One of the biggest mistakes many entrepreneurs make when taking their leap is to assume their customers are going to love their idea. Based on this assumption, they create detailed long-term plans or spend money on the product or marketing before testing it and getting feedback. For example, I made sure my new book, Entrepreneurial Leap, was read by over 50 people before it was published. I wanted to confirm that my target market loved it before I made a big investment.
I urge you to work on a simplified premise. Focus first on providing value, then get feedback quickly and often from the people who will be paying you for the product or service. Don’t ask your brother, friend, parent, or significant other for feedback. They aren’t the ones paying you money. If the people who put down hard cash aren’t raving fans, you have nothing and you’ll have to make a course correction.
When Your Business Model Isn’t Working
When my partner Don and I were 18 months into launching our business, EOS Worldwide, we had a great product, demand, and a small team of implementers, but we weren’t making any money. Our business model wasn’t working. One day, I pored over all the data, feedback, and facts in a Starbucks to come up with a potential solution.
For us, the data were factors such as the way we were charging our license fees, the value we were delivering, market trends, and client feedback. After I reviewed all the information, the right answer clicked, and all the pieces came together. I had a light bulb moment about exactly how we should restructure our economic model. I called my partner and said, “Don, we are about to turn our business model on its ear.”
We made the very difficult changes, which included changing our licensing fees to a fixed monthly fee, creating an open-sourced, abundance-based approach to delivering our content, and raising our standards. This enabled us to generate revenue from non-producing clients that were using our intellectual property, and maximize the personal income of each of the high-producing clients, because their fee was capped. Our business took off and grew 40 percent every year for 10 straight years after the change.
Only by talking to and listening to our clients did I gain the insight to change our offering and save our company.
This discipline of getting customer feedback early and often is one of the eight disciplines to increase your odds of entrepreneurial success when starting your business.
To learn all eight disciplines, read Entrepreneurial Leap.
Take a minute right now to make a list of customers or potential customers (not friends or family) that you could ask for feedback or send a survey.