Do you have an idea for a new product or service? One that gets you so excited you have to turn it into reality? Do you run the numbers and it makes you dizzy or unable to stop giggling?
At Atomic Object, we know how that feels. We were once a startup, and like others we made a few mistakes along the way. This is why we now publish what we know (both successes and failures) and continue to learn from others.
At a recent D-NewTech Meetup, Dan Izzo (Director of Product Development at Fathead, Inc.) gave some excellent advice for anyone trying to start a new company or developing a product outside their current expertise. I was impressed by how practical his advice seemed and can attest to its value based on our own experience. For those not able to watch his entire presentation (starting at about the six minute mark), here’s a quick summary of his major points.
Dan’s Practical Advice
Spend more time heeding the advice of other experienced people than figuring out why it does not apply to you.
2. Passion is overrated.
What matters is excellence in execution — can you deliver on your plan? Excellence is defined as having a good plan and the tenacity to see it through.
Let’s say your plan called for you to do fifty detailed reviews from customers using your product. At the appropriate time, you begin gathering the feedback, and the first five are all bad. Do you stop because it is hard to listen and immediately start tweaking the product, or do you finish gathering the feedback and formulate your response from a larger set?
3. Passion cannot compensate for a bad product idea.
No amount of passion will help sell squirrel meat tacos or reusable toilet seat covers with pictures of your favorite NFL team. Test your ideas to see if they are viable products.
4. Far too much time is spent on the website.
If the website is the storefront to the product, avoid the trap of thinking that because there is not enough traffic, the store needs to be redesigned. This is like thinking that if you don’t have enough dates, you need new clothes. Instead, work on ways to get people to your website. Only after they come will you learn from their interactions if you need to change things.
5. Run where it is working, not where your passion is.
Once you gain traction with customers, go with the functions they are really using instead of extending functions you are passionate about.
6. Dig deeper in the well.
Once you have customers, broaden the price points and offerings within the product category.
7. Money [revenue] is the most important thing you can do.
Pursuing and obtaining buzz, PR, and hype mean nothing if there is no conversion to revenue.
8. Mo’ money, mo’ problems.
Avoid other people’s money like it’s the plague. With it come expectations, oversight, and outside control.
If you have to take money:
- Be smart when you do take it — only when it is the most beneficial.
- Try loans from banks — yes, you have to repay them, but a bank just wants its money back. They have no desire to take over your business if you repay them.
9. A start-up idea is really only a product idea — not a new company idea.
You need advice and help from others regarding sales, marketing, finance, operations, and other resources. You might do better to take your product idea to an existing company.
From my own experience I would add the following:
1. There is no such thing as “If you build it, they will come.”
The movie is called “Field of Dreams” for a reason. No matter how excellent a product is, if you don’t make the right investments in marketing, sales, and support, it will most certainly fail. This is not a mistake isolated to start-ups. I have witnessed this firsthand at companies of all sizes, including a large multinational.
2. Marketing and sales must start before the product is complete.
If you cannot sell it or get a significant down payment before the product is complete, it is a very good indicator the product is not marketable or you have omitted or underfunded a required investment in marketing and sales. It is better to postpone development and get this right than to load up on inventory that will not sell.
Software products are no exception. The software is the inventory. I have seen repeatedly the loading up of millions of dollars in software inventory before beginning any effort on validating, marketing, and sales. It is the same effect of ordering millions of dollars in hard goods and letting them age in the warehouse before figuring out if and how to sell them.