Don’t make it until you’ve sold it – common mistake of entrepreneurs

DRAGONSDENI quite often get various people coming in for a chat – ‘I’ve developed this amazing tool, or product can I come in and show you’. I feel like a member of a cashless version of Dragons Den!

All too often I’ll say ‘have you looked at the size of the market?’ Oh yeah its huge, I can retire early off it. OK I say lets do a quick number. I rely on the Fermi Method a lot. Once I’ve gone through a fag packet calculation the response is usually either a ‘no, you’re wrong’ or just silence. I haven’t been wrong yet. The response is usually that because they have sunk a load of time or cash into developing it and they don’t want it to fail. I wish that their dreams could come true but I equally wish they came to me with general idea not the finished product.

Next time, I think I will show them the latest research from Harvard Business Review that sites one of the most common mistakes from the 120 entrepreneurs interviewed was building early and selling late. The advice is to go and talk to five key customers about the general concept that you are developing, listen to the feedback before going off and building the product.

As one entrepreneur put it “Don’t make anything until you sell it. Get people really interested in buying it before you invest too much time and effort.”

4 Comments on “Don’t make it until you’ve sold it – common mistake of entrepreneurs

  1. Simon, great minds think alike – Gunter Pauli tweeted recently “None of my students keen on starting a business as an entrepreneur are permitted to write a business plan unless they have a first invoice paid”

  2. While I generally agree Simon, there is a pretty big exception to this rule in the form of Facebook. I don’t think Mark Zuckerberg would have got very far if he had have gone door-knocking talking about how he was going to build a global network connection of everyone… I think the response might have been “what? just like MySpace?” . I think this highlights the importance of agile prototyping to at least get a minimum viable proof-of-concept running.

    • Thanks Mark. Absolutely, but what originally built wasn’t what Facebook is now and equally what he originally built wasn’t anything like MySpace – if the movie has any realm of truth!

    • Thanks Mark. Absolutely, but what originally built wasn’t what Facebook is now and equally what he originally built wasn’t anything like MySpace – if the movie has any realm of truth!

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