Your product is not your business

by Ashvini on November 22, 2012 · 19 comments

in Business

It is often that one meets people who want to start an online business. Most of them are worried about the technical aspect such as what software to use, which payment gateway to integrate with and many others.

E-business is a very challenging  like any other business.

It is very rare that a idea gets an acceptance into the market readily. Often the market is not ready for such a product and the idea dies a premature death. Be it any business , an entrepreneur assumes that great idea will itself lead to success. However there are things that one needs to take into account besides the product they are trying to sell.

A business needs to answer basic questions such as

Who is the customer?

Why will the customer buy from you?

How will the cash be managed?

Where will the cash come from ? ( Self funding/loans/venture capital)

Where the will product be manufactured?

How will raw material will be sourced?

How will business advertise the product?

How will it hire people ?

What are the local taxation laws?

What are laws of other region? ( If you were shipping to them)

What is the service guarantee ?

What is the refund policy?

and many others….

As you can see, in trying to answer this in-exhaustive list that the product is only one of the factors to make a business successful. Business means making money. An idea/product may or may not make money unless packaged and planned well. An entrepreneur is the entity that converts idea into business. For that he or she needs to know both sides of the whole idea-business concept.

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{ 19 comments }

Sandra December 5, 2012 at 5:39 pm

Interesting point of view. But I think your business will always be represented by your product. If your product is faulty your business will be faulty too. It’s all a matter of balance.

Calra December 5, 2012 at 12:30 pm

E-Business is a nice concept .People Should remember these important question while getting in to e-business.Thanks for the post.

Ashvini Kumar Saxena December 5, 2012 at 1:54 pm

You are welcome Calra :)

Kelly December 5, 2012 at 12:18 pm

Working for a solutions provider has given me light on this issue. Yes, not everyone will be able to appreciate your product and what it stands for but contrary to the title, if your product is not your business then what is?

Ashvini Kumar Saxena December 5, 2012 at 1:59 pm

Hi Kelly,
Ofcourse the product is central to the idea of business because your business is built around the product. But having just a product is not going to create a successful business. A person who has a terrific idea must also know , how to package and sell it to the market. Later on he or she needs to set up processes for servicing , supporting or repairing it. Business is far bigger than the product even though the central theme is based on the product. I hope I was able to explain the concept.

Stacey December 3, 2012 at 9:14 pm

Speaking from a personal perspective, not all hair-brained schemes turn out to be a good business venture. Unlike what we hear in stories and other documentaries a good business doesn’t happen overnight. It needs careful planning and understanding of the market. Thank you for sharing these questions with us. It’s definitely what an aspiring entrepreneur needs.

Ashvini Kumar Saxena December 5, 2012 at 2:12 pm

Hi Stacey,
Yes good planning ensures that product is accepted well in the market. You are most welcome and thanks for your comment.

Kristine December 2, 2012 at 11:21 pm

A well thought of strategy is what every business owner needs to implement. I sure hope I came across your post before I started my business online, these are practical and straightforward points that most of us did not even bother to ask earlier on. Thanks for the share!

Ashvini Kumar Saxena December 5, 2012 at 2:14 pm

You are most welcome Kristine. Glad that you liked the post :)

Emilia December 2, 2012 at 5:19 pm

I couldn’t agree with you more–these are actually some of the more pressing concerns that we need to address before coming up with a feasibility study or making any investment. We must all learn to look at the bigger picture in order for us to be able to define and decipher the amount of success we have attained.

Joy November 30, 2012 at 1:49 pm

I’m an accountant and when it comes to any kind of business, we like to see the numbers first. Will it be profitable? Will it be feasible? When can you recoup the investment? But then, I have to admit that even when I am aware of these things, I also had my share of failures in business. After many, many years, I realized that to succeed in any venture, it’s not enough that you know how to compute and do the numbers. It is a combination of many factors; and it is not just the skills and technical knowledge, but the right mindset and attitude as well. You need to have an open mind and the willingness to learn new things. You should also accept that, from time to time, you need to alter the original plans to adopt processes and techniques that would work better.

Ashvini Kumar Saxena December 5, 2012 at 2:18 pm

Hi Joy,

Very well put. We all had our shares of failures and it is just natural to fail. Willingness to learn as you said is one of the key ingredient to success. Flexibility is a plus.

Veronica November 30, 2012 at 1:48 pm

Online business is certainly not an easy thing. These are very important questions that ever businessman should ponder upon.Having an idea is not the only thing that is required. Thanks for this great share, Ashvini.

Ashvini Kumar Saxena December 5, 2012 at 2:19 pm

Thanks Veronica :)

Cristian Balau November 27, 2012 at 2:16 am

I personally discovered that you need to be ready for every possible aspect before you go ahead investing time and money into a certain product or online business.
For example my main profit comes from online services, as Sonia mentioned above, fads come and go but its also very important to start those fads or be a player right from the start until it dies off.
I had a couple of runs with services that only lasted in popularity for a couple of months, then died off, but in this time made a good deal of money and moved on to the next thing as well as offering and developing stable services that won’t die any time soon, like web designing for example.

Ashvini Kumar Saxena November 28, 2012 at 3:42 pm

Hi Christian,

One can build a build a business by being on the top of the trends. I however do not possess that skill ( need to learn). There are times when such trends are peaking and people make a lot of money out of them.
Thanks for letting us know about this.

Sonia November 26, 2012 at 8:02 pm

I have tried many businesses over the course of 15 years and either I found minimal success or no success at all. First off, I didn’t take into consideration who my customer was or even if the product I wanted to push was in demand. Someone once told me,” that you want to sell products that people need, not what they want”. Wants tend to die off like fads when everyone has one, while “needs” last forever and people purchase the product over and over again(like Shampoo). Maybe I just haven’t found the right product for me that I feel I could put my stamp on that will resonate with people.

I remember when the Ebay craze came about and how everyone and their mother (myself included) jumped in that fad. Those that were already successful wasn’t giving up the good of how they got there, while others simply tried to rip off unsuspecting would-be entrepreneurs with scam drop ship businesses. Ebay still does well and people still make money, but the ones that are successful figured out a way to stay relevant and keep up with the times when popularity with their product dies off.

A year ago I watched a program about people that made it big with their own inventions and a very famous advertising executive said, “if you ever hear yourself saying, there has got to be a better way”, that is an invention you need to create. Easier said than done, but his statement was true. The only question left is, “how far are we willing to go to make it happen?”

Ashvini Kumar Saxena November 28, 2012 at 3:48 pm

Hi Sonia,

This is true for every entrepreneur and it is indeed very hard to be successful. Your 15 years journey tells that entrepreneurs often have large number of failures compared to successes.
The “need” thing definitely sells but then it is sold by almost everyone . The competition is high and wherever the competition is high often margin gets lower. Coupled with large marketing budgets needed to advertise the things, they go down further. While “want” products have more margins upon selling, they have a problem with getting acceptability from the customers. Still I feel “want” products fetch better returns than need products.
My idea to a product development is to take a successful product and to either “better it” or “simplify it”.

Adrienne November 23, 2012 at 10:06 pm

You are so right Ashvini and I know that people always tell us that just because you have an “idea” for a product that doesn’t mean that everyone is going to love it. You have to do that research to see what people want before jumping in.

I was not that smart when I started because I took the road most people do which is thinking of some cool product that I wanted to promote and then going from there. Definitely not the smartest move and they need to seriously consider all that you’ve mentioned above. I wish I had been that smart when I started.

Thank you for pointing this out to us Ashvini because I’m sure there are plenty of other people just like me who do it all wrong.

Enjoy your weekend now.

~Adrienne

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