October 10, 2017

The Rise and Fall of Would-Be Millionaires

Over the past 16 years since founding Encore Web Works, I’ve met with many people who earnestly believe they have the next “million-dollar idea”.  Typically, they come to us because they want us to take their idea from the concept stage into a working product (cloud, SaaS, PaaS, application etc).  

A few of those wanna-be millionaires were able to execute their ideas and we were thrilled to help with their successes.  However, the large majority did not make it past our first few conversations due to critical planning and expectation mistakes.

Here are the most common misapprehensions I’ve seen and how to avoid them. (Note this is not intended as an exhaustive list.  This is just the most common items from my experiences when meeting potential entrepreneurs and hopeful tycoons.)

  1.  Problem - Lack of market research. “I think it’s a great idea, everyone else will too!”  Have you ever thought of a great idea only to find out that you’re the only one who thinks it’s great?  I’m reminded of the “Jump to Conclusions Mat” from the movie Office Space (1999).    Solution – Do some market research.  Find out if there is a market and/or potential demand for your idea and if there is any way to monetize it (make a profit).  Pick someone to be a devil’s advocate and challenge him or her to shoot holes in your idea. This will help you determine if your idea is sound and if it can overcome the challenges it may face.
  2.  Problem - Lack of planning.  “I’m the idea man/woman.  I don’t need to think about the details.”   A French writer Antoine de Saint-Exupery has been credited with saying “A goal without a plan is just a wish”. This is a simple truth.  An idea without a plan will never evolve from a concept to a reality.   Solution – Develop a road map with specific milestones to accomplish your goal or idea.  Even if you don’t fully know how to “get there”, put some estimated actionable (aka doable) plans into a timeline.  This will quickly help illuminate the holes in your knowledge base and help you identify areas where you need to get more information.
  3. Problem - Lack of reasonable expectations. “This should be successful by next quarter.  No problem.”  If someone hasn’t done any market research and hasn’t planned a road map, it is likely he or she will have an unreasonable expectation of how long a project could take to complete.  Solution – Find the right partner or people with experience to help you.  The right people (people with experience, technical knowledge, management abilities, etc.) can make all the difference and can provide you with some educated estimates about how long things should take to develop/make/build.
  4. Problem - Lack of experience. “I’ve never done this before, but how hard can it be?”  It’s easy to see successful people or businesses and believe they are “overnight” successes.  This is rarely the truth.  Most success stories have a long backstory and list of problems that have been overcome.  Solution  Talk to some successful business owners and ask them some questions about challenges, problems, and what-not-to-do’s.  Learn from the mistakes of others and avoid some of their pain.
  5. Problem - Lack of funding.  Big Hat, no cattle.   New entrepreneurs are often surprised that it requires capital to build a business.  It’s a cliché but it’s true.  It takes money to make money.  Solution - Using your market research, your roadmap (planning), educated estimates and advise from the right partners, you’ll have a good estimate on how much money it will require to build your idea.  Make sure you figure out how to get the capital you need before you start.  The worst thing you can do is to “spend” yourself half-way through a project and realize you must abandon it due to lack of funds.
  6. Problem - Lack of commitment/no project hero.  “I’m just going to turn this over to you so you can make it a success.”   In my opinion, this is the worst of the problems I’ve seen.   No one will be as passionate about your new idea as you.  If you aren’t willing to be the advocate for your project, why would anyone else?   Solution – Understand the level of effort it will take to accomplish your goal (see the previous suggestions), understand the risks involved, and be willing to make the sacrifices necessary to accomplish it.  If you’re unwilling to do these things, it probably means you don’t believe in your idea and should walk away.

The items above all equate to a simple concept that is not simple to execute; Planning.  Coming up with a great idea is the easy part.  Planning a specific strategy to accomplish the idea is the hard part.  But if you genuinely have a great idea and are willing to do the work to make it through all the stages, you may just be that next “millionaire”.   Our nation was built by people with great ideas and the courage to make them happen.  Good Luck!