Startup: An Insider's Guide to Launching and Running a Business Read Free

numerous other options available in the marketplace, the 30-minute line of devoted coffee drinkers queued up every morning stands as a literal testament to the resonance the company created. Where did this resonance come from? A high-quality product, delivered in a way that people want. “ It’s really about an appreciation for unnecessary beauty,” founder James Freeman says, “ and a willingness to work for it .” 1
Note An entrepreneur is a builder of resonance.
    In order to develop resonance, a startup has to start with a product or service. Selecting that starting point requires a few perspectives that are vital and definitely worth recognizing. Let’s look at each in turn.
    Entrepreneurs Create Something New
    Entrepreneurship always starts with a proposition: you are going to solve someone’s problem—specifically:
     
You have information or insight that other people don’t have.
You have a unique product.
You will deliver an existing product to a group that does not have it.
You will deliver an existing product in a new way, which could be faster, cheaper, or better.
    __________
    1 Fortune magazine , September 26, 2011
    It Is Compelling
    The business idea is important enough that, when properly executed, it will trigger a specific customer group to reach into their pockets, pull out their money, and pay you for it.
    You Can Scale It
    Does your idea structurally have enough potential transactions to make enough money? If you buckle down tight and build this business, identify how big it can get, and what resources you will need to get there.
    If you are marketing your own time as a consultant, for instance, is it scalable to your needs? You only have 24 hours a day to sell—and will occasionally need to sleep and eat. So your inventory of product is limited.
    If you are selling products, what are the physical limitations on how much product you can get your hands on and connect with customers? These include the following:
     
Product availability : If you are selling large, complex products, how many can you actually manufacture per year?
Demand : What will the market bear in terms of transactions that you can compete for?
    Play it out, and see what the outer bounds of your idea look like in terms of scale, product availability, and demand of the market.
    You Can Control It
    Having chosen a product or service, can you control the vital elements of the business? These include things like access to merchandise, licensing, and so forth. This is a structural aspect of the business that you are responsible for figuring out before you jump in.
     
What political, legislative, or economic factors are you depending on to stay in business? For example, building a vehicle emissions testing device as a core product is highly dependent on having states legislate that such testing is required.
If your chosen business model is dependent on a third-party license or company, what are the risks associated with that dependency? What guarantees do you have for the long-term stability and availability of that relationship? For example, becoming an independent agent of an insurance company creates a clear dependence on that company’s strength and evolving reputation.
An example of this is the current fad of serve-yourself yogurt shops, which is hitting hard in Austin, Texas. A dozen such shops have opened there in the last 18 months. These market players cannot control how many more of these will pop up and eat up local market share from them—they just have to watch what happens.
An example of “control done right” is a car dealership. When you are lucky enough to get the go-ahead to open a Honda or Lexus dealership, you are given a region wherein only you will represent the brand. That is a powerful type of control.
If you are licensing a solar technology from China to build a customer base in Europe, can you negotiate an exclusive right to do so? Or will any company with an interest in the technology be able to do the