Episode 34: The Right Idea
How do you know if your business is the right idea for the market, for the times, for you? That’s a critical judgement to make since you will be spending so much time on whatever business idea you decide to pursue, you might as well make it worth your while. Listen in as Doug and Glenn kick the can around on this essential choice. Let’s call it, The Entrepreneur’s Dilemma. They’ve given this some thought and worked hard so they’re sure to deliver what you need, when and where you need it. How great is that?
Transcript
Glenn Suart 0:00
And what he did was he did 20 sort of mini business plans on which industries would be most effective and chose the book industry as the one based on all those factors that would give it the highest return for the relatively least effort.
Doug Ross 0:29
Welcome to Conversations on Startups, a podcast brought to you by Douglas Ross, author of the book, Spark Click Go: How to Bring Your Creative Business Idea to Life, and Glenn Suart, of Today’s Great Idea, a radio series featuring over 300 origin stories of businesses, brands and inventions that have changed the culture. Welcome to today’s conversation.
Doug Ross 0:52
Hey, Glenn, how you doing?
Glenn Suart 0:54
I’m doing great, Doug, how you doing?
Doug Ross 0:56
I’m doing well. No complaints. No one listens anyway.
Glenn Suart 1:01
What are we talking about this week?
Doug Ross 1:02
We are talking about the right idea – How to choose the right idea for you, for the times, etc.
Glenn Suart 1:11
Excellent. That’s got a whole bunch of connotations to it. And I got a story to share with you on doing the right idea at the right time. Maybe I should start with that first. How’s that?
Doug Ross 1:19
Yeah, sounds good.
Glenn Suart 1:21
So Hector, is a chef and a very canny individual. He immigrated from Italy and ended up in Cleveland, Ohio, where he opened a restaurant, guess what kind of style? Italian, of course. And people came from all around, and boy did they enjoy his meatballs and spaghetti. So much so that they kept asking Hector for his recipes and ingredients. And that’s when he had an idea. Why not package his food and let people enjoy it at home? It’s the right idea to expand his business. So, he started a little factory and the sales far surpassed what he was making at the restaurant – which was already incredibly successful. So, he expanded to a much bigger factory… factory in Pennsylvania, where he was close to a lot of abundant supplies like tomatoes and mushrooms, right idea there. And then during World War II, the US military asked Hector to produce army rations. So that kept the factory going really crazy. He was given the… one of the highest civilian honors you can get by the US government for keeping that factory going in the war effort. So today, the pasta that Hector created still sells millions and millions of units every year. And you can see Hector’s name and likeness on every can. Any guess?
Doug Ross 2:32
Chef Boyardee?
Glenn Suart 2:33
Chef Hector Boyardee [Ettore “Hector” Boiardi], exactly. Great business. The right decision. He made… obviously, there’s ups and downs for any business, but he made a lot of good decisions, the right decisions. He had a successful restaurant that… people [were] clamoring for it. It made sense to sort of try to give them the food at home if they wanted to… And then when he wanted to grow, he realized, get closer to his supplies so he did that, too. So those are the kinds of… it’s a good illustration of right decision making for your business. Now, sometimes these things don’t work out. But in this case for Chef Boyardee, it worked out great.
Doug Ross 3:10
Nice example. And he’s ahead of his time. There’s a concept I recently heard the name for this, which is ghost kitchen, I believe. Have you heard of that concept?
Glenn Suart 3:22
Vaguely, but I can’t remember what it means.
Doug Ross 3:24
So the idea being here, same sort of idea, centralize the food production. I hate to use that sort of terminology. But that’s what it is. It’s not so much cooking when you’re doing massive quantities, but the production… centralize the production part of it, and apparently, this is happening now. And it’s going to tie in with the delivery services. So instead of the delivery services, and there’s multiple of those out there as you know going to each individual restaurant, these restaurants – and more than just one – would centralize their cooking, their production in one place, and the delivery people would pick it up there and then deliver it. Food to the people.
Ali 4:06
You’re listening to Conversations on Startups with Doug and Glenn, merci pour nous avoir joindre.
Glenn Suart 4:14
Now that you mentioned it, I did a plan for a business many years ago, that was sort of like a ghost kitchen operation, where they had a central kitchen and then they had all these storefronts where they would sell the food from. This is before the delivery services took off. I’m actually doing this live from a restaurant. So if you hear sounds in the back…
Doug Ross 4:34
I can see it.
Glenn Suart 4:35
It wasn’t my best choice today. It wasn’t the right decision for location ironically. But with this ghost kitchen thing it was… we were trying to figure out where they should put their location in Vancouver, the manufacturing of the food, and such that they could deliver to restaurants all over the Lower Mainland. You don’t need to know the geography of Vancouver, the Lower Mainland all that well, but it’s… it’s like any other bustling city – lots of highways, lots of traffic issues. [To} determine the best location, it actually was relatively easy because what we looked at was the food suppliers, who were already supplying all these restaurants across the city. And they of course, had spent millions of dollars in research thinking, Where should they put their location? And so, our decision was pretty easy. Put the kitchen where these general food service suppliers are. And that was exactly the right thing to do. However, the business actually didn’t expand to Vancouver, but it was an illustration of trying to understand, If you’re going to grow, what’s the right decision? The right decision – you could have spent a lot of money yourself, but figure out what other people are doing in the same kind of business. And they’ve already figured it out, potentially.
Doug Ross 5:51
Yeah. And that’s what we’re talking about today is coming up with the right business idea. And then you’ve got all these other things that flow from it like location, which was the focus of our discussion in the last episode. But so when you’re trying to think of the right business idea, supply is one of the key things, that there is a good supply. What else should people be thinking about when they’re trying to come up with the, let’s say, the quote, unquote ideal business for them?
Glenn Suart 6:22
Well, I guess the obvious is, be close to your customers. Know and understand where they are, and how you can be in front of them regularly. We talked about supply, staffing, making sure you have access to good people. So trying to decide what’s important to your business is really important. And then figuring out where to find those resources. Does that make sense?
Doug Ross 6:44
Yeah, but I just think topic wise, we’re trying to think about coming up with the right business idea. So not so much location focusing on that.
Glenn Suart 6:53
I love location, you know, that?
Doug Ross 6:54
Yeah, location, location, location. You know, I’m thinking of things like customer needs, there’s a need out there that you could fulfill. But the bigger sort of picture or principle here is that… I think… to take into account the external factors. So is there a need out there? And the internal factors, which would be among many other things would be the solution that you have in mind or the business idea that you have. So in the case of Chef Boyardee, as you go back to that, there’s the… need is… people need to eat, and they need quality meals, and maybe inexpensive meals, delivered on time, all of that kind of stuff. And then the solution is this, oh, I’m going to have this sort of semi industrial cooking facility. I’m going to locate it near my suppliers, keep my costs down. That’s what I’m going to do. And I’m going to create this brand as well around my last name. So, I think the big picture is looking at those external factors, and then the internal factors as well. So what is your solution. Things like, Do I have the talent to do this, either myself, or can I attract people like you were just saying, Glenn. Can I attract the talent that I need to my business? Why me to do this business? I think is another question that people should be asking. And is it the right time for this sort of business? [Yep] Does it fit in with with a trend in some way? Timing is just got to be an element, don’t you think?
Glenn Suart 8:29
Oh, for sure. Timing is exactly that. You may have heard of this guy, a small little entrepreneur named, Jeff Bezos. And I know, we’ve talked about this before. But when he… the internet was coming up, and he quit his job to start Amazon, before he did that, he realized that the internet was going to be powerful. And what he did was he did 20 sort of mini business plans on which industries would be most effective and chose the book industry as the one based on all those factors that would give it the highest return for the relatively least effort, and you know, obviously did pretty well.
Doug Ross 9:08
I’ve heard he’s doing okay.
Glenn Suart 9:11
He’s surviving. The key thing though is, to your point, sometimes, getting to the right decision is going through a process. I write business plans for a living, but I find that sometimes you don’t need them. What you really need is the process of going through the business plan to finally figure out what you’re good at and what you’re not good at and what the opportunity is, etc. The process is the most important thing. And that’s what Jeff Bezos did and I think to make the right decision is going through a process to figure out all the elements that you’ve talked about.
Doug Ross 9:45
Hey podcast listeners, we’re gonna take a short break now. If you’re enjoying the show, feel free to invite your friends, remember to subscribe, and if you want to help spread the word leave us a review on Apple Podcasts or your favorite podcast app. Each episode of Conversations on Startups focuses on a single topic. If you want to comment on something you’ve heard on the podcast, or suggest a topic for us to cover in a future episode, send an email to: go@todaysgreatidea.com or douglas@sparkclickgo.com. Glenn and I appreciate you and hope you find our uncut and unrehearsed stories, perspectives, and tips helpful. Speaking of helpful stuff, let’s pick up where we left off. .
Doug Ross 10:31
Yeah, it’s so interesting, the internet’s coming along. What kind of business should I create? The other guy who talks about this, is Seth Godin. Do you know, Seth Godin?
Glenn Suart 10:41
Yep.
Doug Ross 10:41
He’s written books like The Purple Cow. And he came up with the phrase of, Oh, what was it? It was, what was… a marketing phrase, “permission marketing” – that’s one of his phrases. He’s… he’s got a lot of things. But his story is about the internet coming along. And what does he do? Because he’s a book maker – that’s what he had been doing, one of the things in his life – he thought he would put together a book about the internet becoming the internet, and so on. And he did that, and it sold a few 1000 copies and everything else. And then the counter to that is the guys at Yahoo create a search engine and a multibillion dollar business. So they’re looking at the same trend and coming up with different… very different… solutions… business ideas for that. [Yep.] I love what you mentioned there, you sort of just dropped it, what can you have the biggest bang, for the least effort. [Yeah] I like that, too. When you’re thinking about a business, you’ve got to think about that, because you’re going to dive into this thing, you’re going to be spending all your available time, you may have a constraint, you’ll look at your time constraints, but you’re going to be putting a lot of effort into this thing. You can’t put more effort into a business than 100%. [Therefore] you might as well pick one that has the probability of becoming a decent business for you, it returns on your effort, what your needs are. You might as well do that, because all businesses take up a lot of your time. Pick something that has potential. So I love that the process of planning is… is valuable. There’s another guy, you know, Kickstarter, of course, right?
Glenn Suart 12:17
Yep.
Doug Ross 12:17
…[Kickstarter] the platform. So the person who came up with that, as a business, his name is Perry Chen. And he takes business ideas and he turns them around – he and maybe his business confidant, whatever – turns it around from every angle, like a Rubik’s Cube, looking for a fatal flaw. And if he finds a fatal flaw, he kills it. And so with the idea for Kickstarter, which took him seven years or more to actually make as a business, he turned that one inside out and could not find a fatal flaw and so he went forward.
Glenn Suart 12:53
Interesting. So that’s a process.
Doug Ross 12:56
Very much so.
Glenn Suart 12:57
Yeah. So it’s not… I guess what we’re saying is to make the right decision – and everybody goes into it to make the right decision, nobody intentionally tries to make a bad decision – but it comes down maybe to the effort that you put in and the process. Not suggesting that you have to do a… analysis paralysis… that you have to over analyze everything, but you should have some type of process to make a decision that allows you to defend what you’re doing. And that’s what I hear you saying with that example, look for the fatal flaw. That’s… that’s the process?
Doug Ross 13:29
Well, yeah, and just for our listeners, some of the things that you would include in that process would be things such as what we mentioned, customer needs, Are there a lot of customers out there? Can we get to them? I would do some kind of risk analysis. So depending on your business, there could be legal risk, there could be regulatory risks, there could be all kinds of risks that you should be thinking about – supply risk, and so on. And why would you go through that process, really, just to identify what those risks are? Are they acceptable to you and your team? Can you mitigate them? If they seem really significant? Can you mitigate them? How would you do that? And then go forward. Are you willing to take on the risks that are inherent in any in any business, to get to the reward that you’re getting? So I would look at risk. I would look at things like business model. What’s the business model here? Is it doable? You and I’ve talked about this many times, and you got to look at things like your gross margins, things like that, to really understand Hey, can my… oftentimes people have a technical solution… but have they thought about the business model? So think about these from multiple different angles as you’re going through this process before you make your… your decision? So yeah, have a process for doing it -makes perfect sense to me, Glenn.
Glenn Suart 14:52
Yeah, if you are… I guess what we’re saying is, some people get blinded by Oh, I’m gonna make a lot of money out of this or or this is gonna, you know, do fantastic. And then they’re surprised when things don’t happen. There’s a variety of reasons why – not that you can prevent all of them – but if you have a process to go through and think, literally about a checklist as it were, of all the things that could go right and could go wrong, in all these areas, the chances of your right decision happening, and being successful, are much more likely than if you just say, I’m going to do this, and hope that it’s going to be the right decision.
Doug Ross 15:30
Yeah, you want to put the chances in your favor. You never know what the outcome is going to be until you get out there and you do it. One other thing I would say that people should think about: Is what they’re doing, is it something they can see themselves applying themselves toward – I guess, would be a better way to put it – over whatever period of time is necessary to really create this business? Is it an interest area? Can they see themselves working there? Or, is it something where it’s on brand for them? This is kind of a question to be… especially if they’ve got a significant reputation out there now and they want to work in a certain area… Can they leverage that reputation? Or, can they reinvent themselves? That’s the other way to go at it. And are they willing to put that effort in, to sort of… make… put their personal stamp on this business? Because you’re going to be putting a lot of effort on this. You want to make sure that it’s going to be reputationally worth it for you to do as well I think as an entrepreneur.
Ben 16:32
You’re listening to Conversations on Startups with Doug and Glenn, thanks for joining us.
Glenn Suart 16:39
Yep, that is intriguing. You have to have the passion, you have to be positive. I’m doing a strategic planning session for a nonprofit group – their Board – this weekend. And in their case, they’ve come to a crossroads, the founder has left and the Board is picking up the pieces. And they’re, you know, Do they continue? It’s going to be a real challenge. They are trying to make the right decision. They don’t have a huge amount of time to do it in and there are options. But it’s going to be very intriguing how we make the right decision this weekend when we do this strategic planning session.
Doug Ross 17:16
Yeah, interesting. Especially when you’ve got a founder coming out of the organization. One thing that the founder tends to bring in addition to the idea, is a lot of passion for that idea.
Glenn Suart 17:27
That’s right.
Doug Ross 17:28
Otherwise, they wouldn’t have created that. So, can there be a legacy there? It’s not an easy thing to fulfill. But I’m sure you’ll have a good process for them. Be careful, they may point to you, Glenn, and say, Hey, we think you’re the guy to carry this forward.
Glenn Suart 17:44
Yeah, that won’t be happening. But they’re very good people. That’s the other thing. It’s good people… they have some divergent opinions. So what I’m… I’ve set up the process to make sure that everyone gets heard ahead of time and then at the session I’m going to be guiding the options, but make sure that people buy into the options. And the options have to include all those factors we just talked about, the checklist. Looking at it as if, you know, is this going to work, not going to work, is there a fatal flaw? All those kinds of things have to be in there to sort of decide which path the organization is going to go forward on.
Doug Ross 18:22
Oh, interesting.
Glenn Suart 18:22
I think it’s going to be fascinating. So, making the right decision certainly is not easy. Sometimes it is, but often it’s not. It takes a lot of effort and discipline, persistence and a bit of a process.
Doug Ross 18:37
Yeah, I think so. And I’ll underscore what you’re saying. It’s just so important. This is what you’re going to be working on for the next X amount of time in your life, it’s a very important decision because of that. And, when you decide the business that you’re going to go forward with, that’s great, you need to be happy working in that business, and also realize that you’ve forgone, though, whatever other options were on the table, at the time. [Yep] So you’re giving up those options in pursuit of this [option]. So it really is worth thinking about this from multiple angles and getting out and talking to people because of all of these reasons. It’s just going to be so important. What was that my dad used to say to me, doesn’t matter how fast you’re going if you’re not going in the right direction. And that kind of speaks to me here as well. You want to work in a direction that really is going to bear fruit for you and be the right business for you given all of the things we’ve talked about. We didn’t even really talk about competition that’s out there, but I’m sure that it will be a factor.
Glenn Suart 19:41
Oh, yeah.
Doug Ross 19:42
What you’re looking at in your process, Glenn.
Glenn Suart 19:45
You bet.
Doug Ross 19:46
Okay, so anything else on choosing the right idea? Any final thoughts on that one, Glenn?
Glenn Suart 19:52
No, I think we’ve we’ve beaten that one into submission. Of course, we sometimes get things wrong. So please, if you listeners think that we’ve misinterpreted this or missed an angle, please let us know.
Doug Ross 20:05
Well, I tell you, doing these podcasts I have much more appreciation for people that are speaking in public a lot, and they say things in the wrong way, or they get misinterpreted. Because after we record these – and people may know we don’t really cut out a lot of stuff, we cut out ums and aghs – but once we get rolling, we pretty much go with it. And I just think Oh, geez, I wish I’d said this in a different way [yep] or, you know, [I said] something wrong. So next time, Glenn, we talked about tackling the subject of crisis management. So what are some preliminary thoughts on that? That’s going to be the topic we’ll take up in the next episode.
Glenn Suart 20:47
Well, if do it right, you can save your business and in fact, grow your business. If you do it poorly it could kill you overnight. That’s really what it is. And I know we’ll… we’ll share some examples next week on that subject, because it’s fascinating. No one thinks that a crisis is going to hit them until it does. And then the question is, What do you do?
Doug Ross 21:05
Yeah, what do you do at that time? And maybe what have you done in advance to to prepare for some eventualities out there, some that are more predictable than others? Thanks for another good Conversations on Startups. Take care.
Glenn Suart 21:18
See ya.
Doug Ross 21:28
Conversations on Startups is a production of Glenn Suart and Douglas Ross. We hope you’re having fun listening but mostly that you take action on your business idea. For more inspiration visit our websites: todaysgreatidea.com and sparkclickgo.com. Another episode of Conversations on Startups will drop soon, or is already available to binge. Thanks for joining us, and remember to subscribe and invite your friends. See ya next time!
Transcribed by https://otter.ai