing: is it the tackle, the bait or the location? Well you know that no matter how fancy your tackle, how fresh and appealing your bait, if you are dropping a line where there is no fish, you will go home empty handed. The very most important point in fishing is going where the fish are.
The same is true in business. Your product or service should be one that people already want. Now I will be the first to tell you that your product or service needs some unique angle. But there should be an existing market for your product or service. You simply need to make a better widget, or provide a service that has some unique value proposition.
There are two factors that contribute to our falling into this trap. First, most people were employees first. Employees, for the most part, get paid for time on the job. If they do the work the employer has asked them to do, they get paid. The employee that quits and starts his own business often carries this old mindset into his new business. He (or she) subconsciously expects if they do the work, they will get paid.
The second problem is that most entrepreneurs incorrectly think that what they like everyone will like. You need to make a very special effort to set aside your own biases and prejudices. If you are going to be successful in business, you need to learn to think like your potential customer’s think. This is extremely difficult for most entrepreneurs.
If you are planning to start a business, you must listen to the market. Learn to ask people what they want – but do not seek validation from your close friends. They will not be honest. They have a tendency to tell you what they think you want to hear. Learn to test everything. And let your decisions be data driven.
Do not confuse your ideas with the real world. Do not become attached to any particular outcome. If you are emotionally attached to a particular outcome, you cannot make a wise decision. Learn to listen to the market. Test everything and let the results drive your decisions.
If you fish where there are plenty of fish, even with lousy tackle and mediocre bait, you will still catch enough to sustain you while you learn enough to make the adjustments that will ensure the success of your business.
If you are a smart fisherman, you go fishing where the fish are. If you are a wise businessperson, you will develop your business around what the customers want.