Monday, April 28, 2008

Field of Dreams

"If you build it, they will come" works well for big business. Big business is not nimble enough to start small and adjust quickly. Plus, they already have a large following of loyal customers... hence, the reason why they are a big business. So, unless it's a major screw-up of a product, a large company can crank out anything new and almost be guaranteed to at least cover expenses and create a positive ROI.

Small business, however, should do the opposite: conceive it, create basic marketing materials, sell it, and THEN scramble to build it and tweak it to perfection. Example: A former technology executive, now small mobile business CEO, spends $5000 on a Gartner Research report on the growth predictions for the segment. He spends tens of thousands of dollars attending trade shows to learn more about the industry leaders. Most amazingly, he recruits a rising star from GE to head up the technical side of the business... even to the point of giving this guy 25% of the company stock.

I'm sure you can guess the rest. Sales never happened. The industry grew at 10% annually, not the 125% predicted. Not only was all this money spent on non-productive (i.e. non-bottom line enhancing) items, but I have a strong suspicion that it helped the CEO lose himself in the "busy-ness" of his business, rather than taking a hard look at reality.

Being well-prepared is important, but just remember my favorite quote from Tom Peters, "Ready, Fire, Aim."

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