Most people start businesses by just starting-up. But that’s just like running a bath without first securing the plug. In practice, what it means is that most new business owners have an idea and after much deliberation or a sudden trigger point like losing their job, they convince themselves to turn their idea into a business and rush head long in. The smarter ones will ask friends and family for their thoughts and ideas. But here’s the thing … think how many times you’ve had the courage to tell someone you care about what you really think – .i.e. what a dumb business idea that is – for fear of hurting their feelings. Even those with secure relationships will sugar-coat a response, offering suggestions or improvements. But that’s often read as a green(ish) light by someone who is already welded to their business idea. So it serves little purpose other than to widen the hole in the bath tub and hasten out the water.
Once upon a time there was a Teddy Bear …..
When I first launched Bear Factory (now known as Build-A-Bear) in Ireland, a friend convinced me it was a great idea. So I took my idea and pitched it to the owner of Brown Thomas in Dublin who politely laughed me all the way down four flights of stairs and out of his prestigious shop. It wasn’t that my idea was bad or even half bad – it went on to have annual sales of £3m within a year – but I hadn’t yet researched or tested my value proposition properly before diving in. Well, I had done or so I thought. I’d asked at least a dozen people in my MBA class, my friends, my partner and told just about anyone I met what I was about to do. And everyone said, wow, that sounds like a brilliant idea … go for it. All except, one person!
After my swift exit from Brown Thomas and feeling thoroughly deflated, I bought a sandwich and sat on a bench in St Stephen’s Green Park in the centre of Dublin. By my side on the bench was my bear in its box, with its head poking out (if you are familiar with the concept). Sure enough, soon along came a little girl with her mum and the little girl approached my teddy bear and thought it was “the business”, asked where could she get one, and exclaimed “mummy, mummy, look it’s soooooooo cooolll – I neeeeeeed one!”. Immediately re-flated with my seemingly cool business idea, because this little girl was my target customer (or so I thought), I blurted out, “I’m opening a new shop soon and this is what we’re selling”. Cue another burst balloon as the clearly interested mother asked, “so it’s a bear in a box, is that what you are selling?, what’s so special about that?”.
… this Teddy Bear was very special ..
And that was the Eureka moment that ultimately led to genesis of both Bear Factory Ireland and SurveyMe – because I realised there and then that my target audience wasn’t the little girl, it was her mother, and that I needed, what I now know is called, a ‘value proposition’. In simple terms, “If I was to provide ‘xxxx’ that did ‘yyyy’ for ‘zzzzz’, would that be something you would be interested in?” Oh, and I had to get that little statement summarised and out in one breath. Ultimately, that value proposition became the familiar Bear Factory ‘Meet & Greet’ line, “well, what we do here is help you bring your teddy bear to life”.
But returning to that afternoon in St Stephen’s Green, I met lots of mums and children, and with each and every passing interest I began and fine-tuned my value proposition. Then on a slip of paper I noted down how many had said how interested they were. It was a crude bit of market research but it was enough to return to the St Stephen’s Green the following day – except this time I wanted to know where I should open the shop. Eventually the number of questions on my list grew to about 7 because every day someone’s answer would trigger another question in my mind. My piece of paper became scruffier and more congested as time passed. What became really obvious was why Mr ‘Brown Thomas’ had so eloquently dismissed my idea a few weeks earlier. Yet, here it was, after a sunny week of lunchtimes in St Stephen’s Green and over a hundred objective opinions from passers-by, my value proposition had taken shape. So much so, that the first time I met the owner of Liffey Valley shopping centre, he was convinced to give me some prime space in his centre – and when he questioned the demand for my new concept, I was able to show him my figures on a scruffy piece of paper how I’d asked over 100 ‘D4 yummy mummies’ and got a near 90% approval rating for Bear Factory being somewhere they would enjoy bringing their children for a few hours entertainment, ‘to bring a bear to life’.
Although times have moved on, and if SurveyMe had been around then I would have been able to impress Mr ‘Liffey Valley’ with their feedback in real-time on a beautiful graph (or even been able to stand in Liffey Valley and survey potential customers while he watched the live results), the principal is still the same. Before you dive into a new business idea, you need a value proposition that your customers clearly understand. To do this you first need to ask people who will give you an objective answer. Only when you have got a value proposition that more than 40% of objective people you pitch it to, reply they would be “disappointed” if you didn’t do it then, and only then, have you got a sustainable business idea.
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