Got A Business Idea? Start By Finding Your Why
Posted: (Wednesday 16 September 2020)
There’s plenty of content out there for entrepreneurs looking to take their business to the next level. And you may wish to read all of it because the advice on growth hacking, fundraising, hiring and retaining profit is usually well-founded and inspiring.
But before you get too deep in the weeds, I recommend you get back to the basics: finding the why of your business. As an entrepreneur myself, I want to share the questions I considered when starting each of my businesses to ensure I had nailed down my own why.
Four Questions All Entrepreneurs Should Ask Themselves
1. Why Now?
Timing is everything, but it can be hard to understand and feel. You may have the right idea, but be a decade early.
Even if you built the most beautiful brand to sell dress shoes, if everyone wanted sneakers, then your shoebox or website alone wouldn’t get people to buy your product.
So the right way to gauge demand is by testing. You can do this objectively by using analytics, and subjectively by asking lots of questions in different environments.
Start by creating a basic website, put some money toward Google Ads, and test for interest, clicks and traffic. In my experience, this was more fruitful than relying on Facebook Analytics, which wasn’t a true barometer of consumer interests or behaviour.
Next, put human effort into gauging the demand of what you’re creating. I encourage you to get out of your usual networking bubble; attend conferences or even connect with people in other cities to avoid groupthink.
Don’t be afraid to talk about what you’re creating. If you’re the right person for the job, no one else will be able to do it.
Only after you’ve tested for demand should you consider why it may or may not work.
2. Why Won’t This Work?
Don’t write one word of a business plan until you come up with an enormous list of all the reasons it won’t work. This requires uncovering fatal flaws. A fatal flaw is equivalent to breaking the law or being unable to make money.
Of course, pioneering companies like Airbnb and Uber eventually ruffled some legal feathers, but that’s because they disrupted traditional hospitality and transportation models at such large scales. They forced legislation to react and be rewritten in some cases.
Also remember: An opinion is very different from a fatal flaw. When I started Roofstock, people told me there was no way retail investors would buy a home without walking through it. But I didn’t believe their opinions because those concerns weren’t fatal flaws.
Finally, there’s making money. You have to figure out how you’ll do that, even if it’s several years from now. Fill in this statement with as many items as possible: "This will eventually make money because of X, Y, Z."
If you can get through your list of why your business won’t work and still want to build it, then move to the next step.
3. Why Me?
The why of developing your business will shape how you actually go about developing, pitching, iterating and growing it. This helps narrow the focus back on you, the entrepreneur. Why are you the right person to shepherd this from an idea to a thriving company?
Without you, ostensibly anyone could start this business. Focus on what drives you each day and (of course) why you started his business in the first place.
Most of my businesses started out of frustration that something didn’t already exist to solve my problem. However, people find passion in many other ways. Your passion will eventually help you sell yourself, alongside your business idea.
4. Why Do I Need A Partner?
When I was starting Roofstock, which enabled me to be successful was connecting with people. The person we hired as CEO became the yin to my yang. I discussed my idea with him, and his real estate and technology expertise propelled it forward. Then, we tapped our chief development officer, who knew everything about raising capital in this space.
If you believe something should exist but you don't have the knowledge, bring in outside help and expertise. You’re going to need it.
Many young entrepreneurs think they need to put the world on their shoulders and outwork everyone. While you do need a work ethic, you also need a village to help hold up the world. If you don’t have that, you may end up burning out.
Get accustomed to making connections, and you’ll begin clicking with people who may eventually be on your team or even back you financially. Keep in mind that growth is infinite. Finding the right people is most definitely the multiplier.
Your Why Is Your Purpose
Once you’ve firmly rooted your why you’ll be able to outline the purpose of your business in a way that stays true to your idea and presents it in the best possible light.
Avoid the trap many entrepreneurs find themselves in: spending too much energy on the design of a product and not on what it does or why it matters.
People may think that Apple’s success is driven by design, but I believe great product design and user experience were merely accelerators to its business. I think Apple is successful because of its clear purpose.
So first, focus on a market, and get feedback from it. Test, test and test again until you know what people want. List out why it may or may not work. And figure out why this business needs you and others. Only then can you focus on building a beautiful product or brand. Your competitive advantage lies more in the way of your business than the look of it.
And those investors you’re after? They’ll see the strength of what is driving you, too, and will be more easily convinced when you’ve demonstrated that you’ve thought carefully about who your business truly serves (hint: it’s not you).
By Gregor Watson, co-founder and chairman of Roofstock, an online marketplace for buying and selling single-family rental properties.
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