If you’re a South Park fan, you may remember an episode way back in Season 1 about the Underpants Gnomes, an enterprising group of entrepreneurial gnomes with a dream and a business plan:
Phase 1 – collect underpants Phase 2 - ? Phase 3 – profit!
On the one hand, funny stuff; on the other hand, all too true for many businesses. Phase 2 is the hard part, the tactical steps, the enormous winding path from ‘idea’ to the end game of ‘profit’, whether that be a profitable venture, a sustainable company, a successful exit, or a combination of the three. But Phase 2, which is the make-it-or-break-it piece, especially for start-ups, is often the one that receives the least attention in the headlong rush from idea & launch to establishing a sustainable enterprise and reaching customers.
Just because you build it, it doesn’t mean you can get it in front of end customers. And just because you get it introduced to a retailer, it doesn’t mean it will get shelf space. Just because it gets distribution & shelf space, doesn’t mean it will move off the shelf. And just because it sells doesn’t mean it’s a profitable customer, product, or venture.
All of this while a company’s runway, defined as the amount of resources to sustain an experiment before gaining lift & altitude or crashing & burning tragically. And the further you are from profitability, the less control you have over your own destiny.
Even if you start off with the right product, doesn’t mean it has the right cost structure, supply chain, marketing, packaging, or sustainability.
When you build a set of projections for a company or finish a business plan, the one thing you can know for certain is that exact path you’ve laid out will not happen. Something will happen – within proximity of the roadmap you laid out, or perhaps a giant deviation. The key is being able to adapt to whatever comes your way.
The key is answering for ?
How do we know this? Not from a textbook, or classroom, but from having been on all sides of the coin – entrepreneurs, buyers, investors, operators, salespeople, brokers. And having been through success and failure in those roles. Failures one of the best teachers – if you listen, learn, and don’t repeat. And there is no reason, no merit badge awarded, for making every mistake yourself. If you can learn from others, avoid experiencing the pain where possible, and get enough momentum on your own runway you may successfully achieve a sustainable liftoff.