Well hello there wonderful human,
When you come up with a fresh idea do you ever think, "would people actually use this or is this just something that I find interesting?".
It's a great question. In fact, it's an extremely healthy question as it could save you a lot of time and money.
Let me take you through the three stages of launching a product as I have seen them. Hold on to your seats though, we're heading to analogy city. Let me tell you all about The Soup, The Restaurant and The Franchise...
The Soup 🍜
I compare the initial idea to a cooking recipe. Mad huh? Bare with me. Your idea comprises of different components or ingredients. Discovering if you are missing ingredients or if you have the incorrect proportion of ingredients is vital.
So, you're in your kitchen cooking every different possible combination and taste testing. After a while, your taste buds are all out of whack from the sheer volume of soup you're consuming. This is why it is essential to taste test your recipe on a few honest people. They need to be able to tell if you if there is too much salt, too much tomato etc. This is often referred to as "product validation".
I've witnessed a lot of people getting this stage wrong. Many try to get as many customers to purchase their soup to "validate" their idea before fully completing the taste test process. It doesn't need to be perfect, but it needs to taste good to potential customers.
The Restaurant 👩🍳
Now that you have validated your product/soup, it's time to open a restaurant. A big step that brings with it a slue of new challenges. Customer service, hiring, finances and customer retention all come into the mix.
Remember, you know you have the recipe for a great soup! Do not forget this and focus your attention on opening a great restaurant. You must refine your operations, work to build a great culture with your staff and ensure your customers have a wonderful experience.
Easier said than done right? I have seen the process of refining a single store take 12 months and more but do not rush it. Much like the soup, getting the restaurant recipe right and documented is key. 🔑
Look at you! You have a fantastic soup that is being sold in a wonderful restaurant, what's next? Well, it's time to duplicate the restaurant across multiple locations.
It is at this point that I believe that venture capital provides the most value. You have proven that customers enjoy the soup and the experience. They continually come back. The barrier is the finances required to open more locations nearby similar customers.
When you think about it, raising money at The Soup stage can often lead to a lot of problems. You end up giving up too much equity, it's extremely risky and more often than not, there is no need to raise money at that stage at all. A home kitchen, some local store ingredients and passion can get you a lot further than the cash will.