Failing Fast

posted in: Blog | 0

My friend, entrepreneur Marc Kramer has started about 20 businesses.  Some have succeeded, others have not.  Among his start-ups,  I asked himScreen Shot 2015-12-21 at 9.00.45 AM if he got signals early on the he had a clunker on his hands, and if so, what the signs were.

Generally, he said, he knew within about 120 days whether or not the concept is going to fly.  Here are some of the sign posts he saw along the way that informed his thinking.

Little word of mouth.  Kramer says word of mouth is the ultimate acid test.  “If consumers are using your product, and are not excited enough and satisfied enough to tell friends, family and colleagues about it, your product or service is unlikely to succeed.”

Disconnect.  If customers or would be customers are having a hard time using or explaining your product or service, it’s a bad sign, Kramer says.  “If you are offering a critical product or service, customers who don’t understand it will find a substitute they do understand. If your product or service is new, but not critical, most customers won’t put in the time to understand the benefits.”

Buzz lite.  Some products or services are launched to great fanfare with lots of play by influencers and the press.  But Kramer says if this attention does not translate into sales, or at least inquiries, it’s a bad sign.

The 120 day evaluation period is not firm of course.  And he says, investors are often a bit more patient than he has been typically.  Still it’s a metric worth keeping in mind.  While failure is part of success, failing fast will get you to success more quickly.