By Bryan Orr
In addition to being a small business owner I’m also a bit of a radio / podcasting nerd. This led to me producing a podcast for a startup accelerator in Orlando named Starter Studio.
Through this process I have been a fly on a wall as the startup founders receive training, coaching and mentorship on how to make an idea into a real business. A lot of it’s just common sense, but some of it is great advice that existing small businesses would be wise to pay heed to.
The Power of the Pitch
You get on an elevator at the same time as another person, you both select the 8th floor, she looks over at you and says “So, what do you do?” Do you have an answer that let’s her know the name of your business, what it does and give her a reason to care in under 1 minute?
Startups are relentlessly trained on honing their elevator pitch and there are two main steps:
#1 – Create a pitch in such a way that it makes an instant connection in the mind of the listener. One I heard recently was “It’s like Oprah’s favorite things but for every major city in the US”. Using a comparison is a quick and easy way to make a connection. Another good way is to identify a problem and set your business up as the solution, “Have you ever needed a plumber and just wanted to know who your friends use without needing to call them all? My business solves that problem”.
#2 – Practice like crazy. Say it in the car when you are driving, sing it out in the shower; if you own a parrot, she should be saying your pitch by heart.
The Value of Knowing Your Customers
Startups need to have some idea of who will be using their product and who will be paying them. If you make toys for toddlers, your user may be 2-5 year old children but your target purchaser is likely 30- to 40-year-old mothers. This means that your product must be built and packaged not only so kids will like it (let’s face it, kids usually like the box better), but so that the mothers will FEEL like their toddlers will like it and that it will be safe, educational, etc
If you fail to understand who is pulling out the credit card, you will miss the mark with your brand message and may make a great product that won’t sell.
How to Validate With Your Customers
Startups have the concept of customer validation beat into their noggins over and over. Whenever you hear someone say “I have a great idea” the rebuttal is often “Have you tested the idea with your customers?” Customer validation can be accomplished in several different ways, but at its essence it requires you to make sure your target customer will buy what you are selling BEFORE you build it or offer it.
You can validate an idea by asking your target customer if they would buy it, but better yet, you can create an environment where the customer actually pulls out their credit card to buy before telling them… ooops it’s not ready yet.
A common way to validate is to build a web landing page with a buy it now button. When they click the button, it says “out of stock” or “temporarily unavailable” but offers the ability for them to sign up for when the product becomes available. You can use this click and sign up data to test an idea before you spend money on it.
Don’t Get Attached
Successful startups need to be lean and nimble. They usually don’t have a lot (if any) money to start with and they don’t have the time to pursue ideas that aren’t working out. As a result, most startups constantly pivot away from one idea or product to another that their target customers like better.
Here’s the rub.
In a successful business you have the ability to pursue bad ideas for much longer. The bigger your team and the more resources at your disposal the worse it can get. You have the ability to “believe it will work” even when the numbers and your customers would tell you otherwise if you would ask them.
To quote Kenny Rogers, good businesses “gotta know when to fold ‘em” and the quicker you can give up on bad ideas and pivot to better ones the more successful you will be.
As a parting shot I would suggest reading “The Lean Startup” by Eric Ries; it goes over all the ways to get started without wasting time and money. Two things I have done plenty of over the years.