If I knew then what I knew now – 1

I have been asked to write a series for the Fairfax papers – these columns appear regularly in The Age, Sydney Morning Herald and Courier Mail…

The editor asked me to write something that was insightful but educational.. and he inferred entertaining too. As I thought about it I realised that the lessons learned – or things that ‘I wish I knew’ would probably the most useful… so I have republished them here – because not everyone has a subscription to those publications.

I think back more than a decade to the moment that I thought it was a good idea to start an online business. There are some things that I really wish that I had known as I set out. But then again maybe the greatest lessons are often learned the hard way. As one mentor said to me years ago “the greater the loss the bigger the lesson.” At some point however if these business lessons get too expensive – well then it’s all over really.

So let’s consider that very first moment when you think that it is ‘a good idea to run your own show’; you have read of these entrepreneurial heroes who create amazing ‘overnight’ success stories – and you think, “I could do that”.

All you need now is that idea – which will make the business simply slip into place and you are on your road to Nirvana. Ah, what a lovely dream – sorry to bring you down to earth – but businesses are 1% idea and 99% execution.

You still need that idea though; with out it you only have hard work.

I’m approached regularly by people wanting to share a new business idea with me. They ask earnestly “will it work?” My response to all these queries is always the same. “Why do you want to do it?” Working out why you want to start a business (let alone keep running it for a good proportion of your adult life) – I believe is essential to sustaining you, and ultimately the success of the enterprise.

My suggestion is if you are driven solely by financial success – think again. Great businesses solve a problems… they make life ‘easier’ – they do things that had not been done before. They make a difference to other human beings. In fact you could argue that great businesses make the world a better place.

All of the great start-ups that you can think of solve a problem. Facebook was about keeping college students connected – Google was about making the worlds information accessible – Apple, can we count the number of problems that it has solved?

So the first step on creating a viable business is to work out what problem you are solving, stated simply ‘what is your purpose’.  Even if you are already in business – you could ask yourself the same question. In fact a businesses purpose may change over time as it adapts to the market or sees new problems to solve.

My purpose developed as I began to serve customers and I learned about how our experience vouchers were being used by our customers. Initially when I started the businesses in the front room of my home – what I was looking for was a lifestyle – I had two young children and I thought [naively] that I could play with my kids in the day and work at night. Until the kids challenged me one day and asked “why do we have to go to bed at 5.30?”

I did want to create a flexible work place – but that was really about ‘how’ we did business rather than ‘why’ we were in business.

RedBalloon was not the first business idea I had – but as I look back now I realize that of all the ideas I had – it was the one that inspired me, that I was passionate about, that I could see making a difference with. As I learned only last year when I did a Harvard Business course the idea was a ‘disruptive’ innovation. It brought a new product to an existing marketing delivering it cheaply and quickly – and the incumbent dominant gift retailers would not have noticed us on the horizon – coming to market (nor would they care).

If I was to pose a question for you to think about: why do you do what you do – and who will give a damn? Are you building a better mousetrap or are you changing the game of rodent management?