I am in the process of considering the launch of the new business adventure and this question has me on the fence.
The new business that I’m considering is a media business, with a similar idea to a media business that I launched in 2003 and pulled the plug on in 2005.
I need to answer some of the questions about why that business failed before I can consider launching another business in a similar industry.
And I think I just found the answer.
Yesterday, while looking through a few of my favorite business books I found this quote in the book “Will and Vision: How Latecomers Grow to Dominate Markets”, page 130-133;
“How long to persist? At this point, an entrepreneur or manager may ask a highly pertinent question. How long should one persist in an effort? … There is no simple, general answer that serves for all times and places. The right answer depends on good judgment in a particular situation. “
“Discussions with managers suggest that they are frequency under pressure to show early results for new products, typically in the form of an early product takeoff. However radical new products take an average of 5 to 6 years to take off after market introduction”
I hate to admit it, but the primary reason my media business failed in 2005 was perhaps because I prematurely pulled the plug after only two years. Off course, I had too because I ran out of time and money.
That said I cannot make the same mistake again and follow a business plan that expects a similar business to takeoff in anything less than five years. At the same time, five years is too long to wait for an investment to show signs of a return.
Therefore, the trick is to come up with an idea to launch the business – with an understanding that a new business will take at least five years to take off and yet that five years is too long to remain patience while continue investing both time and money.
Here is my idea.
If I were to launch a new media business similar to the one that failed in 2005, I could create a two phased plan.
- A two year plan focused on branding and marketing with minimum investment and a lower quality product – before I truly launch the product.
- Followed by an aggressive three year plan to increase investments and the quality of the products and services.
The combination of the two year plan and the three year plan puts me in the five years range, while reducing the risk of running out of time and money before the product takes off.
The results should produce a successful new business launch.
The risk in this strategy is that the initial perception of the product by the market as a low quality product becomes very difficult to change in the minds of the consumers and causes the product take off to never happen.
I think I can mitigate this risk by showing a continuous improvement in quality and prices, rather than a jump in quality improvements with the expectation that the market will suddenly be ready to paid higher prices.
This approach of continuous improvements should lift the initial perception of quality to gradually increase over the five year product launch.
I really don’t want to wait five years to get a new business started, but I have to consider my experience as the most credible evidence that that is how long it takes. And if I want to have a successful business running five years from now, I have to start as soon as possible.