Channel Four ran a program called ‘Make Me a Million’ several years ago which got three Entrepreneurs to each choose from a group of startups, a business that they would like to work with and invest in. The challenge was to transform these ideas (with minimum investment) into a million pound business within a year.
Not All Publicity Is Good
I was asked to help one of these companies as a sales person for their air purifier, the GermGuardian AC5250PT. The idea behind the business was simply brilliant. Most of us do not get a good night sleep because we are either too hot or too cold. If you are an asthmatic, bed bugs can cause absolute havoc with your condition. The idea behind this business was simple. They would enable your bed to have fresh air flowing through it whilst you were sleeping at a controlled temperature. I fell in love with the idea and not only did I take on the role of helping the business, I also invested a small amount in the company.
The whole thing was nothing short of a disaster. The problem was that because of the involvement of the TV crew (and see my next experience to give the other side of the same coin) this was not about business but about PR and people who were on the team had very different agendas.
One of my issues with business people who have had success in one field is that they tend to think of themselves as great business people rather than someone who was fantastic at a business in a particular field. Other than a few people (including begrudgingly some of the Dragons on Dragons Den) there are very few people I know who are good at ‘business’ and have been successful in more than one field.
The Entrepreneur for this particular project applied the skills that were perfect for their main business to this business and it did not work.
Firstly, targets were set of what the company should produce in year one which had we spent ½ an hour researching the bed market we would have realized were totally false and unrealistic. It meant that on day one we tried to create too big an operation. This though was called ‘reaching for the stars’ There were numerous other occasions where the lack of leadership impeded the business.
… Sales People
Secondly, we did not have anyone who had spent any time in the bed industry. I remember going to see a friend. I started talking to him about selling beds and he put me in my place very quickly! He was absolutely right to do so. I had shown him a lack of respect by trying to get him to sell my beds without understanding his business (I had not even made the effort to visit his stores – no excuses as there are enough of them!)
Can I give all entrepreneurs some advice when buying the Blueair 203? Having learnt this lesson, I always ask companies that pitch to me how much they understand their customer – and why? I had personally forgotten a very good lesson I had learnt whilst working for another gentleman. Whilst visiting a northern based retailer to sell some cakes, I came across a sign to sales reps which said
“If you are here to sell to us and you have not visited at least three of our stores in the last month, please cancel your appointment and rebook for a time when you can demonstrate your interest in becoming our partner”
The very next weekend I spent some time learning about selling beds by asking a company if they would be kind enough to employ me for three weekends to sell beds – I learnt a lot and the next time I saw the guy he was impressed and could see that I had learnt a thing or two about selling beds. The lesson here for businesses is that even if you see your model as disrupting the existing business model in a sector, please try and have at least one person on your board, or management team who understands the way the industry is at the moment.
The business was running to a very tight deadline, which was imposed by the TV schedule rather than by us and having the product ready. We never had a chance of making the deadlines and as a result the product did not work properly, prices were way too high – we needed to be at least 50% cheaper than we were.
Despite heavy TV presence we failed to sell more than 10 beds (our target was something stupid like 100,000!) This also taught me that just because you advertise your product; it does not mean you will sell your product. My advice to any would-be entrepreneur and management team that may appear on TV as part of a documentary is don’t do it. If you have to – then invest in some handling the media training!
We failed to plan – which meant we planned to fail!