The dot com days were fun. College kids in their dorm rooms came up with outlandish Web-based technology ideas, wrapped them in a “business proposition” and garnered millions in start-up funds from venture capitalists desperate to get a horse in the Internet IPO gold rush.
Many of the technology ideas were brilliant – use the Internet to gather buying groups to drive down the price of a digital camera. Use the Internet as a worldwide auction tool for used plant equipment.
Most of the dazzling Web-based business concepts failed. Were they too ahead-of-their-time? Not at all. We’re always ready for a great new idea. Did they fail because the companies were often run by kids? Nope. Google was launched as a dorm-room idea by two college kids. Sergey and Larry still run the company. They made Google work environment into a big playroom with exercise balls, free snacks and foosball – yet they’re putting millions on the bottom line.
Most dot com businesses failed because they didn’t fill a clearly defined need. A new product, new technology, new ideas for doing business – these don’t matter unless you can demonstrate a need that is getting met by these products, technology and ideas. The Google boys delivered a more effective, more user-friendly search engine at a time when search engines were starting to get heavy use.
Sergey and Larry did one better by charging for ads stacked up on the right side of their search results. Advertisers had been struggling for a way to reach Internet users. Banner ads were weak and email marketing developed a bad reputation. The search ads caught users just as they started searching for Bermuda Vacations or B.B. King tickets.
Over the years, I’ve listened to a great number of business start-up ideas, as well as new product ideas from existing companies. The most common mistake entrepreneurs make as they develop their ideas is they take an inward view. Instead of exploring what people may need, they focus on what they themselves want to do. It’s a simple trap. A common mistake. And it’s deadly.
The question I ask back when I hear the exciting business idea is, “Who needs it?”
“Well, everyone does,” is the heartbreaking answer. This is usually followed by an impassioned description of the product or idea.
My first publishing idea was a magazine about poker. I loved poker and thought it would be fun putting together a magazine that covered all aspects of the game, from Friday night friendly games to the World Series of Poker in Las Vegas. I went so far as to visit Vegas looking for advertisers. I got caught up in a few games that first night and missed my morning appointments the next day. I quickly realized I didn’t have the moral fortitude to do business in a town like Vegas and came home early looking for a new magazine idea.
The concept of a poker magazine satisfied my interests, but it wasn’t designed to fill a clear need. There are millions of poker players across the country, but would they really read a magazine on the subject? Probably not.
After dusting myself off, I looked at two other magazine ideas. One was a spicy foods publication pitched to me by hot foods author Dave DeWitt, the other was my idea for a retirement guide to the Southwest. Both ideas were based on needs. Hot food lovers were in constant need of new recipes, information on gardening and new pepper products. Meanwhile, people were streaming into the Southwest to retire.
The needs were clear. The next step was to figure out the best way to serve those needs. I thought the chile pepper idea would be best served as a one-shot. I thought the retirement guide could be a magazine. Turned out that the chile subject was worthy of a magazine while the retirement guide – containing mostly static information – was best served as a book. Both products were very successful. Both filled clear needs.