The Most Common Mistakes Entrepreneurs Make and Why Markets Tolerate No Shortcuts
The question I receive more often than any other is: “What is the mistake you most frequently observe inventors or entrepreneurs making?” The answer is an easy one. Most unsuccessful entrepreneurs try to get to market by taking shortcuts. We live in a commercial maelstrom. The marketplace is constantly churning, changing, adapting. Successful marketers are constantly adjusting, anticipating, re-inventing. Opportunity for product launches entering this market has never been greater, but there is zero tolerance in this highly cluttered environment for half done, distorted product or service offerings. The commercial markets will simply spit out these otherwise, potentially powerful possibilities.
How do we define a shortcut and why does each definition disqualify the product from successfully positioning itself in the contemporary marketplace? Here is a list of some of the most basic shortcuts we see entrepreneurs attempt to circumvent.
No Patent, Trademark, Copyright Filing Typically the cost of filing and utilizing a patent attorney is the principal deterrent. Many entrepreneurs attempt to fill in the blanks on a template available from bookstores or the inter-net and self-file. We have never, never seen this avenue succeed. There is a reason that patent lawyers practice no other type of law. This is the classic specialty practice. Investors, partners or licensees want to know that the idea they are reviewing has protection.
Amateur Prototype or Design Professional quality, shelf ready prototypes are an absolute requirement when seeking to place, sell or license a product opportunity. The 3-dimension CAD art is also crucial in patent submissions and creating the cost of manufacturing the product. Occasionally the inventor has the skills and equipment needed to successfully create this absolutely crucial design element. However, we usually see amateur attempts to avoid the cost, time and research necessary to properly render the features and benefits of the product or service. This is an opportunity killer.
Fictional Sales Model Inventors are passionate about their creations, and passion is important. However, they often do not properly research the size of their target market, competition and create a sales model that is supportable and believable. What is a sales model? A sales model is a quantified, qualified, well-researched formula to extrapolate the realistic sales potential for an opportunity. Knowing the dead net cost of goods is absolutely essential in establishing a believable sales model. What is the demographic for the product? What is the competitive overview? How does the new product differ in features and benefits from competition?
During year one, two, three, how many store openings will realistically be obtained? What will be the annualized turnover per door? Will there be international sales, kicking in when? A fictional sales model is tantamount to opportunity murder.
Let?s Guess the Cost of Goods
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