Having good ideas seems on the surface to be a good thing, and in part it is. Where it becomes a problem is when there are too many ideas or when you move from one idea to the next to quickly. the more that happens the more likely you are to move on to the next idea and the next and the next.
Never was this more clear than on a recent coaching call with one of my clients.
As I hung up the phone I knew that I was going to have a lot of work on my hands. It was a regular weekly coaching call but it had taken an unexpected turn.
The client, Rick, had been in his current business for roughly five years with reasonable success that had been steadily growing. When that growth plateaued he reached out for help. We had done quite a bit of work together to identify the problems and begin to resolve the issues. Now six months in he had an idea for taking his business in a new direction.
This came about because Rick felt that things were not moving fast enough. He wanted to see the transition from the plateau back to the kind of growth that he had previously, actually he wanted more than he had in the past. And while the plans we had put together were progressing, he felt that it was not quick enough and had been kicking ideas around.
This was not the first time. Over the last few months he had proposed at least one major new idea every other week. Most of the ideas were for radically new products, some massive change in the applications he was selling or some totally new and unrelated target market. I had pulled him back to the source of the problems and kept him focused on marketing, sales and strengthening his core offerings.
Now Rick had come up with an idea to build a new joint venture with Jim, another entrepreneur that he had known for some time. Rick’s company sold operations analytics software aimed at enterprise users. The new partnership would redevelop the software and target the small business users because in his words “there are so many of them and they need something like this”.
His ‘would be’ partner was a solo entrepreneur who had worked as a contract CFO since the small firm he worked at went under two years before. Rick and Jim had figured out that there were lots of small business who could use Jim’s software if it could be redesigned and since mobile apps were the way of the future they were going to do it on the Android and Apple platforms.
I asked him what market research he had conducted? He said none, but he and his friend were sure that it was a good idea. I agreed and said yes it was a good idea and it’s probably not one that you should pursue however. And then I proceeded to walk him through the logic of why this newest idea wasn’t likely to be the savior of his business.
The quick rundown goes like this:
- The existing business was geared for B2B customers at the Enterprise level
- They lacked market experience in the small business sector
- Most of the mobile app clients would only buy 1-2 copies at a relatively low price
- Current clients bought 25 or more licenses and some over 100 and all at a fairly high price
- The level of competition for mobile apps was high
- The barrier to entry for mobile apps was low compared to the high barrier for enterprise software
- The relationships he had built were all in the enterprise market
- His development and support teams were all geared to the enterprise mindset
- They had little mobile experience except with enterprise clients
While they had a mobile component It was not their strong suit. In fact they brought in contract resources for the designed and development of the mobile portions of their tools. Not a bad thing as it was only a small portion of their product, however it points up their lack of strength in the area and now that wanted to move entirely in that direction.
Also the development on their enterprise software to include the new mobile component was a big part of what slowed down their growth. The effort to design and develop it as well as market and implement had added considerable cost. The enterprise market was slow on the uptake but the opportunity was starting to pan out.
Customers were just starting to warm up to the idea and I foresaw a significant uptake in the next two years as the app really proved itself. If he continued to focus on the current business he already had a successful sales team. The developers were getting ready to start designing a new version based on the extensive feedback that they had gathered from their existing customers.
Most of the existing development effort would not be portable. So by turning away the current clients and starting anew he would have to spend the next 8 months developing the new app. Plus, for the mobile platform he would either have to hire new developers or contract resources. All of whom would have to come up to speed on the business.
“But” he protested, “the market is so much bigger and we can get Jim to do the marketing. He knows lots of small businesses”
Yes it is true that the problem you have not yet tackled always seems easier than the one you have been struggling with.
I pulled him back to reality by focusing on the market he was in now.
- Was the market still growing? Yes
- Was it still profitable? Yes
- Could he increase sales with existing clients? Yes
- Did he have a good track record of success? Yes
- Could he add more services in the existing market? Yes
- Were there areas that he could enhance his software to capture more business? Yes
After that I asked him more about Jim and how the idea came about.
- Who’s ideas was it? Jim’s
- Has he ever developed software? No
- Has he worked at a software developer? No
- Has he worked with any small businesses who need mobile apps for operations analytics? No
- Has he talked with any? No
- How do you know that they exist? He did not answer this
- What does Jim bring to this? He did not answer this either
I could tell I was starting to hit home so I followed on with a series of questions to put the new idea in perspective.
- How many mobile clients do you need to equal the current level of revenue? Don’t know
- What is the selling price of the app? Don’t know
- What is the mobile user willing to pay? Don’t know
- How do you plan to get to market? Don’t know
- Who are the competitors? There aren’t any. This last response was said as if it was a good thing rather than a red flag.
- What is the effort required to get the product to market? Don’t know yet
- What is the cost to get it to market? Don’t know yet
- How will you answer all of these questions?
I followed up our phone call with an email. In that email I asked him to come up with 10 new ideas for generating more revenue from his existing line of business. I included the list that he had generated months ago that the team was actively working on and said it had to be 10 different ideas.
The next day I got a message back from him. He had sat with his team and in 20 minutes they came up with 12 new ideas for expanding the application to allow them to sell more to existing clients. Several of the ideas were direct from customers over the last 2 months. He was going to refocus on the existing products and let Jim know that there proposed joint venture would have to wait.
New ideas always seem easier than the existing problems you are struggling with right now. Maybe it is because they are better and maybe because you do not know all the details yet.
It is very easy to generate ideas. Even good ideas are plentiful.
Ideas that can be implemented are less plentiful.
Implementation of ideas is much harder to come by then the idea itself. Successful implementations are rarer still.
Focus your ideas on what you have. Your customers will tell you what they need and when it is time to change.