here is what I have learned in three years of my "startup" and six years of another company. - Selling/Trading skills are more important than your product - Customer relations are most important. If internet is banned tomorrow I can sell toilet paper to my customers - Mediocre product and superb selling skills is better than superb product and no selling skills at all - Finding a sweet spot for your product price tak…
Interesting - this is quite different from anything I've ever heard on the subject. Can you expand on the reasons here? Also, it doesn't seem that you are talking about a tech company, which is pretty much implied when you talk about startups around here.
I own two companies. I have opened up a company six years ago with my friend, it was supposed to be a high tech company specialized in graphics r&d. Soon after that we started doing stuff that is related to that, like visual effects supervising, developing custom graphics tools for projects and stuff like that. After that business diversified into design, and even web design. I wasn't happy with that since we lost focus. I bought out company and delegated it back only to VFX/R&D company and it works like that to this date. It also serves as my holding unit for another company (that is this company owns 50% in another company) and a vehicle for my personal services which I do at least several times a year, like VFX Supervision and directing commercials and various tv projects. It is a really small company with only three of us, but it is profitable.
Another company is a business services company with a tech edge, sort of. It started out as an online service for monitoring public tenders, which are already public, but I have a system that monitors them for you based on your preferences and emails you about them (alerts), makes them easibly searchable, categorized etc... It is a subscription based service, and I had a vision to offer more services all for the same price - so you get as much services as we have all for one subscription. And it works. I have added a relational, up to date, company listing of all companies in this country, where you can see all of their info (you can request financial status for a separate fee), see who is the owner, see if that owner is an owner somewhere else, and various other relational data. Now I have added two more services into that, and am preparing a new design which will launch with another three services - two of which are not online. There is also a business related site with articles from experts and new attached to it all. As you can see it is a number of things, but they are all related. This is also a small company, only 5 people, not including me, 4 people doing sales and one doing content maintanance. I am all of tech support needed and I habe made all of the code myself. In three years we have pushed two competitors (one local and one international) out of the marker, made ourselves a market leader here and have a healthy prospect.
What I really want to do asap is to bring that service on an international level, there are a few players out there that do that on international level, but it is easily takable if you know what to do, and quite easy to sell since there is no direct relationship, only branding. The problem is that bringing this stuff internationally requires logistics/money I don't have and I am pretty far from knowing any VC or contacts with them. Even if I find VC, it is not about the money as much as logistics I would require and know-how on international level, instead of regional. I always wondered why google didn't come about this business, since it falls into their domain - organizing data and making it searchable and current.
- Selling/Trading skills are more important than your product - Customer relations are most important. If internet is banned tomorrow I can sell toilet paper to my customers - Mediocre product and superb selling skills is better than superb product and no selling skills at all
This one can be viewed as one. No matter what line of business you are in, in direct sales (cold calling included) it is you who customer buys, not so much your product (that comes if you have exclusivety on something, a monopoly). Trade channel you make is what you need to nurture and it will yield you a profit every now and then. You need to take care of your relationship with your customer and push products on them every once in a while. Be it you are a tech company or whatever company, you have a product or service to sell, you make a network with your customers every day - that is what you do no matter what method of marketing you have (marketing as in sales and promotion, not promotion/branding only). If you are in business of making money you are in business of making a trade network/channel. That is the "business" part of your company. Part where you make or buy products/services you sell is another part of your company.
- Finding a sweet spot for your product price takes time and adjustments, selling cheap is a road to fiasco - Acting quick on market changes is not always a good idea, probably isn't good idea at all
When you start pricing your product/services, general rule is that you start within a range your competition does. We did that at in the beginning. Then, naively, I have opted to cut a price a bit under competition believeing it would be a selling point - it didn't matter, people wouldn't opt for us on that merit. What I've found out is that established trade channels will pay pretty much whatever price you give them (within a reason) since they are buying from YOU, not your company, from YOU - and they will do business with YOU even if you move from company to another. Brand loyality does not matter on small scale. Price you set and tune matters only in the beginning of establishing a trade channel.
- If you are partner in a company, when money comes rolling in - problems start, make sure you all have the same goal
While I didn't personally have a nasty/greedy situation like I've heard happend in several places, I had a situtaion for sure. When money started coming in, my partner and I had different visions where we wanted to take a company further down the road. Since I was the majority partner (in vfx company), I offered to pay him up and take over the 100%. His vision, sadly, didn't come to realization, which he pursued on his own, and we are still good friends. Make sure you have the same long term goal if you partner up with someone.
- customers do not know what they want in most cases, you have to bring them your vision and sell it to them. Do not expect them to tell you what they want and that would be your feature list, it won't
This boils down to two items as I see it. One is that I get an impression that when your client buys stuff from you it is partly due to the trade channel relation where they buy stuff from you. They need some form of that stuff (or don't need), and they trust your judgment on what you will provide for them. The other thing is that people are generally delegated by inertia and trust you as a professional to provide them with the thing you sell them because you know that stuff - they don't, at least in my experience. They provide you with general idea what they need, but almost never exact specifications.
- last, but probably most important. Focus on one area and do it good. I don't mean necessarily on one product, because selling one and only thing is a lot harder than having a leverage of several things to offer - but if you sell several things, be sure they are related to one area.
You have to make some sort of brand for yourself, even if it is a small scale. It looks shady and not professional if Coca Cola sells you drinks and vehicle parts, even if they have resources to do it. If you want to diversify, open up another company or make a brand on its own and have a business group that manages it.
PS Sorry for "engrish" and long blob of text