Get Some Social Proof

Posted in: Blog, Startup, Uncategorized by jrobinson on April 26, 2011 | No Comments

So that idea is still nagging you? Feeling ready to start a business? Before you risk your time, security & savings, there are some things to do first.

Either many entrepreneurs are cocky, or cocky people become entrepreneurs. Sure, a degree of self-assurance is required to be successful. Where things go awry is when you become so caught up in an idea, just knowing it’s going to work, that you don’t stop to find or seek out some social proof. An untested idea is a shot in the dark. But knowing that people really need and will use your product is incredibly validating & the first step to a successful venture.

I strongly encourage everyone that has an idea to pursue it. Jump right in & see what happens. What’s important is that pursuing it the right way can protect you from spending your savings or cold-quitting your job before you’ve validated the idea. What you think you want to do may not be what customers need. By trying it out, getting feedback & applying it, you may end up pivoting and morphing into something else (whether related or unrelated), and that “something else” could be wildly profitable.

To illustrate, a recent New York Times article, “The Dark Side of Opening a Store“, shows the downfall of blind assurance, albeit from a brick-and-mortar perspective. Here is an excerpt:

“In 2004, Ms. Schmidt moved from New York to Colorado Springs, Colo., to join her future husband. She became fascinated with local history and culture, but she was disappointed when she had trouble finding cowboy boots in colors other than brown and black. She started to contemplate opening a store where she would sell a greater variety of boots along with other high-end women’s western wear…

During the 2006 holiday season, she introduced Girl of the Golden West as a pushcart in a Colorado Springs mall. Sales were dismal, but Ms. Schmidt attributed them to a mismatch between her high-end merchandise and the lower-income customers the mall served. So, she moved to temporary space in a more upscale mall. And when permanent space became available she seized it, paying monthly rent of about $2,500 plus a percentage of the store’s still anemic sales. Then she began approaching banks and learned the hard truth that they generally don’t lend to start-ups. Nor was the Small Business Administration, which guarantees loans made by banks, the source of financing she had imagined. She even sought venture capital.

Despite these setbacks, Ms. Schmidt, who describes herself as an optimist, was undeterred. She had $500,000 from the sale of her Manhattan apartment and decided to sink all of it into the store. About $300,000 of that went toward renovating the new space at the mall. Ms. Schmidt, who had five employees at most times, still wasn’t covering her rent…

In a final effort to breathe life into the business, Ms. Schmidt left the mall, relocating in a pedestrian-friendly strip in Manitou Springs, a historic mountain community. She no longer had to hand over a percentage of sales to a mall or staff the store during off hours. But it didn’t help enough, and she finally decided to close last summer.

She lost her entire investment, owes back taxes on the store and has filed for bankruptcy. “My credit rating is ruined, and if I weren’t married, I’d be homeless,” she said.”

How can you avoid this? Test your idea before going “all-in”.

If you’re a brick-and-mortar venture:

Survey your friends and friends of friends. Study the competition, both locally & regionally. Distribute some flyers with your phone # or email address on them. Track how many calls or emails you get & what people want to know. Most importantly, think of ways to minimize your initial investment. For example, if you want to start a furniture store, don’t sign a three-year lease in Birmingham’s SoHo or another top-dollar commercial district right away. Rent a booth at a local antique marketplace or attend regional shows first. Start building a loyal customer base – people who love what you do & are excited about it. Leverage these people to help you spread the word. Before long, if you get a real sense of other people’s excitement and passion – these are your future customers.

If you’re a tech startup:

Don’t sink $20,000+ into a website or mobile application before you’ve done your homework. In fact, you should be able to validate your idea, test market trends, and get some initial traction for as little as $300 + with some basic technical know-how. First, choose & buy your domain. Then, create a landing page. Reveal what your site or product does (or will do), that it’s in private beta testing, and offer an email signup field. Use WordPress if you’re not a savvy coder. Next, add Google analytics then sign up for a Google AdWords account. Create a handful of ads, choose 5-10 applicable keywords per ad, then monitor impressions & click conversions over the next few weeks. Spread the word on Twitter & Facebook to your own friends. Track site hits & email signups, then start a conversation with your subscribers. Don’t just send out “newsletters” – survey their opinions, such as which features they want, how they’d use it, if they’ll be willing to pay, etc. This should be your starting point & will either validate or invalidate your idea.

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This post was contributed by Jonathan Robinson, a young entrepreneur living and working in Birmingham. Jonathan’s companies include FreeTextbooks.com (founded 2009) and theClubhouseLeader.com (founded 2010).

So you want to start a business?

Posted in: Business Development, Startup by jrobinson on April 14, 2011 | No Comments

Everyone has ideas. Ideas are sexy, fun to talk about and fun to dream about. It’s pretty intoxicating to consider that this little idea you have could change your market, provide a much-needed service, or secure a big paycheck. But, executing and building a company around your idea is a whole new animal.

When I started my first company three years ago, I was admittedly a little lost. I’d had no business classes in college and hadn’t yet had a post-graduation job. But, I knew my idea would deliver a valuable service, so I started down this road. There have been times when I couldn’t wait to move forward and keep building, but other times when I’ve just wanted to quit. Maybe for an hour or maybe for a day, but when the workdays drag on and the planning keeps you up at night, you want some relief. That relief comes in a big sale, a new contract, or a growing customer base. There are incredible highs and deep lows, but focusing and striving for those “winning” moments can push you right through.

That isn’t meant to discourage anyone from entrepreneurship. Sure, there are concerns & difficulties, but creating a product or service that people grow to rely on is one of the most rewarding feelings I’ve experienced. Customer by customer and dollar by dollar, building a business from nothing is something few care to take on, but those that succeed have complete control over not only their bottom line, but the kind of life they choose to pursue. That continues to be one of my biggest motivators and is the driving force behind many aspiring entrepreneurs.

I want to be very clear – it isn’t easy. Too many people get fed up with their current job and see the appeal in “working for yourself”, “setting your own hours”, or “having more free time”. There’s certainly a misconception of self-employment that goes something like: sleep in, work in my pajamas, do what I want (when I want), and somehow along the way, build a profitable business. If all you want to do is sell baseball cards on eBay, that might actually work.

Once you have an idea and start to move forward, you need all the self-confidence you can muster. You’ve got to be so confident (almost arrogantly so) that what you’re pursuing creates value for potential customers and that you can deliver.

If you’ve got an idea, want to move forward, and aren’t sure where to start, read Michael Gerber’s The E-Myth Revisited: Why Most Small Businesses Don’t Work and What to Do About It. Then, keep reading. Listen to podcasts. Subscribe to Inc. magazine. Find a mentor (or two). Follow the right people on Twitter. Talk about your idea to everyone that will listen. Get critical feedback from people you trust. Deconstruct your idea. Consider how you’ll build a business around it. Think through every aspect — creating a website, opening a store, keeping the books, finding customers, keeping customers, building value, studying the competition, developing a marketing plan… The list goes on forever.

I am not an expert on entrepreneurship or telling you how to cash in on your big idea. What I do have is first-hand experience of taking an idea and building a business around it. Sure, it’s a non-stop struggle to create something worthwhile, sustainable, and profitable. Entrepreneurship is a long, hard pursuit that affects every aspect and waking moment of your life. If you can (and want to) take that head-on, then let’s go. It’s an extraordinary ride.

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This post was contributed by Jonathan Robinson, a young entrepreneur living and working in Birmingham. Jonathan’s companies include FreeTextbooks.com (founded 2009) and theClubhouseLeader.com (founded 2010).

Starting a business – my overwhelming, inspiring, terrifying, amazing journey

Posted in: Blog, Startup by Brian Cauble on July 10, 2009 | 84 Comments

Just so you know, I am a bit exhausted at the moment.  I should probably be working (or sleeping) instead of writing this post.  But I want to tell you about my recent journey.

I have started a company, two in fact.  One of my companies is a mobile phone software development company called Appsolute Genius.  The other company is a non-profit called “Birmingham Entrepreneur”.  Sound familiar.   Why did I do it?  Because I caught the bug: the “I am passionate about these things and this is what I want to do with my life” bug.

Birmingham Entrepreneur started as a way for me to get more involved in the entrepreneur community in Birmingham and to keep me focused on entrepreneurship.  I never expected to love it so much.  I love doing it.  To most people it sounds like work.  I take time to meet with entrepreneurs, post blogs, post links and send tweets about entrepreneurship, look for sponsors, look for meeting locations, look for speakers, try to market the group.  It is actually a lot of work.  Work that I currently don’t get paid to do.  But it isn’t just work to me.  It is a passion and a mission.  I have a mission to make Birmingham Entrepreneur special.  I have a vision where Birmingham Entrepreneur can make a difference in this city and really help it grow.  It may sound crazy, but I believe it is doable and I believe I am the person to do it.

Appsolute Genius is my mobile phone software company.  Now I am a geek.  It took me a long time to come to grips with that statement, but I am.  I love technology and I love how technology improves our lives (when done right).  For example, Social media allows me to meet more people than ever and to keep in touch with friends and family I wouldn’t otherwise keep in touch with.  Mobile software allows me to run my life more efficiently and makes my life more fun everyday.  I love seeing how mobile technology is changing our lives.  I understand technology on a human (emotional) level, and I love it.

So now that you know what I am doing with my life, let me tell you what it has been like.  So many words come to mind: scary, exhilarating, lonely, fun, amazing, overwhelming, inspiring.  Many days I feel all of these emotions.  You will hear so many people tell you to be passionate about your business.  They are 100% correct.  Why?  Because it is extremely difficult and you will probably give up if you don’t love it and believe in it.  You have to be willing to do whatever it takes.  I am so tired as I write this, and I have doubts from time to time.  However, I know that this is the life I want.  And I know that whatever it takes, I will make it happen.