What’s in a good business?
Author(s): Scott Douglas Jacobsen
Publication (Outlet/Website): Mendy Marcus
Publication Date (yyyy/mm/dd): 2018
Scott Douglas Jacobsen: Online companies seem to have become the norm. In fact, there appears to be a reduction in the number of retail companies in favour of online replacements.
Does this seem to be the trend? If so, what can entrepreneurs keep in mind when building newer businesses and business models?
Mendy Marcus: It’s true retail is dying, but that’s a good thing and not a bad thing. Retail is being replaced by something far greater. Retail takes physical space software doesn’t; retail costs an enormous amount of money while digital doesn’t (sometimes).
Over the years, the opening of a business has become much more expensive, tedious, and difficult. For example, what you would be able to do out of your home, you now need licenses; what you’d be able to do by hand, it is now done by machines; what you used to do with your brain, it is now done by software.
This is great for those who started by hand and have graduated. It allows them to do more with less; however, this is terrible for newcomers because the options to start are no longer there.
In order to start that same business, you now need to buy expensive machinery or build software etc. The move to the digital market can, sometimes, help lessen the new versions of opening a business.
But if your business is completely new, you may have to build a lot of software. It may be even harder to start up. There is still a lot of work to do, just like opening an ecommerce or starting a website.
It needs to be affordable and easy with platforms like Squarespace and Shopify. We now need to have similar platforms for building app and more complex software so that we can do back to the days of doing it yourself and being able to start a business with only $1000.
Although, I wouldn’t write off retail so fast it is here to stay, however, in a very different form. I see retail as the physical side to a digital world, a showroom of sorts, a grocery store.
A grocery story you only go into to see the food, but why shlep at home when you can have it dropped off before you even make it home yourself or a place you can sit and play the video game before you download it to your TV at home.
I also see startups, lawyers, and accounts and order types of officers occupying the “retail” spaces. Of course, we won’t be calling these retail; however, these will be what we will walk down the street to, and these will make our cities modern, hip, and lively.
The boring old stores will move into warehouses and sell strictly through apps and showrooms.
Jacobsen: When approaching the conceptual, early stages of business development, such as an app, what are some of the critical thinking, reflective steps to keep in mind?
Marcus: I don’t have a billion dollars in my account. So, I’m not going to pretend I have all the steps figured out on how to create a successful startup. Instead, I will focus on something I find very few entrepreneurs and businesses do, and is also a personal annoyance when not done right.
That is, the creation of a great user experience, whether it’s digital or not; UX is the most important thing. People tend to structure the UX according to how they want to do business or how they think they would do business, instead of doing business according to their user experience.
I’ll use a tech business as an example, but this can apply to a restaurant as well. Whether you are building the walls of an app, or the walls of the restaurant, it doesn’t make a difference.
The first thing you want to do once you have decided to open a business or have an idea is figure out the user experience: how does the customer want to experience what you are selling or offering?
Don’t go right to researching how the market works, that tends to make you want to do what the market is doing or “follow the rules of the industry in order to succeed.”
You should close your eyes, imagine yourself as your first customer that walks into the restaurant/uses your app, what experience do you want, and not what you are expecting.
Because you are expecting what you are used to, and you are used to what all the other restaurants and apps are doing, but that doesn’t set you apart; neither does it satisfy them.
They don’t need you, so take yourself through the experience you want as a user/customer and not what you are expecting. Now, do the same as the 1000th user here for the first time, a user who’s used the app many times.
Once you have figured out what the user experience should be, talk to a lot of people, annoy some strangers with some really bad UI designs or describe what your restaurant looks like and get honest feedback, you shouldn’t ask your friends or polite people who don’t want to hurt your feelings.
Now, you can research the market and figure out how you can create a business model and strategy according to the user experience. Many places sell pizza. There will be a lot of apps like yours even if you have a new idea, many will copy it; people choose you because of the experience.
If this wasn’t the case, Tesla would be all about the technology. The electric vehicle itself is pretty cool, but Elon knew it’s a matter of time before there’s another few electric car companies, so he had to make the driving experience amazing. The car has to look sexy.
The website experience had to be just perfect, picking up your car had to be a thrilling experience, even the test drive had to feel like a big deal. Every detail was carefully thought out.
Even though, the customer is having the time of their lives and living in the moment and it’s all so natural to him/her. It is all created moments by Elon and his team, even the marketing has a user experience. When I have an idea, I don’t turn it into a business and figure out how to make money from it right away.
First, I think about the user experience, then I play around with the UI. This tends to point out the flaws in my UX. Once I have that down, I try to figure out whether I can make some money from it as well.
I suggest always starting out a project as a hobby. This way you’re not in a rush. You are not chasing the money. You’re just having a good time perfecting something that may or may not be monetisable later on, but for now it’s all about having a great idea: an excellent user experience and eventually a good shot at a business idea.
Jacobsen: Thank you for the opportunity and your time, Mendy.
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