What we’re going to talk about today is The Unstoppable Start-up. These are the five things that you should be focusing on. There’s a lot of things you can focus on in a start-up, but what are the main things? These are the core things that matter most.
I remember starting companies and I was worried about uniforms and how the office would look and all these peripheral things and none of it moved the needle. I also spent a lot of money on things that were just completely unnecessary. I work with startups all the time helping them launch and there are five things we focus on.
Proof of Demand
What am I talking about? The Field of Dreams concept does not work in the business world. You can’t simply build it and they just come. You build it and then they decide if they want to come.
My advice is to decide if they want what you’re building, then build it in a really small way. Test it a little bit, and then build it for real. Does the marketplace want what you’re going to be offering, what proof do you have that your idea can be a winner? Within this proof of demand, how do you stand out? Why are they going to want what you have over someone else’s product or service? You need to have proof that the marketplace is going to want what you’re offering. There are 10 people offering the exact same thing, then what’s your differentiation? How are you going to differentiate yourself from others? What’s your unique selling proposition?
Proof of Concept
Can you systematically deliver what you’re selling? Can you repeatedly provide your product or service at the expectation level of your customer? An example of this is the Big Baller brand. Alonzo Ball and his kids were going to create a set of shoes, and they pre-sold all these shoes at a crazy price, like over $400 for a pair of shoes. They had proof of demand, but they had no proof of concept. They couldn’t get these shoes made, or they never really tried because they never filled an order.
So you gotta have proof of concept. Can you systematically deliver what it is your selling?
Now, what is it really costing you to provide it? How can you increase these margins? Are these margins acceptable?
I had a business that I wanted to start. I had proof of demand, I had proof of concept, but in my area, the margin wasn’t big enough to appeal to me. I like high margin businesses. I like high margin service companies specifically, in that we offer a service that’s at the top 20% tier, where the upper-income client wants it. They really want a high-level person providing it. So that’s important.
So the profit margin has to be appealing. We’re trying to create an unstoppable start-up, and if I could give you just five things to focus on.
How are you going to systematically attract customers? You don’t start a business that you don’t know how you’re going to attract customers. Add on to that, you have no confidence because you haven’t done anything to even know if it’s going to work. That’s why you do micro-testing. You test the messaging, the vehicle that you’re using, the medium, etc. Does this work, does this attract my target customer?
Proof of Sales
How are you selling people and have you tried to sell anybody yet?
Sell it at the county fair! Sell it somewhere! Sell it online on a one-page website. There are so many ways to sell something, but test it at a micro-level so you know that you have a system for converting these leads. It doesn’t matter whether it’s a retail store, a service company, an online business, etc. We still have to sell.
Businesses go out of business for one reason, 99% of the time. They stopped making enough sales to stay in business. That’s it. JC Penny’s, Sears, Blockbuster, we can go all the way down the line. Why are they no longer here? There wasn’t enough of an interest in what they were selling and sales decline. Boom, they’re out of business.
That’s why we went over the Unstoppable Startup today.