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I’ve worked with entrepreneurs for more than 25 years, and most of the successful ones have created and developed their products on their own and love being independent. “Being my own boss” is the answer I usually get when I ask them what they like best about being an entrepreneur.
But in fact, successful entrepreneurs are not Lone Rangers–which, for inexperienced entrepreneurs, should be regarded as a good thing. I’ve talked to more than 100 successful entrepreneurs over the past 10 years, and they frequently don’t have a lot of business management experience, don’t have any more money than the average person and typically have never tried to introduce a product before.
The key moment in their entrepreneurial process has been when they recognized their shortcomings and sought help from other people. That help is exactly what they need to succeed, and it can come in hundreds of forms, such as these:
- A manufacturer willing to extend dating on orders
- An independent sales agent or industry insider who offers tips on getting a product out into the market
- A retailer who heavily promotes your product at its expense
- A manufacturer who funds your research and development for the option on a private label contract
- A marketer who shares a booth with you at a major convention or provides an introduction to key industry buyers
- An industry connection who helps you fund your initial production run
- Another entrepreneur who tells you the best fairs and events to attend, and helps you price your product
- A manufacturer who lets you use his or her model shop to produce your products in return for help filling backorders on Saturday
- An industry insider who first invests in your company and then comes to work with you to make the product a success
- A retailer who gives you a provisional order–they’ll buy when and if you can deliver–so you can get a manufacturer to fund an initial production run
You should think about the kind of help you will need right at the start, before you even begin to introduce a product to market. If you can prototype and make your product at home, you can probably survive on your own until you’re ready to sell. But most entrepreneurs have products that require a little more investment upfront, and they could go broke if they wait too long to get experienced advice. Not only that, but getting help early will prevent a lot of mistakes in creating your product, and this will help you save money for the crucial tasks that lie ahead.
The Lone Ranger Is Dead
The product life cycle today is short–very short. Products can come and go in just two to three years, and this dramatic change presents both problems and opportunities for entrepreneurs. On one hand, entrepreneurs can’t afford to work alone and follow the normal two- to five-year process to get their product to market since in that time the market may pass them by. This means entrepreneurs can’t be independent, can’t control everything that happens with their product and may have just a few short years of successful selling.
The good news is that established marketers and manufacturers have an even harder time getting to market quickly, so nimble entrepreneurs can beat them to the punch. The big manufacturers are responding to this challenge by working with an increasing number of outside companies, including entrepreneurs, to keep on the leading edge of their markets. This also means that manufacturers, marketers, distributors and retailers are generally willing to help entrepreneurs. All you have to do is ask.
The simple fact is that teamwork equals success. In today’s crowded market, individual entrepreneurs have a hard time standing out and getting noticed. To build the necessary size and momentum, you need resources, and if you don’t have them, you must team up with someone who does–someone who has the money, the manufacturing prowess, or the distribution reach required to turn a new product into a success.
Every month I hear at least one new story of an entrepreneur forming alliances to succeed. Below are examples of three entrepreneurs who’ve done this, and they are just the tip of the iceberg. If you keep alert, you’ll read about other examples in your local newspapers and business magazines. Might that other person’s experience work for you? Remember to always be on the lookout for opportunities to make alliances.
- Karen Alvarez of Dublin, California, invented the Baby Comfort Strap, a product that keeps children safely strapped into shopping carts. When she first started her company, Baby Comfort Co., she was referred to Safe Strap Co., a manufacturer that sells shopping-cart straps to supermarkets. Alvarez asked Safe Strap for help, and the company agreed to make small quantities of Alvarez’s product and to 90-day payment terms to help launch the product.
- Nathaniel Weiss, founder of G-Vox, a Philadelphia-based music company, got his start with a hardware/software product package that automatically transcribes notes played on a guitar into sheet music. His product allows guitarists to work on a new song without having to stop constantly to write down each note. Weiss has had a board of advisors from the beginning. His big break came when he formed an alliance with Fender Guitar Co. Fender agreed to sell his product to guitar stores, both as an accessory and as an option on Fender guitars. Once his company generated some initial sales success, Weiss went out and found several marketing people with extensive experience selling to retail music stores to push his product into the market.
- Gary Lewtschenko of Glenmore Park, Australia, had worked for six years on his Anywhere Tent–which can be set up in mud, shallow water, over fallen trees or on rocky ledges–without achieving any significant market penetration. Then, in 2005, he took on four partners with experience in developing new businesses, who put their expertise and $75,000 into his company. Lewtschenko gave up 80 percent of his company, which might seem like a lot, but he feels it was a good deal, and sales took a sharp upturn once he found partners. His plan is to use the income from the Anywhere Tent to launch other products on his own through his company, Unique Creations. As for Lewtschenko’s partners, who were judges on Dragon’s Den, a TV competition that looked for new, exciting products, they got what they wanted, too: major involvement in a new product they felt had a real niche in a promising market.
The New Product Factory
There are three tasks involved in launching a successful product.
- Finding an opportunity in the marketplace, and then creating a product to meet that opportunity. The well-conceived product meets a consumer desire or need and can be produced at a price that provides buyers with value. This is normally an entrepreneur’s strength.
- Manufacturing the product. Tooling, manufacturing fixtures, working capital, quality control, value engineering, product liability insurance, regulatory approvals and a host of other complicated concerns are the realm of the manufacturer.
- Marketing the product. Pricing, packaging, promotional allowances and connecting with major buyers are some of the simpler tasks of marketing. Understanding customer needs, positioning the product so it will sell, creating a memorable brand and product image, and finding customer hot buttons are some of the tactics marketers use to successfully introduce a product.
As you look at these three tasks, ask yourself: Does it make sense for entrepreneurs to try to do everything involved in bringing a product to market? I don’t think so. Each of the jobs of new product development, marketing and manufacturing requires in-depth expertise. Your goal as an entrepreneur is to learn to use other people so that both you and they make money. Once you do that, you’ll be able to devote your time to being creative and inventing new products.
Unfortunately, there is no single way to find partners. Each market and each product are different and require a particular approach; for each new endeavor, you will need to go to shows, make industry contacts and find just the right marketing and manufacturing partners. But once you become skilled at finding partners, you’ll only be limited by your creativity and your ability to come up with new ideas that the market wants.