It’s the million-dollar question; you have a good idea for a new product or service. On the surface it looks promising; it could work… but you don’t have any industry experience, so it will most likely fail, right? Possibly, but then any business idea that isn’t executed in the right way can fail (and many do). But is launching a business with little or no sector experience a sensible move? Do you need relevant market experience to make it a success?
Personally, I don’t think you do - but you might want to find someone (whether that is simply a mentor or someone with a vested interest) who does have the right experience to support your quest into unchartered territories.
High flyers, old timers and your own experience
If you follow my advice, you should look for two types of people: the high flyers with proven track records who will be able to help you and your business in the early stages of launch (they may even want to invest). Or ‘old-timers’ for want of a better phrase – by this I mean credible entrepreneurs or senior employees who have plenty of industry experience and backgrounds in setting up businesses. But who may want a quiet life operationally (leaving you to get on with the thrust of the launch knowing you have someone around as the ‘sage’.)
That said if you do choose to bring in a more mature entrepreneur or corporate employee it needs to be the right kind of person - someone who has kept up with modern times (if relevant to your product/service idea). The more experienced/aged entrepreneur/corporate person is more likely to be interested in money rather than shares in the business.
Whilst the younger ‘high flyer’ will want a piece of the action and would, therefore, as a pre-requisite, need to be able to demonstrate financial strength, proven and tangible success in the business world, and success in the target sector. Otherwise, you may well be better off using your own ‘nouse’, experience and instincts.
There are of course benefits to having the right market experience when you launch a new business because you don’t tend to make the same mistakes as everyone else starting out on a new path. But as with all new businesses you do have to make sure you have a competitive differentiation and edge (at Zupa we call it the 10x Smash Rate factor to beat any opposition) as well as top delivery. Otherwise, expect a decent fightback from the established competition!
Finally, researching the opposition is critical to that 10x Smash Rate because you can see what the pains to the current customers are as well as understanding what the gains need to be with your product/service to create a world-class, industry-leading offer.
Making the wrong move can be costly… or an opportunity!
Not having the right experience can also bring with it potential barriers to success as opposed to barriers to entry for the business. Because this lack of knowledge could slow your growth and there is a greater chance of making the wrong move, which could be costly in terms of overhead increase and income reduction. Something no-one wants to be faced with – an own goal!
The flip side to that is that you can find some really great people who have technical experience and no sector experience. If they are motivated enough (meaning self-starter and focused), then they can look at the research data with a very different mind to the ‘old hack’ who knows everything but might have slowed down or just not motivated and sees the project in a different way to the young, thrusting person who sees it as an opportunity.
Now, using a real live case study, how are we doing this at Zupa?
To conclude this post, let’s list out our ‘zupaWay’ and see how it has affected our business to date:
- The ‘Zupa concept’; ‘better business and professional lifestyle management tools’ has evolved over 2017/18, from the initial thoughts from myself as an experienced and successful entrepreneur supported by our new team, to where we feel we want the technical output to deliver real gains to our customers.
- The business has eProcurement experience as well as a successful catering management B2B track record. We don’t have a B2C track record as such, but we are bringing in a more innovative model to create the zChat system as the backbone of the multiple apps – thereby creating the option for the user to work on their personal and/or business lives seamlessly.
- We have sought out a young, high flying technology professional to lead our ever-growing development team who are all settling in nicely. That has helped us build a modern, strong and robust architecture ready for our existing people and new recruits to get moving on the journey. While the concept has been developing, we know our team is slightly ‘in the dark’ but pretty much everything we have been building; the infrastructure, secure environments and messaging software have been on point and we now starting to utilise that early work. As always, some stuff has been dropped as the early proof of concepts did change – but that is understandable!
- Next up is a company-wide briefing on where we are going and how we will get there – organised for September onwards…
- We have also strengthened our marketing and research capabilities (to identify our differentiation and to tell the potential customers about it at the same time), plus we are creating a good financial and HR team. The operational support, client liaison and sales focused teams are all experienced in what we do with B2B and will pick up the requirements of B2C quickly, as we launch..
In the next post, we'll investigate part one of our strategy, alongside additional thoughts on building a business in a new sector.