Archive for the ‘Starting a Business’ Category

Start Up Lesson #2- Know What You Don’t Know

Tuesday, March 2nd, 2010

In assessing the opportunity for providing recruiting services for the RE/PdM industry we learned that there were many potential micro-niches out there. Our insights into the industry made us realize that certain technical industries had an imbalance between the supply and demand for talented people. To be successful in delivering recruiting services, we quickly recognized that we needed to know who the talented people are and how to engage them. The best way to do this was to have the people come to you. Easier said than done!

In assessing how to do this, we came to understand the problems in the job board industry and the power of online communities, particularly when you are dealing with micro-niches. Hence, the concept of nextupcareers.com as a destination rather than a service was born. NextUp is designed to be a career site and job board that promoted community and knowledge sharing rather than focusing on the purely transactional functions of a job board.

When we began to determine the feasibility of creating a site of this type we immediately recognized that we didn’t know a whole hell of a lot about building websites and web-based applications. We know lots of people in the web building space, but we knew that even if we could articulate what we wanted and build a requirements document, we wouldn’t be capable of managing the process and ensuring we were doing the right things and making the best decisions.

As we came to the conclusion that we really didn’t have a clue about building what we wanted to build, we could have made two choices. We could have tried to educate ourselves or we could embrace the reality that we didn’t know and hire someone smarter than us to figure it out and manage the process for us. Both options have considerable risk to them and both are going to have a trial and error learning process.

This was a very critical decision for us, as much of the investment we were going to make was going to be into this site. As a bootstrap start up, our funds are limited; it would have been easy to try to figure it out on our own. Fortunately, we decided on option #2; we were better off finding someone who can help us learn what we didn’t know.

As some of the other lessons learned will demonstrate, this was a critical decision for us and ultimately a smart decision although there were some expensive mistakes made going this way as well. However, by and large we found that by understanding and appreciating what we didn’t know, we were able to minimize some potentially sizable mistakes.

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Start Up Lesson #1: Look Beyond Yourself

Wednesday, February 24th, 2010

As noted in my previous post, our initial start up objective for NextUp was relatively simple. We wanted to build a company that could deliver recruiting services to the Reliability Engineering & Predictive Maintenance industry. We have lots of experience providing services to companies in the space so we understood the needs of both the professionals and the companies that hire them. It was natural for us to pursue this market.

Because of that background we knew that the industry had a supply/demand problem when it came to talent management. RE/PdM professionals are very technically skilled and they have a unique experience/skill set so its not a labor force that can be quickly scaled. The industry is growing rapidly, resulting in a situation where the demand was far outpacing the supply of talented people.

This is not a small industry but it was clear that this was a very neglected market. In doing our market research, we were not surprised to find that there were very few recruiters who specialized in finding these professionals. The depth of the neglect was surprising because there are so many firms and websites dedicated to the engineering and maintenance profession. That was then it occurred to us that we had likely found something truly difficult to find these days – an uncontested market. What made it so, and therefore made the industry unique is that is a niche within a niche, or what we have come to call a “micro niche”.

Once we came to understand the micro-niche, we quickly realized that there were hundreds, if not thousands of these to take advantage of. We also learned if we could build a defined profile of a desirable micro-niche and a delivery model that could be quickly replicated and mass customized we would be able to deliver services to any micro-niche we wanted.

Building a business model that is going to be replicated and scaled requires a different approach than one that is a single instance. By assessing the market and stepping back to look at the big picture, we quickly realized we had an opportunity that was far larger than what we envisioned. Whether or not we end up pursuing other micro-niches, it was clear to us that we needed to build our model to allow for the possibility.

Looking beyond ourselves, allowed us to think critically and ultimately create a business model that we believe will be much more successful.

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Bad Business Ideas – Recession Edition

Friday, February 13th, 2009
It is a commonly held belief that the best time to start a business is when economic conditions are at their worst. If you can survive in a recession/depression, the thinking goes, then it should be real easy to thrive when times are good. BNET has a quick post with links on the topic from Business Week, USA Today and Industry Standard. I’m inclined to believe that this is the best time to start a business and am actively looking at opportunities myself. Down times allow you to be creative and generally allow you to think a little unconventionally about an opportunity or how you bring your product/service to market.

With that being said, there are just some ideas and business oppotunities that get developed that are just bad, regardless of the economic climate. In recent days, I’ve come across two that leave me scratching my head about the decision making process that some companies go through when launching a new initiative.

The first was Starbucks recent decision to launch a value breakfast meals. On the surface, it makes sense in these times of near empty wallets to provide the illusion of value. Unfortunately, Starbucks has failed on delivering a value proposition with this move because its: 1) unoriginal; and 2) unappealing. How appealing does a tall (re: small) latte and a reduced fat piece of coffee cake or a tall coffee and a “breakfast sandwich” for $3.95 sound to you? They missed a golden chance to roll out a new product line of either healthy foods or really decadent baked goods – hello doughnut & coffee! Secondly, there is no messaging attached to the roll out so this looks like another half baked attempt to respond to negative perception of Starbucks and value. Instead of attacking the issue head on, this move reinforces the perception that Starbucks is overpriced. A plea to Starbucks management – look at how McDonald’s reinvented themselves before you do anymore damage to your brand.

The other head scratching business idea that surfaced recently was Microsoft’s decision to open retail stores. Details on the specifics of the stores are not available yet, but Microsoft did hire a 25 year Wal-Mart veteran to lead this initiative. Talk about playing right into the Apple television commercial stereotypes! Its hard to tear apart the concept without knowing the specifics, but with the exception of Apple, when has a manufacturer been truly successful with a direct retail model? Secondly, from a perception standpoint, we are talking about Microsoft products and a Wal-Mart retail mind a the helm – does anything about that combination say “positive customer experience”?

I’m sure I’ll be touching on these two concepts later on as more information becomes available and they roll out. In the meantime, if you know of any bad business ideas that have recently surfaced, let me know.

Posted in BNET, Business Week, Industry Standard, Microsoft, Recession, Starbucks, Starting a Business, USA Today | No Comments »