Personal Questions When Deciding to Focus On Products
I have asked myself numerous questions throughout the years in regard to starting a product-based business. The main theme is this: if the potential reward for a product-based business is so high, why haven't I moved into that space sooner.
In this topic, I go through some of the some of thoughts that have come to mind for myself over the years, and some questions you might want to ask of yourself when making the decision to focus your business on products.
From a Bootstrapper's Point of View
Before we get started, the assumption that I am working on here is that, like me, your decision involves spending your own time and money to create a new product.
This includes whether you're the one working on the tools yourself or you are paying someone else and managing them to create a product for you.
This is sometimes known as bootstrapping your business, i.e. a term spun out the phrase 'pulling yourself up by your bootstraps', basically meaning starting your business yourself without external finance and little working capital.
Risk and Direction Setting
When I sat down to write up my notes for this topic, the first thing that came to mind was how I make decisions. Specifically, how do I make decisions about things that involve a fair degree of life-direction risk and consequence such as changing my career direction?
It turns out I'm fairly conservative, calculating and thoughtful when it comes to risk-taking. For me, large parts of the decision around if and when to start focusing on products in my business are centered on the opportunity cost.
When I talk about opportunity cost, I'm referring to what I would have to give up now in order to take the hit of reduced time and income that is inherent in starting a product-based business.
How do you feel about taking risks in terms of your life direction?
This sort of thing definitely helpful to think through. The statistics are generally not in your favour when it comes to launching your own products and growing a business around them. It is important that you go into it with eyes wide-open and at least some understanding of how you are likely to react and behave along the way.
What does your relationship life look like? Are you single or in a relatively casual relationship? Or, are you in a serious long-term relationship or marriage?
How will your partner feel about the fact that focusing on products has the opportunity cost of lower (effectively zero) income when starting out?
How will you contribute to the relationship financially during this time?
Children or Dependents
On the same theme, do you have children or dependents to look after? Can you afford to keep caring for them during the period of reduced income and time early in the life of developing a product-based business?
Remember, caring for children involves providing quality amounts of love, time, attention, guidance, enrichment, overall well-being, etc. It also includes the financial costs that go along with providing things such as food, education, activities, etc.
There might also be other people depending on you in some way? Family, friends, people you have committed to. Situations like these may have their own unique requirements.
Even if you are able to handle it for a few years, what will be the long term impact in the future if your product isn't successful? Will your children/dependents miss out on anything that you would have hoped for?
Your Own Goals and Aspirations
The last two points covered others since I find it easy to think of other people and my decisions could impact them. However, we often neglect to think about ourselves.
What sort of goals and aspirations do you have for your own life. Are there things that you hope to experience or achieve?
If your product business doesn't take-off, are there things that you would be willing to sacrifice? If you did have to give things up, how would this make you feel?
How are you with uncertainty and stressful situations? What about periods isolation?
How well do you know yourself?
If you did find yourself having a down day or two, how would you respond?
Do you have support structures you can rely on? People you can reach out to?
Are you familiar with mental health resources you can learn from or tap into if necessary?
While everyone's situation is different, there is a universal truth: being a human on planet earth costs money.
As we keep pointing out, in the early days, when you focus on getting a new product up and running, it is likely that there would be reduced income for you.
How much does it cost to have the type of life you are living?
Do you have a lot of ongoing expenses, or few? Which of them are must-haves, e.g. food, shelter, vs nice-to-haves, i.e. things you can probably do without? Can you trim any of your expenses down for a while?
Do you have any debt? If so, is it manageable or are things tight? Is it possible for you to reduce some of your debt, i.e. by selling or downsizing certain things that you financed?
Looking back, how good are you at setting a budget for yourself and sticking to it?
What aspects of product-based business are you strong in?
Are you a maker, i.e. someone that can design and build a product?
Are you a manager, i.e. someone that is good at running the business administration?
Are you a marketer, i.e. someone that can promote and sell your product?
There are many other aspects of successful business but these are what I fell are the fundamental three.
You'll need to be strong in at least one, most likely two, of these areas when it comes to building and running a product-based business.
Are there areas that you know you are definitely not strong in?
How critical are these to building a product-based business in the early days?
For critical areas that you are not so strong in, you'll more than likely need to bring someone in to help.
In the book writing community, authors sometimes refer to themselves as planners or pantsers. Planners are writers who plan their novels. Pantsers write their stories by the seat of their pants, i.e. without a plan.
When it comes to business, you're likely to fall into some range of being a planner or pantser.
At one extreme, while it may work for writing a novel, you're unlikely to get very far in business if you don't plan anything at all and just wing you way through everything all the time. On the other end, being overly prescriptive and trying to plan out everything possible is likely to stall your progress and may even cloud your thinking
Knowing where you like will definitely help you get ahead faster.
What Do You Think?
These are some of the main questions I have asked myself as I head into the business of products.
Asking yourself these types of questions early on can help you gain a deeper insight into your own product-based business journey.
They say knowledge is power. The more you understand about yourself, the greater the chance you have of making the most appropriate decisions based on your own situation.
I'd love to know there are other important questions you think an aspiring product founder should ask of themselves. Reach out and let me know if you do.