We’ve all heard the trope ‘60% of businesses fail’. But, of course, your idea is different. The rules don’t apply to your prodigy.
You’re the proud new parent, starry-eyed, hearing only praise even as friends around you grimace.
This isn’t the way it should go.
Taking the first steps to start a business means a serious reality check.
Instead of cooing over your newborn business with the gooey look of a proud parent, you must remove the rose-coloured glasses and start treating your business baby like a Spartan.
Ideas are a dime a dozen
Your first idea is often not your best. Neither is your second.
Wait until you think you have a great one, then, before you jump, test your idea.
Friends and family are easiest to access, but come with a major pitfall: they’ll be nice to your baby. Nice is bad. If you want real feedback from friends, don’t tell them it’s your idea. You’ll hear the truth that people will otherwise be afraid to tell you.
Random people are even better. It’s easy and cheap to find out whether you have the inkling of a market, especially for products.
When we started Future Neutral, we tested the premise with an ‘upsell’ mechanic on a friend’s website, and I made a logo up in Paint.
Within seven days, we got a more than 10% conversion rate, and could see that people are willing to buy carbon offset at checkout.
It was this data that helped us press forward.
Don’t have someone to help set up a test? No problem. Anyone can set up a quick ‘launch’ web page, pay $200 in traffic, and see what random people do.
This gives you valuable insight without breaking the bank, and if people just hit your page and then leave… well, maybe your product isn’t so great after all.
I know what you’re thinking: ‘But someone will steal my super cool idea.’ So? Competition is good. It validates your idea and the market.
You should be able to handle criticism and still hold onto your vision.
But, if you hear three different people tell you the same thing, you need to listen. These are tell-tale signs that something is wrong and you need to fix it.
At the beginning of Future Neutral, people looked at our homepage and had no idea what we did.
In response, we revamped our entire website and rewrote everything so that our mission was even more clear and concise.
The baby might be fine, but is the environment?
So you’ve passed the first test. You’re ready to launch your business, you’ve committed the time and the money.
The problem is, your (lovely) baby was born in the middle of a pandemic.
This is exactly what happened to us.
My co-founder quit his job and we started Future Neutral in December 2019. Climate change was top of the zeitgeist on the back of the worst bushfires the nation had ever experienced, and then, suddenly, COVID-19 was the single most important short-term goal.
‘A rising tide lifts all boats’ is a common business phrase, referring to the fact that even crappy businesses can do well if the market is right.
Are you in a rising tide? Is your industry or sector growing?
It’s not to say you can’t start a business in a declining market, but it means the deck is stacked against you, heavily.
Be true to yourself when it comes to the numbers. You need to do careful analysis to see if there is enough market demand to truly warrant your business.
There is no such thing as ‘the perfect time’. Is now a ‘good enough’ time? If not, shelve the idea, and come back to it later (if at all).
If you have the mettle to stand up to your doubts, go for it.
If you don’t, stop the idea now, because it only gets harder after you start.
Prepare to be a super-parent
How are finance, marketing, operations, sales, product development, HR and web development going?
Once a business gets going, you’ll be pulled in every direction, with a list of competing priorities. But you need to set your goals and stick to ‘high leverage’ tasks.
Ultimately though, the buck stops with you, which means late nights, hard work, and figuring out stuff you didn’t think you could do.
Try and get support and surround yourself with people with the expertise you lack.
As with any new baby, the highs are high but the lows can be devastatingly low. The answer is consistency. If you show up and do the work, day in, day out, you’ll ultimately be rewarded in the long run.
Seth Godin once said: “What would you work on, if you knew it would fail?”
If you know you’d persevere even with the knowledge that it would fail, imagine how much more confident you’ll be when you succeed.
Get ready to call your own baby ‘ugly’ and then watch it grow.