For a long time, entrepreneurs have been asking one question:
What makes a successful small business?
Good Ideas Aren't Enough
According to Albert Savoia, the first Engineering Director at Google, it’s not enough to have a good idea that is executed well. He says that too many prospects when asked would rather invest in the idea of the product than to buy it. Albert reminds us that “It is easier (for prospects) to open their mouth than open their wallets”.
On the Small Business Radio Show, Albert is emphatic that even if you had a good idea and you have a team that is able to execute it exceptionally well, there is no guarantee of success. He has spent ten years researching failure where 80 % to 90% of companies do not succeed. Albert reminds us that the phrase “failure is not an option” only works well in Hollywood movies. (Find the audio, here!)
The Right IT
Albert says that you must have “the right it” to succeed in the market. You need to find out if the idea can be validated before investing in it. He suggests approaching your market research in a different way. Don’t’ get caught up in “thought land and ask the market if I build it, will you buy it?” Instead tell them “if you buy it, I will build it”. This is where crowdsourcing sites like Kickstarter work well. He calls this pretotyping”. In other words, get customers to give a deposit before you develop it. Since it is so hard to come up with something the market will buy, you need to proceed when customers that have “skin in the game”.
This takes courage. A lot of entrepreneurs want to build it in isolation, and they are afraid to ask the customers what they think. Albert explains
“As long as your idea is an abstraction, you can fool yourself that it is a good one.”
This is why people delay going to the market; you are risking rejection and it can be painful. Stop looking for confirmation bias. Albert believes you should approach the market and say “it probably will not work. Can I get evidence that I am wrong?”
Albert says that if there is no market, there is no way anyone can be successful. It is very rare to be able to create a market because most entrepreneurs never have the resources to do this. Alternately, if the market likes your idea, they will put up with a lot even if the product is not perfect.