Alicia Sisk Morris CPA | If you build it they will come… or will they?
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If you build it they will come… or will they?

18 Jan If you build it they will come… or will they?

Hasn’t everyone seen a blockbuster movie or saw a TV interview highlighting an ultra-rich entrepreneur who along with their super smart college friends, came up with a radical and cool new idea. They took that idea and they built a multimillion (or billion) dollar company out of their dorm room. Companies like Dell Computers. Microsoft and Facebook come to mind pretty quickly to me. The underlying assumption is that anybody with a great new idea who puts some hard work into building a business will automatically be successful. The boring and mundane stuff of their day to day operations and procedures really don’t matter. Or do they??? It is easy to blame the failure of the business on the fact that the idea was not good enough or market ready. But what if the idea was good, but it was those pesky details that really sank the ship? According to Eric Ries in his book The Lean Startup, he states that “Startup success can be engineered by following the right process, which means it can be learned, which means it can be taught.”

Steve Blank, an investor and adviser to IMVU (a Silicon Valley computer software company) spreads the idea that “business and marketing functions of a startup should be considered as important as the engineering and product development and therefore deserve an equally rigorous methodology to guide them.” His advice helped Eric Ries , co-founder of IMVU, develop his Lean Startup Method. I wonder how many products have been designed, built and sat on store shelves unsold. Dream products getting covered in dust only to be recalled or thrown away. I am sure there are more dust covered products than there are top sellers.

As a young girl in my elementary school days, I learned this lesson selling Girl Scout cookies.   Every few years the Girl Scout organization would come out with a new cookie. They were looking for the next “Thin Mint” big hit. That new block buster cookie that no-one can resist. I do not know what type of product testing or what their evaluation process was but even I knew that most new cookies were duds. Who wanted to pay $1.25 (this is 1970’s prices) for a new cookie when they could get their beloved Thin Mints? This was a once in a year treat. What are you going to do? I know our family, over the 30 plus years, has continued to purchase our tried and true favorite Thin Mint and we are not alone. As my daughter now sells these beloved cookies, you see the customers walking up to a cookie booth and they already know what they will buy. It is a rare person who tries the new cookies. Of the 8 varieties currently being sold, Thin Mint represents a full 25% of cookies sold by Girl Scouts. And cookies like Mango Cremes are canceled after just one year with an excess of back stock left unsold. I think if Girl Scouts had spent more time doing taste testing and market research they would not have issued the Mango Cremes or any of the other  40 plus different varieties that were ultimately cancelled and in one case recalled.

 

Other Articles you may enjoy:

How to lessen business risk

The Secret to a Successful Business

Burning Bridges

 

Alicia Sisk-Morris, CPA  is a native of the Asheville area.  A Certified Public Accountant since 1999, she has a diverse background in tax, financial and business consulting.  She is dedicated to helping small and medium-sized companies grow profitably while helping them establish practical and sound tax and financial processes.  She is committed to meeting each client’s unique business objectives.  Alicia has expertise in providing comprehensive accounting services, including individual, corporate, partnership, and nonprofit income tax returns, financial statements, bookkeeping and payroll tax reports. Alicia earned a Bachelor’s in Business degree from the University of North Carolina at Chapel Hill and an Accounting degree from University of North Carolina at Asheville.  She is currently working on her master’s degree from Western Carolina University.

6 Comments
  • Mitch McDowell
    Posted at 23:13h, 25 January Reply

    The common mindset is to try to get a business plan or product 100% right before taking action. This rarely works because customers feedback is essential for “getting it right”. A better model is to get it 50% right and then let your customers fill in the other 50%.

    Nice visuals – they made me hungry!

    Mitch

    • asmcpa@yahoo.com
      Posted at 17:48h, 26 January Reply

      Thanks… Can you tell it is Girl Scout cookie season at my house? I agree, its important to get customer feedback early on in the development process.
      Alicia

  • Camai Miller
    Posted at 15:00h, 28 January Reply

    First, let me start by saying I LOVE GIRL SCOUT COOKIES (especially Carmel deLites)! I too was a Girl Scout, and now that I am older, (and have read your post) I definitely agree that the business of selling Girl Scout cookies has cornered the market in several ways. Not only is the product amazing, but the fact that the organization is allowing the girls to be their own business “owners”, where they receive rewards based on how well they do (like we receive compensation from our jobs when we go to work every day), is an amazing teaching mechanism in the area of entrepreneurship.

    I do also believe that the creators of the Girl Scout cookie selling program were very intuitive when coming up with the marketing strategy. Who wouldn’t want to buy ANYTHING from a cute little girl in a Girl Scout uniform, to help out her cause? On top of all that, who doesn’t like cookies? With so many to choose from, it is a perfect combination of marketing and product, which is why their cookie business has been so successful thus far!

    One thing I thought about, when reading the conclusion of the post, is maybe they introduce new cookies every now and again just to remind us all how much we truly do love our favorite type of cookie. Though this idea is a long shot, I have known of companies releasing “dud” products, just to increase sales on their popular models. (Just an idea to consider) Great post!

    • asmcpa@yahoo.com
      Posted at 15:27h, 28 January Reply

      Nice to meet a fellow scout! I do have a bit of background knowledge on some of the new cookies. I assure you they are not trying to come up with a dud product intentionally. They have through out reasons for different cookies regarding pulling in market segments not previously purchasing cookies. The Cinnaspins were “diet” cookies…that had little flavor. The Mango Cremes were designed to interest the Latino community. I personally love mangoes and was looking forward to the cookie and was disappointed when they tasted awful..and I do mean awful! Our local Girl Scout office was left with hundreds and hundreds of boxes that no one would buy. Just a poorly executed flavor profile.

  • John
    Posted at 03:41h, 13 February Reply

    Your post reminded me of one of my favorite movies to watch as a little kid, “The Field of Dreams”. If you are not familiar with the movie, the main actor built a baseball field and players from the past magically appeared to play. I think many companies think if they simply open up shop, customers will come. Having a product or an idea in my opinion only gets you ten percent of the way. Planning and execution need to be present in order to make that dream a reality. Thanks for your post!

    • asmcpa@yahoo.com
      Posted at 15:58h, 14 February Reply

      This is a good movie John! “If they build it they will come” would that not be nice if it was true for new business start-ups!

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