Who cares about your small business?
Dealing primarily with technology companies, many of the entrepreneurs I work with are engineers. Understandably they prioritize product development – engineers love building cool new stuff. Great, but does anyone else even care?
The WHY is critical. Why are you building what you’re building? Building a product is not the same thing as building a small business. Are you building something because it’s a cool project or are you building a business? Are you an inventor or are you an entrepreneur?
Let’s get back to basics….
What exactly is business?
Simply, it’s a: repeatable exchange of value between parties… And that means what?
“Value” is simply a good or service that solves a problem that someone has. It can be as mundane as a metro ticket for a commuter or as existential as an oncology drug for a cancer patient. Our society generally measures this value by what someone (a “party”) is willing to pay (i.e., “exchange”) for the good or service. The exchange must be “repeatable” (i.e., profitable) otherwise the business will not continue.
Now that the basics are clear, do you have a project or a small business? Are you creating value (i.e., solving a real problem that others are willing to pay for)? How do you know?
In a word (or two), Customer Discovery: (or as Ben Horowitz puts it) “Go ask 10 people who are not your mom.”
This is not the place to examine the specifics of customer discovery; there are many many great resources. Both the NSF I-Corp program and Steve Blank provide excellent frameworks. That said, it’s not rocket science – five basic questions:
- What is the market pain?
- Who has the pain?
- How significant is the pain?
- What are current solutions for the pain?
- How effective are current solutions?
Bottom line, studies suggest an astounding 35% of companies fail for lack of market fit (i.e., no one gives a…darn). So, before wasting a whole lot of life chasing the wrong problem, spend the time early on confirming that someone (besides your mom) cares.
Arcadio (Kayo) Ramirez
Tech Team Business Consultant
A seasoned professional, Arcadio Ramirez brings over three decades of experience in working with early-stage technology business to the Michigan SBDC. An attorney by training, he provides invaluable guidance to startup enterprises on a range of crucial matters including financing, commercial operations, corporate governance and intellectual property strategies. His involvement in financial projects has overseen ventures surpassing $30M in magnitude.
Prior to joining the Michigan SBDC Arcadio was engaged in a number of entrepreneurial pursuits, successfully orchestrating the formation, funding, operation and eventual sale of two distinct companies. Notably, one of these ventures, Do It Sports, was among the pioneering transaction-based Internet platforms.
Funded in part through a Cooperative Agreement with the U.S. Small Business Administration. All opinions, conclusions and/or recommendations expressed herein are those of the author and do not necessarily reflect the views of the SBA.