Rob Adams was the key note speaker recently at the Tennessee Innovation and Venture Showcase in Nashville. As registrants for this event, we were given copies of his new book, "If You Build It Will They Come?" My schedule required me to be away but my colleagues all came back quoting Rob's presentation. Here are some of the thoughts that found their way to me:
- Spend two months on a deep dive into the market BEFORE you build the product
- Talk to 100 people during this market deep dive
- If 30 [customers] give you the same specification, then you have enough to build it
- Don't be afraid to disclose your idea. He [Adams] has never seen anyone steal an idea from a small business concept
- People [investors]don't fund science
- 90% of new company starts fail
- 65% of new product ideas fail
- There is over $260 billion spent on failed companies and products. Only $160 billion spent on successful companies and products
- Most companies fail due to an inability to scale
- If you have enough time to build it and do it over after it fails, you have enough time to ask your customers if the solution you are considering solves their problem
I didn't hear the speech but I did read the book. One thing I really like about the way Rob writes his books is that he tends to be matter of fact if not blunt about the most important points. His books are part inspiration and part field manual. In his first book, "A Good Hard Kick in the Ass," Chapter 2 was dedicated to understanding customer value. In my copy, that chapter has more yellow highlighted sections than not. Understanding what customers value (and pay for) has become a foundational part of the educational message of the Center for Entrepreneurial Growth.
"If You Build It, Will They Come?" is a deep dive into this concept. Rob states that "Most companies take a ready, fire, fire, fire, aim approach to delivering their products or services." As you might expect, he advises taking a ready, aim, fire approach and in fact, that is the way his book is laid out. "If You Build It..." comes as close to an instruction manual as you will find and Rob even presents an outline for the timing and cost of this effort. You should plan on spending 10% of your development budget and allocate 60 days to accomplish a Market Validation effort. The rest of the book tells you how to do it.
In the Ready section, he tackles high level market research as a test to see if your idea is worth pursuing. Topics include how to evaluate market segments, market adoption life cycles, macro economic factors and competitive analysis. The Aim section gets to the heart of the matter with an extensive tutorial on primary market research... actually talking to your customers. He illustrates the proper balance between qualitative information and quantifiable data you can use to make strategic decisions.
The Fire section points out that most technology based startups fail to allocate sufficient funding for sales and marketing. Again, in true Rob Adams style, the answer is simple and direct; budget the equivalent of your R&D budget to sales and marketing in the first year. The market validation activity continues in this stage because nothing provides customer feedback like their use of your first product. At this point the development process must be nimble and responsive. Rob reiterates a concept from "A Good Hard Kick..." and that is: not delivering the perfect product. Rather, deliver a product quickly with minimally acceptable features, get customer feedback and interate your pathway to the perfect product.
"If You Build It..." is packed with ideas but delivers them in a concise package and a quick read...but you won't read it once and put it on the shelf. This is stuff you can use today.