Like most entrepreneurs, I thought my “napkin” idea for PetsMD was perfect.
I had a sick dog one Sunday evening and needed some pet health information that I could trust and written so that I could understand it. What I found was everything from goofy blogs on random ailments to Web sites that I would have needed a science degree to understand. So my co-founder and I set out to create a pet health resource that all pet owners could understand and trust.
Being a complete novice to the Internet space and a first-time startup founder, I needed a little guidance. Lucky for me I was accepted into an incubator program. After 10 weeks of intense mentorship, I was surprised to find that my business idea had changed completely: I went from being an information and content-focused company to a software business specializing in online veterinary appointment booking.
Never in a million years did I think I would run a software company and sell to this particular audience. It took time and money for me to understand that sticking to my guns and pushing against the natural evolution of the company was not the right way to go.
Knowing what your customers want
So why did my original idea suck? Well for starters, I had too many ideas on ways to monetize the site: First we were going to be about content and ads, then products, then subscriptions… and the list went on and on with no focus. Lesson learned, I needed to hone in on a real revenue generator. After meeting with my mentors, we narrowed our focus to one revenue model. As one mentor put it, ” you never have a shortage of ideas, just focus and execute on one!”
So armed with that direction, we set out to learn from our users and potential users exactly what they wanted to see us develop. After all, your idea still sucks at this point until you hear from people who are actually ready to pay you money for it. We set out to talk to 50 pet owners to find out exactly what their pain points are on a daily basis. After many a conversation with potential buyers, we created software that would solve their problems.
They wanted more than what we were offering — turns out they wanted us to both help them find the right product and to guide them to a veterinarian. Then we flipped the table and spoke to as many vets we could gather to find out their pain points. We had a match! They desperately needed a way to manage the front-desk chaos, reach new clients, retain existing clients, and measure their ad dollars.
The big pivot
We started this company with an advertising-based business model in mind. In a few short weeks, we completed transformed into a software-as-a-service, or SaaS, business model. Our customers changed from advertisers and pet owners to veterinarians who wanted appointment-booking software. We never thought we would end up where we are today, but most entrepreneurs say the exact same thing.
If we hadn’t received the direction that we did, we probably would have built the company like a spec house, based on everything we thought our customers wanted/needed. Finding out what people need and what they are willing to pay for first makes so much more sense — and it saves you a lot of time and money. Plus, it lets you approach potential investors with financials that are based on real figures, which they love to see.
A little piece of advice
I’m just going to say it, in case no one else is willing to say it for you: The idea in your head or scribbled on a napkin is probably crap. But go ahead and pursue it anyway. Your idea will change and it may at some point barely resemble the one that first gave you inspiration. That’s how you find out what you’re really about.
Companies evolve and your ideas will fail, but great companies leverage that failure into a successful concept and if they need to change strategies, they do it quickly. This is the real competitive advantage that a small start-up has over “the big guys.” If a company like Apple wants to change even the package their software comes in, it’s a logistical nightmare. A start-up is agile by definition, so use this to your advantage.
Be flexible with your ideas, and get new ones as often as you can from your users, your staff, and your friends. If you’re open to failing, then the process will reward you in the end.
There really is no instruction manual for starting up a company, but if all else fails, try a variation of the directions you see on the back of shampoo bottles: “Try. Fail. Repeat.”
by: Tina Cannon, previously written and published for CBSnews.com