Why Most Entrepreneurs Fail
Before we jump into the product, before we start researching, we need to think about ourselves a little bit and you'll see why. So why do most entrepreneurs fail? In addition to not having the right product market fit. I'm gonna tell you another story about a juice company. So you may have heard of it. It was called Juicero. I know juice is really popular right now, but I think this was maybe four or five years ago. So a company called Juicero. And they raised $120 million from companies, including Google Ventures, so anytime Google does something like that, you think, oh wow, this is a great idea. And what was the company about? Well, the deal was it was kinda like an espresso for juicing, so you would have these little packets, the company would source the best fruit and all this stuff, cut it up nicely into these packets, and then you, the juice machine owner, put these packets into the machine, which cost $700, I don't even know how much the packets cost, and then it gives you this...
juice. But it's not any juice, it's maybe cold-pressed, or I don't know all the fancy terminology, but there are good juicers, and there's the really organic, healthy people juicers. This was that. But there was a little problem. Some reporters got a hand on these juice machines and they started testing them out, and they quickly realized that you didn't need the machine. You could literally take these packets and squeeze 'em into the thing on your own, and you didn't need this $700 machine. And that's a big problem, because they actually started to discount the price of the machine. I think it went down maybe to the 400s. Don't quote me on that, but if you Google this you'll find this great video where these reporters are just squeezing these things, and then on the other side of the screen, the machine's going and the hand juicing is finished before the machine. How the heck could this happen? How did they end up raising $120 million from places including Google? Well, I wanted to figure this out and dig a little bit. The researcher in me wanted to know what the heck is the backstory here. So this guy, it all started with this guy David, who had this idea for creating these juice shops called Organic Avenue, and David was a really organic guy, kind of to the extreme, you know those people in your life, so he wanted to create this eatery comparative with his own dietary regime. And so, they developed Organic Avenue, which were these juice shops. And Organic Avenue was in New York City. It eventually closed. They were really expensive juices, obviously, and then in a follow-up interview, David, same guy, the quote was this. "Upon being fired, Mr. Evans said, he had." Oh sorry, David's the author of the article. Anyway, Mr. Evans is the juice man. So, "Upon being fired, Mr. Evans," juice shop owner, "said he had a problem." And he said, "For me, I was just wondering: "How am I going to get my juice "now that my juice shops failed?" And that was the genesis of the juice machine, thought if he couldn't walk down to the street to his juice shop, he'll just make a machine. And that's how that whole idea came about. But the problem was, a lot of it was based on his idea or his problems. He no longer had the juice shop. He had this dietary regime, so he thought, I'll just make juicers because there must be lots of other people like me who will pay for these machines. And it was all based on his needs and that's when you run into problems. So common mistakes that I think he made, I never met him but just through anecdotes of many people I've worked with, here's some of the mistakes I see. So, made too many assumptions. Definite check mark there. Kept his idea under wraps for too long. I don't know if he did that, but a lot of times, people come to me and say, "I have this idea," and it's not always like an app or a website, sometimes it's like a physical product or something, but people say, "We're in stealth mode, "we can't tell anyone." And that's a dangerous sign to me because I think if you're trying to keep a secret, then you're probably not getting feedback. Another mistake, failing to do research early and often, that often part should be emphasized because I think a lot of entrepreneurs will do research once or twice and then tick that box off and not do it anymore. And so, you're going to see how it's important to get into a real habit of research. And finally, I think a lot of entrepreneurs just rely too much on personal opinion, the juice guy, the travel box organizer woman, the sports man, all relied too much on what they thought they needed. And I would caveat and say, sometimes you do have a real problem in your life that you do need a solution for. And it might be a great idea. But you still need to go and consult with other people. If I had an idea for something related to running, I run a lot, I am the user, but I should probably consult with my running friends because I'm too caught up with it in my own head. So, most entrepreneurs fail because they didn't offer the right people the right product, it's pretty simple. There are many other factors that go into it, but that would be a big, big point I would put on a Post-It note in my office. And validating our ideas helps us prevent us from going down the wrong path too quickly, spending too much time, spending too much money, and all the side effects that come from that, taking time away from your kids, foregoing all those different things that pop up in life because you think, I'm just going to work on my business. Well, are you just working, or are you working smartly on your business? And I think failure to validate your idea, if you skip this step, it's 99% chance that you probably won't be around because you didn't validate. You have no foundation on which you can move forward, and it's really a lot of assumption.