What Startup Founders Could Learn From Mom & Pop Stores
I work with founders of digital (internet) startups every day. The really early stage stuff, before hardly any support, structure or particularly, money. And that’s the problem. Most people think that “money” is going to help them figure out what to sell. Money doesn’t define a “business”, it’s whatever you’re selling that does.
Too many people I talk to are trying to build “something” on someone else’s resources and then figure out how to “sell” it later and that removes a fundamental component in starting a viable business.
Creating something unique, a value proposition that makes someone’s life better.
A business provides goods and services to customers in exchange for other goods, services, or money and the goal is for sales to be more than expenditures resulting in a profit.
Let’s take a typical Mom & Pop entrepreneur. He (she) starts out with an idea to sell a product. They define what their “customer” looks like which establishes what type of local will best suit their needs. They look at the competition to see what they sell, charge, where they’re located and what they do differently. They figure out how to reach these potential buyers and then formulate something unique. Of course, every business has some expenses at the start — equipment, rent, marketing collateral and stock and they manage to scrape this together.
And then they start. They open the doors and see who comes in. They observe and ask tons of questions. They make adjustments, change prices, presentations and even opening hours. At it’s only then, if the business is booming beyond what they imagined (planned) do they search for additional financing — because they need to front the money for more product, supplies and other costs (cash-flow) that many new businesses face. But the significant difference is that they’ve already sold something, they’ve proven that they’ve accomplished something unique and they have gathered paying customers. What they’ve achieved is nothing short of sound business basics — you start from the “what” and work your way to the “how”.
Launching (most) internet ventures today cost’s very little because of the skills involved (notably programming) that are mostly self-sufficient and the large-scale availability of practically free services to get started. The “how” (in most cases) is a given, it’s the “what” that is the true novelty.
I advise everyone I talk with, to visit a Mom & Pop store (or venture) and ask what they could bring home and apply to their idea. Surprisingly, the results speak for themselves — the conversation ineluctably starts to oscillate around tangibles and needs.
The basics of commerce & trade are anchored in our existence through centuries of evolution, digital (internet) tools don’t change the fundamentals — just the “how”.