“How hard can it be? I’ve got the idea I just need to sell it.” Defeat. Not an option. Not possible. The idea is brilliant. That could be true but there are ways you can destroy the potential of your idea without even realising it. Here are seven things you can do to increase the chances that your company will be one of the 3% that last more than three years.
- Create your own Intellectual Property (IP) – Keep the research and development within the company rather than outsourcing to another organisation. Ownership of IP will be critical as the company turns a profit since everyone will want a bit of it.
- Balance advice – You, and only you, are the expert for this technology in this market implemented in the way you have decided with the team you have assembled. It is wise to seek advice from as many respected sources as possible but you have to decide whether it applies to you in your situation.
- Focus – Once you have found the golden nugget, focus on purifying it rather than looking at all the other shiny new ideas around you. It will take all your energy to make your product or service profitable so anything less than 100% reduces the chances of success.
- Keep your equity – Don’t give or sell your equity to anyone unless you really have to. Sell anything else but keep your share of the golden nugget. No-one else knows how valuable your company is (since you are the expert) so they’ll never value it as highly as you. Sell too much and you may set up problems for the future – inability to raise funds, disputes about valuations, tax liabilities, etc.
- Listen to customers – Actually I should say “watch what customer do”, not what they say they will do. When someone gives you money it is the best, unencumbered feedback that you can have that your idea is a good one. Unless you’ve failed to deliver you never need to repay the fees, pay interest on them or return x10 in 3 years time.
- Tell people what you want – When you speak to people be clear about what you want to avoid them making erroneous assumptions. If they don’t understand your idea or what you are trying to do it is unlikely to be because they are stupid – more likely they simply don’t understand.
- Set goals – Think about where you want to be and work out what you need to achieve in order to get there. Break the bigger goal (i.e. paying my salary) into smaller goals (i.e. breaking even on variable costs, breaking even on all costs, paying my salary) and measure how you progress. Use SMART to define each goal so that you can feel a sense of achievement as each goal is reached.
These are all elements of the Lean Commercialisation process – a methodology that ensures you prove the value of your concept and idea to all those around you. The aim of Lean Commercialisation is for you to decide whether to preserver, change or abandon the plan before you run out of money and emotional support from your friends and family. As one client said to me today – “if we do this we will not need investors”. Couldn’t have said it better myself![Originally published on the Meteorical Website on 2-Dec-14.]