Hire Yourself, the Startup Alternative

Hire Yourself

the Startup Alternative

by Jack Lander

Copyright 2013 Jack Lander

Published on Smashwords

Formatted by eBooksMade4You

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Table of Contents

Foreword

Chapter 1: You as Entrepreneur

Chapter 2: Finding or Creating Your Product

Chapter 3: Positioning and Branding Your Product

Chapter 4: Evaluating Your Product’s Marketability

Chapter 5: Selecting the Best Distribution Channels

Chapter 6: Exposing Your Product so that People Will Buy It

Chapter 7: Satisfying Customers

Chapter 8: Preparing Your Sell-sheet and Demonstration Video

Chapter 9: Designing Your Website

Chapter 10: Purchasing Your Product for Resale, or its Components for Assembly

Chapter 11: Prototyping and Small Production Runs

Chapter 12: Patents

Chapter 13: Your Exit Strategy

Chapter 14: Final Words

About the Author

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Foreword

Most of us have to work for a living—work for a company that we don’t own. I spent several years working for corporations, and living the daily frustrations of inept bosses, policies and procedures that stifled creativity, and frantic monthly shipments set to goals that sabotaged a more fulfilling long-range future. On the brighter side, I’ve had the pleasure of creating a few products that have made my employers millions of dollars.

But when there’s an inventor or an entrepreneur trapped in your soul, yearning to be set free—aching for self-actualization—it nags you to venture out on our own. Thus I have started and run several of my own businesses, and I depended on the money I earned to support my family and myself. Some of those businesses were successful, and others we might consider to be learning experiences. (Never trust a success author who doesn’t admit to at least one or two significant failures.)

Have I been lucky? I certainly have. But I know that luck is an unpredictable friend, and that preparation, by far, is the better partner. And by preparation I mean learning how to select and evaluate your product or service for its marketability and profitability before you invest a significant amount of money and time. Revealing how seasoned entrepreneurs accomplish this is the main theme of this book.

Now, let’s shift the focus to you. Starting up a business that you’ll depend on to earn your living can be a scary venture. What if you fail? Well, of course, it happens. I won’t kid you about that. But mostly it happens to those who don’t prepare by learning from those of us who have been there, done that, and failed and succeeded.

If you’re still feeling a little uneasy about your ability to start a business and succeed, you’ll be confident by the time you finish this book. You’ll be eager and prepared to hire yourself.

The poet, Langston Hughes wrote: What happens to a dream deferred? Does it dry up like a raisin in the sun? And the German writer, Goethe, said, If you can do something, or dream you can, then begin it, for boldness has magic and genius in it.

Let’s begin.

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Chapter 1: You as Entrepreneur

It’s unlikely that you are reading this book if you have opted to buy into a franchise like Subway®, McDonalds®, Jiffy Lube®, etc. Franchises leave the owner very little freedom to determine the menu, the process, the floor plan, or where to purchase his or her supplies. It’s a canned operation, and would be frustrating for the exceptionally imaginative and creative person. But if you have considered a franchise, you may still learn better ways to manage it herein. And you may find that ultimately you belong in an entrepreneurial venture. In any event, this book is written mainly to and for the entrepreneur.

An entrepreneurial startup is dominated by a 500 pound gorilla named Marketing, and its keeper is a small-business heretic named You. .Information about accounting, finance, forming an LLC, etc. is important, of course. But information on these routine subjects is abundant and readily available. However, effective marketing information for the small startup is rare; therefore the early chapters will concentrate on marketing as the essential theme of entrepreneurship.

In later chapters I’ll cover prototyping, pilot run, and production methods. Whether you produce on your own or purchase your product, it is vital that you understand the basic production options, and their impact on direct product cost, selling price, and profit. For now, though, it is how well you perform the six essential marketing functions that will determine your launching success. You can outsource or delegate almost everything else, but marketing is intimately and ultimately yours.

First, what do we mean by entrepreneurship? If you invented the incandescent lamp, made a working prototype, and patented your invention, you’re an inventor. If you developed it into a practical source of illumination, and brought it to the market, you’re an entrepreneur. According to historians, Friedel and Israel, 23 inventors invented the incandescent lamp prior to Edison. (Edison’s Electric Light.) But it was Edison who made the first practical light bulb in the United States, and who took it to the market. We tend to think of Edison as an inventor, but my take is that he was primarily a creative entrepreneur who invented or modified products in order to satisfy his entrepreneurial drive.

Thus, entrepreneurship is distinguished from ordinary business by its essential innovative ingredient. It must demonstrate innovation in the nature of the product or the service, or in the method of marketing of the product or service, or both. (Hereafter, I will use the word product to mean either product or service.) Innovation is essential in order to produce profit opportunity that offsets the cost of risk.

Marketing consists of six basic tasks:

* Finding or creating your product. (Chapter 2)

* Positioning and branding it. (Chapter 3)

* Evaluating your product’s marketability. (Chapter 4)

* Selecting the best distribution channels. (Chapter 5)

* Exposing your product so that people will discover it and buy it. (Chapter 6), and

* Satisfying customers. (Chapter 7)

Notice that the words sell and sales are not included in the six points above. A small entrepreneurial startup should be organized so that people come to us and buy. Amazon.com is a model of such an organization. Our time as early-phase entrepreneurs is too precious to devote to seeking and personally pitching our product to individual customers, either personally or with expensive advertising.

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Chapter 2: Finding or Creating Your Product

Entrepreneurship implies a certain novelty about the product itself, or novelty in our approach to marketing it—sometimes both. At the outset of our ventures, we need every advantage we can get. Thus, we should aim to find or create a niche product that has a competitive advantage relative to mainstream products.

Why not a mainstream product that has mass demand? Although the mainstream product is tempting, it has a number of disadvantages:

* Competition will beat you to your knees if your product is not novel in some respect. In fact, you are not an entrepreneur if you select a me-too product.

* Mainstream channels don’t trust the reliability of small or startup companies. Too many of them go belly up, or fail to deliver on time, etc.

* Your ability to produce and ship on time will be paralyzed by large orders, especially when two or more large orders must be shipped at about the same time.

* Catalog type marketers, which are one of a startup’s best marketing channels, are not receptive to products that are already on the shelves of brick-and-glass retail stores.

* Startups typically don’t have the capital to buy or lease the appropriate machinery and tooling with which their competitors produce. Nor do they have the cash to purchase large quantities that gain low prices. Therefore, their product costs are too high.

* Pricing and discounts demanded by the mass distribution network are not well understood by the startup entrepreneur.

The niche product, on the other hand, has advantages that mainstream products don’t have:

* You can create demand using your website alone.

* Catalog type marketers are receptive.

* Your marketing channels are more forgiving of glitches than are the high-volume channels.

* Your product’s news value gains it free publicity.

* Your advertising media are generally more focused.

* Affiliate marketers are receptive.

* Social media may be receptive to promoting it.

* Crowdfunding may help you finance your startup and promotion.

* If you invent your product, your personal stake in it gains you extraordinary satisfaction in producing and marketing it.

We have four main possibilities for obtaining our niche product:

1. Finding it among existing products;

2. Modifying an existing product;

3. Inventing a new product; and

4. Finding a patented product that producers have ignored or shunned.

1. Finding it among existing products;

Here are six main places to discover niche products among existing products.

* Searching catalogs, websites, and the Internet at large.

* Attending angel/entrepreneur fairs.

* Attending trade shows and inventor expositions.

* Searching retail stores.

* Creating a network of problem scouts.

* Contacting local manufacturers.

Searching catalogs, websites, and the Internet at large. If your product selection can't be sold through catalogs or on the Internet, it almost certainly can’t be sold through retail stores as well. Catalogs and the Internet enable us to determine if a product category exists (books, tools, sporting goods, etc.) Thus, your immediate search step is not to settle on a product that appeals to you, but to assure yourself that a marketing channel and category will be found for that product.

The point here is that a lack of category means that your product is an orphan, and reaching your buyers probably will be costly and difficult relative to a product that has an identifiable category. Once you’re assured that a category exists, proceed to refine the search for your niche product.

Grey House’s Directory of Mail Order Catalogs is the only substantial printed directory at this time. But the fate of directories of all kinds is precarious. Many great directories, such as the famous Thomas Register of American Manufacturers, have bitten the dust in their print-on-paper form. (Thomas is now found on the Internet at www.thomasnet.com.) But if you can find a copy of the Directory of Mail Order Catalogs, either used or new, it is a treasure. It lists about 12,000 catalogs, separated into 44 categories. If you don't find an appropriate category for your tentative product in the Directory, you will probably find difficulty in marketing it. The Directory costs around $250, but used copies are available on Amazon.com, etc. A copy that’s two or three years old is still valuable as a complement to searches on the Internet.

Other sources for finding catalogs are:

* flipseek.com

* catalogs.com

* cybercatalogs.com

* cataloglink.com

* overseas producers. See, for example, alibaba.com

This same approach can be used at Amazon.com. Does it offer a category?

The Internet also provides hundreds of websites of inventors who are either offering their invention for licensing, or are producing it on a small scale, and may be receptive to a buyout or a marketing partnership. In the sixteen years that I’ve been mentoring inventors and startup entrepreneurs, I’ve never heard of even one inventor licensing his or her invention merely by setting up a website, and displaying it, without some cooperative means of driving potential licensees to it. Businesses that are receptive to new product proposals simply don’t search for them on the Internet. The odds of a company finding a product that matches its product lines is remote, and usually a waste of their time.

However, for the startup entrepreneur who has no preconceived definition of the product he or she will consider, there may be some value in such a search. Key in inventor websites. In a sense, these places are catalogs for inventions. A few are well managed, and take an active role in finding potential licensees. Others are passive, and ineffective. One of the best active sites is Paul Niemann’s Market Launchers. Key in www.marketlaunchers.com/licensingdeals.html. Paul offers a display of products that he has helped inventor to launch. Contact him for products that are seeking licensees at 636-477-8000.

What about alibaba.com and other overseas sites? A few years ago I altered a manual can opener for a friend who had arthritis of her wrists. She hated electric openers, but couldn’t use the traditional manual openers. I added a longer crank type handle, and she was thrilled at being able to open cans on her own once again. My thoughts turned to producing my design, admittedly a niche item. But I thought it would sell well in catalogs that were specialized for persons having physical limitations. Then, it occurred to me to search alibaba.com, where I found an almost exact duplicate of my invention.

My point is that niche items that we don’t find in our stores, or even on line, may be available from overseas sources. There’s a minor culture in America that longs for simplicity—for living off the grid, and using simpler, utilitarian, un-motorized devices. Some call it steampunk, (from the steam-power era), which is not an exact fit. But there may be hundreds of such devices that have been used in third-world countries for years—devices that we have shunned as too primitive for the mass market, but which would appeal to the steampunkers and the off-the-grid culture.

Attending angel/entrepreneur fairs. These fairs are usually sponsored by angels, and attract entrepreneurs who are seeking finance for their ventures. They are found on the Internet by keying in angel entrepreneur fairs on your search engine. At these fairs you'll meet entrepreneurs and inventors who have products and inventions that they are trying to launch. Since most don't connect with an angel, the opportunity to find an available product, or even a business partner, is quite possible.

Attending trade shows. Some trade shows—for example, the National Hardware Show, and the National Housewares Show—have a section for inventors who are trying to license or sell their inventions outright.