Want To Start A Company? Stop Doing Research
Preparation is overrated. At least when it comes to starting a company.
Overrated does not mean unnecessary. The most critical first step in starting any venture is intimately understanding your customers, and the topic of effective customer research is covered at length by experts and practitioners like Steve Blank, Eric Ries and Hiten Shah.
But if you find yourself in an endless cycle of researching the market, the company formation process, the fundraising process and everything in between, you’re risking never getting started at all.
The more you realize you don’t know, and the more perceived work it will take to be ready to start a company, the easier it becomes to talk yourself out of taking action.
And action is the only real way to learn how to build that business you’ve been fantasizing about starting.
This time last year I was advising a company that was going through an accelerator program. The woman who led the company was a solo founder who was trying to get a new gym concept off the ground. Week after week we would meet and I would hear about the new entrepreneurship course she was taking, or a new expert she was meeting with to learn about finance, marketing – you name it.
With every new expert meeting, she would inevitably face a half a dozen new things that she had to learn about the industry, and would find out about new potential obstacles that she didn’t know she would have to face. With every week that passed she would lose confidence in her ability to start this business. Our meetings were starting to turn into therapy sessions more than advisory sessions.
After about 2 months of this, we were scheduled to meet again. This time I could tell the tone of the meeting was different. The founder proceeded to tell me that she had decided to give up on this idea because it was too difficult to pull off.
We’ll never know whether she would have been successful with the gym concept because it never got off the ground. She was lucky enough to find another idea to pursue immediately after this one, which she could bring to market faster, and perhaps she’ll come back to the gym concept some other time. But this could have been avoided.
You at least owe it to yourself to validate or invalidate if your concept has potential in the market before you give up on it.
It’s one thing to realize that you don’t want to work on something anymore because you don’t care about it. But if you feel a deep desire for some business to exist in the world, focus on taking the type of action that moves the concept forward, and closer to reality, rather than letting it stagnate for no good reason.
When my brother and I decided that we wanted to start a podcast, we didn’t even know how to begin producing one. We did a baseline of research to figure out the best practices of launching a show, and then we made a decision to publish the first 3 episodes on iTunes as fast as we could.
That decision turned out to be critical in the launch of the show.
Now on its 27th episode, we could not have planned that we would be booking a public company CEO as a guest within 6 months of the show’s launch, but had we spent weeks researching the perfect way to launch a podcast, we may have never started.
A few weeks ago, I met a founder who started a beverage business with his brother 3 years ago. They had no experience in the consumer packaged goods or beverage industry whatsoever, yet they brought a cold brew coffee drink to market within a month of conception, and were now getting ready to release their second product, a cascara tea.
When I asked the founder how he was able to launch a product so quickly, he told me that they started talking to customers almost immediately. In fact, the first thing they did was make samples at home for small businesses in their hometown, and they closed 26 accounts on their first day of selling door to door. That gave them the necessary confidence to get the first several cases produced in a commercial kitchen and delivered to their first accounts. Within 2 months they were on the shelf of their local Whole Foods.
Why were they able to move so quickly when others take years to bring an idea to fruition?
The simple answer is that instead of focusing on all of the things they didn’t know, and coming up with an elaborate business plan for how to go to market, they made a minimally viable product and went directly to the market to test it. This way they were not only able to refine their recipe, but get immediate distribution once their product was good enough.
There’s no better way to learn how to sell than to start selling. Once you have a little bit of momentum in the form of early sales, it becomes a lot easier to continue executing because the demand for your product is what keeps you going. On the flip side, if there’s no demand for what you’re selling, then at least you found out before wasting time on a business plan that would have never worked.
There are so many things going against you when you’re starting a business. Research and preparation are only useful when you immediately act on what you learn. So do yourself a favor and stop getting in your own way by coming up with more reasons for why something might not work. Get to market as quickly as you can, and let your customers help you decide whether the business is worth pursuing or not.