7 Questions to Consider in Monetizing Your Product or Service

by Eric Tsai

You have your great idea and you’re ready to start your business. You’re motivated and ready to jump right in or better yet, you’ve been working at it for a while getting all the pieces together. You believe in your idea and you’re ready to invest not just time but money.

So the $54,000 question comes up: how are you going to make money off your product or service?

Here are 7 questions to consider in monetizing your great idea into a great business idea.  And if you are serious about making it on your own or presenting it to investors you will have to answer these questions anyway:

1. Is there a viable market for your product or service? Have some data or relevant information on your target market.

2. Do you have a compelling value proposition for your customers? Value perception varies, know  your customers.

3. Do you know your development cost? Be realistic on the time and money it takes to get to the launch phase.

4. Can you reach your customers in a cost-effective way? The distribution channel and how to get there.

5. Are you competitive? Know your friends and enemies in the market.

6. Can you build a brand? The story behind your company and marketing tactics.

7. How far are you willing to go? Have plan B, C and D in case you aren’t so lucky in the beginning.

If you have ideas, send me your answer to the 7 questions above (or leave it in the comments section) and I will provide my feedback.

Delete Recession 3.0, Install Entrepreneur 5.0 and Reboot

by Eric Tsai

In my previous blog “10 Tips on How To Transform Your Ideas into a Startup“, I described the current economic condition as an opportunity of a life time.  If history has taught us anything, it would be that it has taught us nothing about forecasting but everything about human nature.

The playing field is getting leveled, the perception of value is shifting.  It is time for entrepreneurial spirit to reemerge again. Let’s be clear, this is a recession NOT a depression! Technology is also changing how business gets done and the concept of entrepreneurship will take on a whole new meaning.

I just finished reading Guy Kawasaki‘s interview with Pamela Slim in which Pamela explains how to quit your job and start a company to change the world.  The interview had some excellent points dealing with emotions and strategies to start your company in her book Escape from Cubicle Nation: From Corporate Prisoner to Thriving Entrepreneur.

As an entrepreneur I find myself concurring with her statement on “perfectionism will cripple your business and thwart your plans faster than anything”.  Looking back, the successful businesses that I had managed did profit substantially but was never close to optimzed, in fact there were many areas that had major issues from products, resources to management.  And most of the gone-no-where startups I was involved with all had some sort of master plan in place before a real product was developed.

I encourage everyone that’s contemplating about starting up a startup to brainstorm some ideas.  You can begin by simply writing down all the things you’re passionate about or hobbies you really enjoy doing on one side, then list all of your attributes or strength on the other side.  And all you have to do is draw a line to match your strength to your passion and the ones with the most line drawn to should be a good starting point.

startup-ideas

What if it’s something that’s been done?  Well, it doesn’t mean you can’t succeed in doing it better or just differently. People want choices and there are many advantages if you can carve out your niche focusing on the things you do best.  First to the game doesn’t necessary give you the edge, before Wendy’s there was McDonald’s, before Facebook you got Friendster, before Under Armour there stood Nike. Even Google is being challenged now by a new search engine – Wolfram Alpha, which shows data in a way Google can’t.

Fear is in the minds of the beholder.

So what do you see yourself doing a year from now when the recession has bottomed?

10 Tips on How To Transform Your Ideas into a Startup

by Eric Tsai

In my opinion there is no better time than now to start a business, especially your own business.

The Perfect Storm

startup

This once in a lifetime recession – coupled with the convergence of technology and the explosion in social media – created a perfect storm for startups.  It depends on who you are and how you think; many entrepreneurs view the recession as an opportunity while business owners feel the pain. The Chinese word for danger consists of two characters: threat and opportunity.

So how do you take advantage of the ample opportunities out there?  What does it take to realize a great idea and turn it into a business?  The answer is simpler than you might imagine.

Know Thyself

Think about the kinds of food you enjoy, the music you listen to, the sports you watch, and other the countless decisions that define you: can you explain the reasoning behind your choices?  Know thyself is defined in Wikipedia as “the ideal of understanding human behavior, morals, and thought, because ultimately to understand oneself is to understand other humans as well.”

Your decisions determine who you are and how you would react in different situations:  it is important to understand why you make certain choices over others.

A fast and easy way to find out about yourself is through personality assessment.  You can find one online to get instant results or go to your local bookstore and read a few for free before you purchase them. I’ve personally taken the DISC test and the StrengthFinder test for job interviews and feel they are accurate and provide lots of insight about my behaviors at work under various conditions.

It’s easy to be inspired by stories  about successful people like Richard Branson (Virgin), Steve Jobs (Apple), Fred Smith (FedEx) or Donald Trump and Oprah Winfrey.  It’s obvious that each of them  worked extremely hard to get to where they are today.  However, inspiration only goes so far: the rest must be fulfilled with practicalities and tactics.  Most startups and ideas fail because they either never got far enough or the founder(s) gave up aside from the obvious reasons listed here.

Personally, I believe most people are lazy when dealing with everyday tasks.  In a time like this, the real entrepreneurs will take charge of their destiny and the fake ones will go back to their other jobs. If you want to start your business, do it with a plan and gradually work towards leaving your day job so you still have the predictable income before you’re on your own.  Saving enough money for at least 12 months is a must if you plan to leave…have a plan B or C as well.

Instead of high-level inspiration concepts I am going to outline practical tips to get you started.

Here are 10 practical tips on how to transform your idea into a business:

starting-a-business-for-dummies1. Look for passion – Most successful people all have one common characteristic:  they are extremely driven.  The drive  is what fuels you to do better each and every day, as well as the source of your motivation.  Whether it’s your hobby or your passion, if you care about something enough it will take you a long way.  And if it can make you money, it is even better–but do not focus on money.  If you are passionate about your idea you will work harder and longer and usually that’s the first ingredient for a successful business.

2. Solve a problem – Unless you think the world is perfect, there have to be some problems or issues that you are passionate about: solve them by doing something you like.  Chances are,  other people are experiencing similar problems and you’re just one idea away from providing the solution for the group.   If you solve a problem for them, they could be potential customers.

3. Start a business plan – Having a plan will minimize the risks in starting up your business.  Think of it as the instruction manual for your “some assembly required” furniture: most people don’t read them in detail,  if at all.  When you’re having problem finishing the furniture and then you go back to the manual, it may be too late to fix mistakes you have made.   At least you have something to go by similar to your business plan.  You business plan is the blue print for your success.  Start it as soon  as you’ve identified your idea.  Even if you already have one, update it  periodically.  Just remember to work your plan and plan your work.

4. Be a believer – Have you ever wondered why brand slogans are mostly verbs?  Especially sportswear brands like Nike with Just do it and Adidas with Impossible is nothing.  They are motivational tag lines that keep athletes focused in action, staying competitive because the mind has to give up before the body does. Google founders were not discouraged just because there Yahoo and other search engines already existed.   Believe in yourself so others can follow.

5. Stay focus – In today’s technologically advanced world, information overload is constant.  There are endless resources, blogs, books, newsletters and courses you can access but you must remain focused on your own niche.  Actions not only speaks louder but they will bring you results, positive or negative…at least you can benchmark results from your decisions.  As long as the mistakes you’ve madedon’t kill you, they will enable you to make better decisions next time. Stay focused on your core business.  Do not get sidetracked.

6. Align yourself properly – Surrounding yourself with the right people can be the difference between success and failure.  You must strive to create great synergy with your idea and know why certain people are involved and others are not. Obviously when you’re in the startup mode you’ll be forced to do most everything yourself.  Once you gain traction or find trustworthy partners, learn to delegate.  Some tasks you simply have to outsource or hire professionals to do it.  Everyone must be working on what bring the most value to your business collectively and individually, including you.

7. Keep an open mind – Some of the best feedback I’ve ever received is from people that disagree with me.  There are multiple ways to get from point A to point B–right or wrong,  they are merely opinions until you execute them.  If you’re wrong it just means you have a better chance of getting it right next time.  If you’re right, you may be wrong next time.  Learn to listen.

8. Ask for help – Be prepared to ask for help and leverage as many resources as you can get your hands on, but remember to reward those that you’ve benefited from along the way.  A one man army can’t win the war.  You’ll be surprised at how many people are willing to help you for free if you just ask.

9. Brand yourself – Even if you do have the best product or idea, (subjective until proven), you need an audience.  You need people to give you the time of the day.  You need to market yourself.  I won’t go into details but you can read Dan Schawbel’s personal branding blog (his book ME 2.0) as I consider him one of the most successful individual marketers that actually provides a lot of practical, free advice.

juststartit10. Just get started – Yes, just go and do it! Don’t wonder or ponder.  Everything can be an excuse which stops you from realizing your dream of running or owning your own business.  In fact, the costs of starting up are so low now, and resources are so widely available everywhere online…do you know why you are waiting and what you are  waiting for?