The first time I started a company, the co-founder and I had some very good reasons for starting it:
We wanted to be our own bosses! We…well, that was about it.
That was way back in 1999. Thirteen years later, that company we originally started was acquired. Not your average startup incubation period, but not a lifetime either. Looking back, I can humbly say that at least 2 of those 13 years were because we had incorrect reason for incorporating in the first place. You see, starting your own business is great; however, before doing so, you must know why you’re doing what you’re doing, and there really is only one answer. We’ll get to that.
In the medicinal world, there are two kinds of pills. Yes, I know there are more, but I’m making – or borrowing – an analogy here, so bear with me. There are 2 kinds of pills: vitamins & pain killers. Both have unique and valuable purposes. Vitamins are good for you. They give you the elements of a healthy diet that you may not already be getting or that your body, for one reason or another, doesn’t produce enough of. That’s good. Vitamins are good. But, you don’t always need vitamins, and vitamins may be the first thing to get cut when income is down.
A good example, in my mind anyway, of a “vitamin” business would be Air Jordan basketball shoes. Nobody needs a $250 pair of Air Jordans. I bought a pair back in 1990, the old “Grape” color scheme. Man, I loved those shoes. My folks had given me, among other things, $100 for Christmas, so I blew all of it and then some on those Air Jordans. I didn’t need them. Nobody needs Air Jordans! But they sure do make you feel good, don’t they? Yeah, they do. Yeah…
For the painkiller explanation, I’ll refer to the father of a friend of mine. Fraternity brother to be exact. His dad is a retired urologist. Having just been through bladder cancer last fall, I can tell you that my urologist knows me better than anyone else in my life except for my Maker. Anyway, when folks asked this doctor why he chose urology of all medical professions, he had a simple answer that applies to the startup world today. He said the following.
If I am an orthopedist, maybe you come to me when you hurt your arm. If I am a dermatologist, maybe you come to me if you think you have skin cancer. If I am a GP, maybe you come to me when you are sick. But if you have problem in your groin, I am first person you call and you don’t wait.
Smart man. Now do you get it? When you start a business, ask yourself, “What customer pain am I solving? Is it painful enough that they will pay me for my product/service over and over and over?” If not, you may want to think of something else…like urology.
I am in the process of starting deductmor. I found a painful area for self employed individuals, who get at least one 1099 every year, and are responsible for their own payroll and income taxes. That pain is keeping up with receipts all year long, and then organizing them into something their tax accountant can deal with. It’s also painful for the tax accountant whose client throws a bucket of year old receipts at him every March. That’s the pain we’re addressing at deductmor. Follow our startup journey @deductmor or join our public beta, which will start in late spring 2013.