I love working with entrepreneurs. Not all business coaches do, but I am one of them that does. Entrepreneurs have great energy and they are passionate about their dreams. They have big ideas. The world is their oyster. They see nothing but the possibilities. But many entrepreneurs enter with the wrong mindset and are missing a great deal of important information. In particular, I have identified 7 obvious questions entrepreneurs fail to ask. And if they don’t know the answer, or have guessed wrong, it can doom their enterprise.
7 Obvious Questions Entrepreneurs Fail to Ask
1. Does anyone care?
This is the most obvious one that is so often overlooked. Entrepreneurs are by nature very creative people. They have come up with a new idea. Then they fall in love with their idea. But what they fail to understand is that often their idea is not important to their (potential) customer.
I once worked with an entrepreneur that had a cool idea for a new way of processing information. His method was unique. But in a world filled with countless tools for doing this. He could never get over the “who cares” barrier. He attempted patenting it, but was unsuccessful. I advised them on a variety of ways to differentiate themselves, but he could never get buyers interested in his concept. Question #5 (next week) also came into play. But you’ll have to wait and read next week’s post to learn about that.
2. Will people pay for this?
Sometimes you have a great idea. But no one will pay for it. How can that be? This is the second, and possibly most important of the questions entrepreneurs fail to ask.
There are a few possible reasons. One is that there are “free” options that people will go to first. I have this challenge as both a business coach and trainer. Often, the “material” that I bring to the table can be obtained for free from various sources. Whether that is any number of blogs (like this one) that gives you great information at no charge. Or, one of the many service providers (like SCORE) that offer services for free. So how do I combat this? I have to make my offering unique and better than the free offerings that are available. If potential clients see me as nothing more than a disseminator of information, then I’ve lost the battle before we ever get to the sale.
3. What is the real market size? (overestimating the opportunity)
Many times I see entrepreneurs who have completely overestimated the potential market. If you are selling scissors made for left-handers, then you have to realize that you have limited your market size to 10% of the market. Now, my wife (a southpaw herself) doesn’t like me to point this out, but it’s a fact.
If you are going after a market that has a limitation to it, then you have to look at two options, expand the market, or redefine the market.
By expanding the market, I mean offering products to more than just 10%. Or, alternatively, don’t just make scissors, but make other left-handed devices as well.
By redefining the market, I mean to change people’s perspective so that they will become part of your market. I was once working with a manufacturer of health foods. He used a lot of accurate terminology in his product names (things like “tofu” and such). He asked why someone like me wasn’t interested. I told him that it didn’t sound like the food I would like, so I’m afraid to even try it. The truth is, his food is great. He needed to redefine the market by expanding people’s minds about the food he offered. (What is a better name for “tofu”?)
4. Can others duplicate it? (especially customers themselves)
Often time an entrepreneur simply has come up with a better way of doing something (e.g. automating or streamlining a process). This new approach is innovative and solves some unique problem. But their success may be tempered if their idea can easily be duplicated. Competitors are always looking at what new ideas are entering the market. If a new idea looks successful, they will either (1) copy it, (2) better it, or (3) buy it. So an entrepreneur who is bringing a product or service into an existing market must think about how competition will counteract his idea.
Also, customers may look at whether they can duplicate the solution themselves. I see this a lot with software products. When I worked in a Fortune 500 IT team, software companies would often bring us new concepts. If it was something of interest to us, we would first determine whether we could do it with what we had instead of buying something new.
Of course, there are several ways to protect your concept:
- Patenting – if you are producing a product that truly is unique, then you should look into patenting the invention. This is difficult with software products and services.
- Legal protection (non-competes, non-disclosures, etc.). I am not a lawyer and so I am not giving legal advice here. Often these agreements with employees, partners and customers are not worth the paper they are written on. But it doesn’t hurt to use them as a first line of defense for protecting your innovations.
- Corner the market, make it hard to enter. Another approach is to do SO WELL that no one can really compete with you. I often advise my clients that they should strive to be so good that no one would ever try to steal their business or customers.
Have you asked yourself these questions?
I have given you the first four questions entrepreneurs fail to ask. Take time this week to ponder these. Some of these are very hard to ask yourself. Especially question #1. If you cannot be honest with yourself about these questions, you should find someone who will be.
If you are an entrepreneur and haven’t asked yourself these questions, you should seek outside advice. Hire a business coach to help you through this phase. Better yet, hire me. Or, at the least, attend my eGrowth program, the Entrepreneur Growth Program.