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So the new Entrepreneur has this great idea! Then, they get excited because they could make a lot of money doing it! �I am going to be rich!� So, they embark on the emotional high of becoming an Entrepreneur. They become infatuated with their idea. It is the best idea and the only idea worth investing. Most need money to fund their idea, yet they don�t want to give anything up to get other people�s money. Their valuation of the business is way over inflated and they have no sales. Ego and control start to get in the way.
I have been involved in several start-up ventures and this is a common pattern that occurs. As I sit at the Venture Club of Indiana and listen to new ideas being pitched around the table, the pattern is there. The �New Entrepreneur� is excited about their great idea, yet they cannot really articulate how to make money with it. Their assumptions about their market are not well defined and they do not really understand what it takes to get a business going. They don�t understand why no one will invest in their business. Unsuccessful entrepreneurs gladly feed into their egos and leave results starving at the table.
The reality is New Entrepreneurs need to focus on results. In business, results equal sales and profits. Logos, names, and images can have value � only if people buy because of the name, logo and image.
Get centered Answering the questions of your buyers:
1. What is it? 2. What is the value? 3. How do I get it? 4. Has anyone else used it? a. What do they say? b. If not? What is the edge I get with it? 5. Yes, I want one!
With limited resources and limited time, investment needs to be on finding the market, bringing them to you, engaging the market, and closing some deals or selling product. The question to always ask:
Is what I am doing or spending money going to help me generate more sales?
Case in point, people always feel like they need to reinvent something that has been tested to work. (Ok�I respect out of the box thinking, but dollars can be wasted on IT projects that bring very little value in the end). E-Commerce is an area that people feel the need to �customize�. We had a client that need to change e-Commerce systems because the one they were using did not support standard marketing practices for e-Commerce sites. Yet, they would not do it because the one they were using had a feature that really brought no value to the buyer or their business. Again, was what they were doing going to help them generate more sales? The answer was no, yet they chose to spend $20,000 when $3,500 would have done the job for the next five years.
So, New Entrepreneurs, here are some things to keep in mind:
1. No one cares about �the idea.� They care about what the idea will do for them. 2. Investors don�t care about �the idea.� They care if their investment in the idea will make them money. 3. Investors don�t invest in �the idea�, they invest in the people behind the idea.
