I try to be open and receptive to every new idea for a product or service that’s presented to me because it’s part of my job to be a good listener and to evaluate new business ideas and because you can learn something valuable from almost every pitch – sometimes it’s exactly what you should also be thinking about (and maybe already doing) in the context of your own business – and sometimes it’s something that you wouldn’t consider doing in a month of Sundays. I learned long ago that you can have the very best of intentions and still have a really bad idea.
But, in any case, it’s generally a good investment of the modest amount of time it takes to pay attention and be polite unless the people pitching haven’t done their homework, don’t appreciate or want to hear about the magnitude or difficulty of what they’re setting out to do, or just aren’t really prepared to effectively present and defend their ideas. No one these days has time to waste listening to half-baked businesses or fever dreams. Everyone’s entitled to their own ideas (good or bad), but not to their own reality. And another hard-learned lesson is that there is virtually no consistent correlation between great talkers and great ideas. Ideas are driven by enthusiasm, but success depends on execution – you can’t win a race with your mouth.
And lately, I feel like we’re having another unfortunate run of what I call “slice it and dice it” disease. The premise of all these pitches is that you can take any good idea for a product, service or network (typically someone else’s idea who is already hitting it out of the park) and shrink that business down to a narrower target population or a specific niche or a certain kind of consumer and instantly turn the process of serving that smaller segment into a big business as well. Messaging apps just for Moms. Social networks strictly for softball players. Reward programs restricted to redheads. You name it.
I do often say these days that - because of the Internet - niches are no longer necessarily small, but that doesn’t mean that they’re any easier to address and conquer or that – in fact – while the barriers to entry are deceptively low, the barriers to success aren’t even higher than ever. You still need a compelling reason for people to use your product or service and to change their behaviors to do so. Even relatively new habits are hard to break. And while it’s true that one size never fits all, it doesn’t follow that there’s an infinite demand for things in every possible size, shape or variety. Different isn’t always better.
And frankly as pervasive as the idea is that we can monetize everything that any of us has in excess (I call this “the emerging surplus economy”), I don’t see the whole world being Uber-ized any time soon. We’ll see hundreds of variations on this theme, but very few valuable businesses will survive after the novelty wears off and the difficulties of delivering these types of programs at scale becomes increasingly apparent. Uber everything is pretty much a pipe dream.
But if you insist on slicing the salami and heading down this long and winding road and if you’re intent on building the next luxury linen outlet just for little people or something even more exotic and esoteric, ask yourself these three questions first:
(1) Who Really Needs Another Whatever?
We’ve all got more stuff than we need. More friends and followers than we could ever keep up with. More apps and programs on our devices than we can even remember. And more devices than we know what to do with. And you want to add your pony to the pile? I don’t think so. I’m afraid that most of the boats have sailed, most of the folks have decided what they’re interested in, where they spend their time, and what they pay attention to, and it’s gonna be really hard to explain to them why they need another anything.
And your offering isn’t even another anything exactly – it’s sort of a particular piece of what they already have a bunch of in several variations. It’s like offering someone a new email address. Most people would rather poke their eyes out than have to start checking another mailbox and that’s even assuming that you could convince them that the effort was worth the time. What exactly are you offering that isn’t redundant and duplicative – even if it’s slightly more targeted and focused? Most folks have figured out the basic filters that help cut down on the crap they’re seeing every day and all the big guys are already adding built-in (and often default) ad blockers to try to delay the inevitable and ongoing migration from websites and email to messaging services which is accelerating every day among the mobile millions and putting a critical damper on online web ad sales. It’s really hard to see how you’ll even get your message out there to these targets who are doing everything in their power to shut down the volume and turn off the spigot. The most likely outcome is that you’ll be left in the dust at the starting gate or trampled by the crowd because you don’t have a clear and concise answer to why anyone needs what you’re selling.
(2) Who Could Do the Same Thing in a New York Minute?
If it’s a remotely good idea, there are hundreds of businesses much bigger and more established than you with millions of existing users who are exactly the people/prospects you want to pitch. All of these competitors (and potentially very fast followers) are searching every day for more products, services and solutions to offer their users since they are under tremendous pressure to constantly engage and retain them. They have no new acquisition costs. They have already built the necessary pipeline and technology. And they are just waiting to steal your idea if it’s any good and serve it up to their customers. Nothing you have is gonna stop them, but if you stay small enough, maybe they won’t notice you. And the thought that they will swoop in and buy your baby business instead of ripping you off and building their own is another bad bet which happens roughly once in a blue moon.
(3) Who Will Pay Anything for It?
Your friends and family may think your idea is terrific and you might easily recruit a talented team to take on the challenge with you since everyone wants to be an entrepreneur today, but remember that there’s an infinite demand for the unavailable and you won’t know a thing for certain until you have something to sell that lots of people want to buy, be part of, or otherwise support. Nothing happens without customers and sales. We buy things because we think they are worth more to us than we are paying for them and – more importantly – when we are convinced that they deliver something we don’t now have, but definitely want. Businesses need to be built first on revenues from real people and then they can expand their model to incorporate advertising and other income streams. But the dream of building a large population first (and basically for nothing) so it can be marketed and sold to advertisers who will pay to access these folks is simply a nightmare today. It’s an old story (and an even older movie) – it’s not clear that it ever worked over the long haul for anyone (Twitter seems to still be looking for an answer while their user base continues to plummet) - and I can assure you that you will also run out of money and starve long before your attempt to crack the code goes anywhere.
Nirvana is that moment of insight and stillness of mind – of perfect clarity - when all the passions, all the delusions and all the frenzy have been driven away. When you have to look in the mirror and face the facts. And when you do you’ll see that not every niche leads to nirvana.
PS: “You Get What You Work for, Not What You Wish for”
