How To Succeed In Business – Part 2

[ParkLogic]

My business partner in ParkLogic has a saying that has now become a mantra, “Build the rusty mini-bike before you build the Harley Davidson.” So many online businesses waste incredible amounts of money building the ultimate website rather than the one that just barely works.

When Amazon first started out of a garage, CEO Jeff Bezos would literally pull a disk out of one server and put it into another server to process payments. They hadn’t completed the tech build for taking the payments automatically.

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So why did he do that? You would think that the most important thing that he could possibly build would be to take automate the money banking side of his business. No, it wasn’t. He was still banking the money albeit in a very manual way. The number one item on his list was to learn from customers and get the buying process right.

Never forget that you may have an awesome online website but if people don’t buy then what’s the point? Jeff put his resources towards understanding the customer and making it easier for them to buy. He was quite prepared to use “sneaker-net” to actually process the orders.

A couple of days ago I talked with a guy that was looking at building an online business. In his cashflow he’d allocated $200,000 for development. Seriously! $200K for a business where he didn’t even know whether he had a customer as yet!

I pointed out to him a way where he could get the “rusty mini-bike” up and going for at the most $2K. In fact, if he rolled up his sleeves a little he could do it for about $50. It wouldn’t be elegant but it would work. It also meant that he could save his $200K for a time when the business model was proven.

This little bit of advice is why consultants get paid what they do. For a few hundred dollars I just saved him from a potential $200K mistake. He got his money's worth!

So what does the “rusty mini-bike” actually have to do? I call it, complete the revenue cycle. In other words
1. Customer comes to your website
2. Values your product/service
3. Pays for the product/service
4. Product/service delivered

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[Shane]

I love the MVP concept. I think everyone would benefit from reading "The Lean Startup." It provides a solid framework for the process you are describing.