“The product that will not sell without advertising will not sell profitably with advertising.” – Albert Lasker
Most would-be entrepreneurs are motivated by an idea – an idea for some great new product.
I get all sorts of questions from such people, but I almost never hear the most important one – the one you should always ask when you get an idea for a great new product: Is this the kind of product that I can actually sell? And if so, how should I do it?
Coming up with product ideas is not the hard part of entrepreneurship. Figuring out how to sell those products profitably – that’s where the genius comes in.
Take Mike Henry, for example, who wrote me recently with a question about a product he’d like to sell. Mike has an idea for a soup recipe. He calls it “Esther’s Health Soup” after his beloved late mother, who “concocted a delicious, chicken-based vegetable soup” just for Mike’s late father, who never ate vegetables.
“Both parents are gone now,” wrote Mike, “and I have a strong desire to immortalize them with this soup.”
Mike doesn’t know what to do next. He talked to someone at SCORE (an organization that offers free advice to entrepreneurs), and was told that his soup would take years (and lots of money) to gain FDA approval. So he has come up with some ideas about how to market his soup himself and wants to know whether they are good avenues to pursue.
“I’m a musician,” says Mike. “I play at restaurants, catering halls, and country clubs. I am especially friendly with one caterer in my neighborhood. Would that be a good outlet? Should I approach a major company and sell my formula to them?” Mike also wonders whether he should try to contact the original owner of Whole Foods Market, a man who was a family friend.
What can I say? Mike seems like a nice man. He’s endowed with an active imagination. He makes his living as a member of a band and, when the music stops, dreams of selling recipes and inventing things.
He also loves his parents and wants to immortalize them by converting a vegetable soup his mother made into a product. After reading a few books, he is puzzled about what to do. So he takes the initiative to speak to someone at SCORE – presumably a retired executive – and he gets lectured on how difficult his idea will be to execute.
I love this anecdote about SCORE, because I have always had mixed feelings about that organization. I am sure many SCORE volunteers are formerly successful businesspeople (with a smattering of blowhards and ne’er-do-wells in the mix), but there is a fundamental problem with getting your advice from people who have been out of their industry for two or three years: They lose touch with the market. Add to that hardening arteries and aching joints, and you have a non-profit organization filled with grouchy old naysayers.
Mike deserves better than he got at SCORE, simply because it would be nice to imagine Esther’s Health Soup sitting on a supermarket shelf some day. But his ignorance of business is so profound, I can’t think of what to tell him. Right now, Mike doesn’t have any business goals. His goals are purely sentimental. And a sweet dream to honor his parents just isn’t the same as having a workable business idea.
Mike’s greatest resource is the connection with the original owner of Whole Foods Market, but this guy is likely to be long ago retired and working part-time as a counselor at SCORE, discouraging young people from doing what he did.
Mike’s best bet is to start selling the soup at a local flea market or giving it away on street corners. No doubt he would be violating various public health laws in doing so, but if he sells it while it’s fresh, he probably won’t get hauled off to prison. He could also look into getting a booth at a local weekend greenmarket that features produce but also has stands that sell all kinds of other stuff, including prepared food. Or he could approach a take-out place that features dozens of kinds of soup on their menu (they’re springing up all over lately, perhaps modeled after Seinfeld’s Soup Nazi) and see if they’ll take his “on spec.”
The point is, before Mike makes an investment in marketing his product, he needs to find out for sure if it’s really as good as he thinks – and by “good,” I mean sellable. He won’t find that out by serving it to his friends. What are they going to say? (“Mike, I never wanted to say this when she was living, but your mom was a lousy cook.”)
There is only one way to find out if your product is good, and that is to start selling it. The sooner you start selling it, the faster you will know. Most products, it turns out, are not as good as the inventor (or her son) thinks they are.
If Esther’s Health Soup starts selling like hotcakes, Mike should write back to us… and then we’ll tell him what to do next.[Ed. Note: Mark Morgan Ford was the creator of Early To Rise. In 2011, Mark retired from ETR and now writes the Palm Beach Letter. His advice, in our opinion, continues to get better and better with every essay, particularly in the controversial ones we have shared today. We encourage you to read everything you can that has been written by Mark.]