How brilliant ideas often lead to bankruptcy!

Hello,

I'm Daniel. Last time I promised you 4 stories to show you an image of the Romanian entrepreneur:

• the story of bankruptcy;
• the story of the business started without a lion (more than half of the businesses start like this);
• the story of education;
• the story of FREEDOM.

But, before setting off, I want to make a few clarifications, given that these stories are mine or that of some good friends of mine.

I think that all stories are pieces of roads, not labels. We all have life experiences from which we draw our juice, learn our lessons and move on, stronger and with a slightly more complete vision than before (the picture we tend towards is never complete).

Failures are the best thing that can happen to us - with one condition! Let's draw the right conclusions to evolve. If you continue to act after a failure, it means that you have overcome it and drawn conclusions from it.

Related to failures - I have not yet met, although I actively coach many entrepreneurs, a single (prosperous) businessman who has not gone through bankruptcy at least once or has not gone bankrupt around the ear.

The secret is that these situations, no matter how painful they may seem at the moment, with no way out, can strengthen us. And an entrepreneur, if he learns his lessons, knows that he can always regain lost ground.

Strange as it may seem, I say this - entrepreneurship is not about money. Money is a very nice bonus, but in the end, it is just a bonus. The game itself of evolution is much more attractive. The desire to always discover new territories and to build something, to LIVE beyond the rules imposed by a society that urges conformity.

That is why the greatest curse a man can experience is the feeling of invincibility. When you feel invincible, it means you think you have a "defensive" position. You are more interested in being perfect than looking to keep moving.

Entrepreneurship is about movement and imperfection. That's why it's perfect. :)

Entrepreneurship is a "never-ending story". Every time you get to a point, you realize that there is another way, that you can still create, that there are still undiscovered pieces of the map.

People are dying. Companies die and often faster than people. Imperfection, permanence - and yet, always enthusiastic and with a vision of an even better future in mind.

That's why there are no "small" businesses. Because small businesses either grow or die. :) A small business is just a step away. A first step.

Today's story is quite short but extremely revealing. It expresses one of the main mistakes that entrepreneurs at the beginning of the road make.

A friend of mine, who worked in a neighborhood games room, had managed to raise money to open one himself. He knew all the secrets of a room, he knew how much money could be earned, the issues involved, approvals, taxes, and so on.

One day he came to me extremely excited: "Daniel, I found the perfect location. I'll open a gaming room on December 1. There's no one in the whole town."

It set in motion money, time and effort. He opened the room and took care of it directly, thinking that when he started walking, he would hire people to take care of it ... and heyy, why not, would open another room.

Gone are the days, weeks, and months. People were late to show up. He promoted in the area, took his printer, printed flyers, and posters, and spread them throughout the commune. And customers were late to enter.

His reply a year later, when he had spent all his money, turned into a vital lesson in entrepreneurship for me. He had closed the room, had debts to suppliers, and had a loan at the bank that he no longer wanted to pay indefinitely.

What at first seemed like a huge opportunity, in the end, turned out to be exactly the main impediment for the business to work. It seems that December 1 was TOO SMALL and somehow a more transit area for the capital to be a favorable place. It even turned out that before him several rooms had closed (on the same principle).

What lessons can you learn from here?

1. The competition is GOOD

Most of the young people who want to go on the road often want to know that they are the only ones on the market. They are looking for a kind of "monopoly" to ensure their success. But reality tells us that when no one does what we want them to do, then most likely what we want them to do is NOT A GOOD IDEA.

Being the first is not a business, especially when you have no experience. If you want to open a games room, for example, then you are looking for an area where there is already a working room.

Look at the benches - which open side by side. Look at the pharmacies. Look in the shopping areas. Just the other day I was surprised to see 3 pawnshops (a sign of crisis) next to each other on the ground floor of a building.

2. If a product "works", it means there is demand

As young people who want to start a business, we want to come up with a product or service that will break the bargain and no longer exist on the market. In the absence of experience, this is at least unlikely.

There is a saying: inventors die of starvation, while entrepreneurs win the masses of people on their side.

You don't want a product that the market doesn't recognize! At first, you want a common product that sells hard. You make a similar product and add value (elements that differentiate you - in terms of customer service, delivery, bonuses, prices, and actual packaging). But it all starts with a product that is in demand. You don't want to fight the market, you want to work with it.

3. The concept of "wave"

Entrepreneurship has more to do with human psychology than chaotic opportunism. Market demand (people excited about a range of products or services, something that is easy to recognize and that generates enthusiasm) is like a wave.

When you start a business, you want your product or service to go with the flow! That's why I don't believe in "brilliant ideas" because they often indicate a missing wave. From my point of view, there are no good or bad business ideas, there are only untested ideas yet.

Every time someone comes to me with a product or business idea, I ask them an extremely simple question to see if it's worth testing: - Who else sells something like that? (here if "ANYONE" answers me - it's already a big question mark)

The "wave" has some properties that, unfortunately, are not mathematical. If you don't have experience, you don't want to be the one to generate that wave, for the simple reason that you don't have the resources to do it. It is too much effort that usually fails. You also don't want to be on a waning wave. Because that wave will fall on you.

For this, you need intuition and some life experience. When everyone becomes a real estate developer, it is again a sure sign that an earthquake is approaching in that market, but by no means that it is time for you to become one.

It is ideal to be on a rising wave. The growing wave is given by the recognition of the product/service by the market, prosperous competition (which sells), and very high demand.

The declining wave is given by the greater enthusiasm for the business idea itself than for the product, in which case people want to do business with something like that, rather than buy.

Example "wave":

Fornetti stores. Before 2007 it was complete madness because there was REQUEST and it was a business to open. People quickly recognized the product and consumed it. The wave has passed and now it is not necessarily a "hot" business. That doesn't mean it's a bad idea, because I know enough people who have made a lot of money from such stores. It means that "timing" is no longer good.

4. "Different" does not mean "unknown"

There is a lot of talk in marketing about "differentiation", but the concept is not 100% understood. Inexperienced entrepreneurs are excited about the idea of ​​a product that does not exist on the market, saying that this is how they will differentiate themselves from the competition.

Nothing more false.

You need a "hot" product, easily recognized by the market, often common. Once you have identified it - only then does the process of differentiation begins. And this is done depending on what you can put on it (added value).

See you soon!

P.S. If you like to read while drinking coffee, you can offer me a coffee too.

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