What are you selling? Who are you selling to? How are you going to sell out?
In this day and age you aren't looking to build a company that you can pass onto your grandchildren so you can teach them a lesson about hard work and dedication. Maybe your grandfather told you how he walked door to door to every department store to convince the general manager to put his hand made shoes on their shelves. How he trekked in the snow to the factory that he built with his own two hands building a brand of integrity and value.
Nowadays it about the quick and easy, lets raise as much money as possible, blow out that valuation and use a ton of buzz words because who doesn't like to use buzzwords like.....disssssruptttion. Mmmm...sounds so sweet.
I'd say for the past few years it has worked and really worked well, but at some point the night ends and we all wake up, especially when shareholders investments of billions of dollars aren't realizing returns.
Now this isn't to point you in any direction. It is simply to make you think ahead. So I ask you again...what are you selling?
"Well its an app. called ST.ART...it's short for Street Art and what happens is you see this video about you're favorite street artist and you click and then what happens is it takes you to this page..." On and on...blah blah blah.
Apps are great, don't get me wrong. They can be helpful, educational, charitable, and there are many emerging ideas out there coming from talented individuals. But what are you really doing? You are E.E. We all know what E.E. is if we went to business school...right?? Earning Eyeballs...I'm joking, I just wanted to make my own Buzz Acronym...and it felt real good.
Now take it one step further. Who are those eyeballs and what are you going to do with them?
So back to ST.ART. You've got a ton of unique viewer, followers, subscribers...and wait...there IS something really interesting about those eyeballs. Those eyeballs all belong to 17-25 year old men in populated cities surrounded by commercial infrastructure. Individuals who also are artists! They love your app! So now that your app is building momentum. Let's tell our members if they pay $7.99 a month they get the premium version...more street art...less interruptions...right streaming music model?...Isn't that how it works?
Maybe not, but you know what that site does do...it inspires kids to paint. They just have to get off their phone, go the store and buy those spray paint cans...maybe a few other tools to create stencils, and off they go. Or do they? Why should they leave your site, you're the expert on street art, your site has the best editorials, photos, how-to instructionals, so can't it also have paint?
An app is the opportunity to build a brand without building traditional tangible products. It actually takes out a lot of the leg work of manufacturing products. At this point your brand may be even more important than the raw materials that make up your product. In fact you decide not to manufacture paint...you just license your favorite paint and stick the ST.ART brand on there and boom...you've got a product.
It used to be that you had to have a product to build a brand, and now you can build a brand before you have a product. Yet be mindful when you build that brand and the product you aim to attach it to because once you define your market it can be tough to pivot.
Overall, your product sales are synonymous with revenue. Large companies are most likely going to be more efficient than small companies so earnings are generally...and I repeat...generally not as important as sales because whether it be physical or digital...sales represent "shelf space." A larger company will absorb you when you have acquired "shelf space" that they want. Maybe it's because it's easier than building it themselves or its your brand or because its your intellectual property.
Back to our example, ST.ART is suddenly taking up the first three pages of google when you search for "Street Art Materials" as well as the first two rows of Aaron Brothers. Then one day a phone call comes in from Painter Bros., the biggest paint company in the Northern Hemisphere. In fact they create house paint, car paint, marsupial paint, (kangaroo paint, obviously.) They say to you, "Sir, you have made a real dent in our "shelf space" and whereas we used to have 65%, we now have 58% because of you. We would like to buy your company and buy your "shelf space"."
Whether it be software or clothing, whatever you build, your goal should be to capture a certain amount of the market...a certain amount of "shelf space." Because at the end of the day that big company is going to want to buy that back from you because maybe it was their's to begin with.
Now one day you'll tell your grand kids how you started a brand from scratch. You designed the wire framing and built out the back end, front end, user interface and with your great following you attached that brand to a product all while your grand kids roll their eyes at you. As all else in life is cyclical, you've now taken the place of your grandfather, and although you're not walking in the snow to get to the department store to sell your hand made shoes, you really are doing no different than he. You both were just C.S.S.
Chasing Shelf Space.