“I dunno…it seems so…niche. I don’t see the WOW factor.” That was it. The fund’s investment strategist had expressed his doubts after our presentation, and I knew that the rest of the meeting, and every bit of work in preparation and interaction up to that point had been and would be, quite simply, a waste of my time. This small group of decisive men sitting in front of me would not invest. My partners at the time kept up their enthusiasm, thinking on their feet, valiantly bringing up options to try and “make them see how great our idea really is.”
The Mission You Chose to Accept
The world challenges entrepreneurs, from many sides and in many ways. Most specifically, it challenges them with attaining that elusive state of entrepreneurial mastery, product-market fit. Thenceforth, all will be well. Unless, of course, expectations of a business’s potential are not in line with its reality. This is not to disparage or question the concerns of the men who dismissed our offering, though it might have been better for our egos at the time if they would have had the courtesy to add that they were dismissing it because it was just not right for their investment objectives. In that, they did well by sticking to their criteria, and it was abundantly clear, at least to me, that we failed to satisfy them.
I did not despair. Not because I was drawing from my vast well of optimism, but because my goals for the business were different from the others: I wanted to build a going concern first, and then to use the revenues from that first offering to expand the scope of the business. It was perhaps for the better that particular venture did not move forward. There were the vastly different temperaments and goals of my partners that were highlighted in that meeting, The idea itself, better left without detail for this article, was embarrassingly undeveloped in the article of distribution and ongoing engagement. It would have been a could-have-been, better left to the sands of time, since I now see it would have been a beautiful product with no way of being sold at any scale.
Learning from Rejection
The experience is important because it highlights two points I like to share with new entrepreneurs who meet with me for mentoring or advice:
First, niche is not a bad term, as it implies an area of focused interest or need. There is no need to sell ads or “build interest” in the opportunities identified in a niche. The real challenge is as always proving a good fit of the business and the offering to the opportunity. The focus in a niche is usually an asset.
Second, it is critical to understand what you are trying to achieve with the activities of your business at a given point in time. Too frequently, folks are “swinging for the fences” every day, imagining that the next milestone will represent arrival the end of the rainbow, and reaping unending abundance. In reality, launching the product is the beginning of the journey of understanding the customer, and the business is still not necessarily going to earn money. Returning to the point, a niche product, if well executed and distributed to its target audience, may in fact become a successful business asset, providing, in the case of subscription offerings a stable, if somewhat growth-limited stream of income for the business to re-invest in future opportunities. Entrepreneurs should never confuse their product(s) with their business.
Embrace the Challenge
I believe it is time that entrepreneurs looking to build going concerns examine carefully their goals and not dismiss niche product opportunities out of hand. Instead, they should turn the limitations—the very specific needs, the addressable market smaller than the entire world or the entire country—into strengths, building depth in their efforts from challenges that will reveal further opportunities missed by would-be competitors too lazy or constrained to attempt entry. All the usual admonitions for customer development apply, but also important is the realization that the smartest guy in a small room is only one limited-distribution opinion with different goals for his money that do no coincide with your success. It is not the end of the world, but rather the beginning of many better possibilities. Embrace them, embrace a niche you believe in, and build a going concern!