In 1997, tech entrepreneur Greg Gianforte started a company in an extra bedroom in his house. It became known as RightNow Technologies (NASDAQ: RNOW), which now generates more than $100 million in annual revenues.
Recently, I had a chance to talk to Greg. I asked him: Is it a good time to start a business?
His answer was simple: It's always a good time to start a business.
Yes, this was certainly encouraging. But, I then wanted to know: What's a good business to start?
Well, the answer was more involved. Actually, he said it's not about targeting a "hot space"; instead, Greg says you need to think about two things. Let's take a look:
Dial your phone: When Greg got started, he had a vague idea of what he wanted to do. First, he thought the internet would be a powerful tool for businesses. So, why not use it to help with customer service?
Instead of jumping in, he called over 400 potential customers (in one month) and kept notes. Over time, he realized some important things. First, companies were having trouble managing their e-mails. Next, they did not want a knowledge-base solution (essentially a list of FAQs). Rather, they wanted something that would process the e-mail questions and then automatically turn these into FAQs.
With even more calls, he refined his idea.
He was ready for development, right? Not necessarily. He had to answer the next question.
Will customers buy it? Greg "dialed for dollars." That is, he asked potential customers if they would buy the product and what they would pay for it. Again, he eventually got enough feedback that he realized there was enough interest to support a business.
Next, when he had his product finished (which took a couple months), he went back to these potential customers and said he would install the product for free. Oh, and the first couple months of the software's use would be free too. It worked wonderfully because the software helped deal with the e-mail volumes and the customers ultimately signed up to pay for the service.
Final Thoughts: Keep in mind that Greg had no business plan. His research was talking to hundreds of potential customers and getting a feel of what they wanted. It's a common sense approach, yet many entrepreneurs don't do it.
Also, to help more with the start-up process, Greg has a book on the topic: Bootstrapping Your Business: Start and Grow a Successful Company with Almost No Money
Tom Taulli is the author of various books, including The IPO Primer and The Complete M&A Handbook
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Reader Comments (Page 1 of 1)
8-10-2009 @ 12:19PM
gopfrombama said...
I just started my own ad specialty product business in my home with a $5000 SBA Loan and $5000 of my own money. I'm waiting for my equipment to be delivered within the next week. I was approved in mid April for the money but it took until the 3rd week of July to fund. I am very blessed to be able to do this at the age of 59, with only a high school education and limited resources.
8-10-2009 @ 1:27PM
Cindy said...
I started my virtual assistant business in 1997. At that time there was no doubt as to what I wanted to do. I was already in the secretarial field and had lots of experience. However, I didn't have experience with handling customers, sales & marketing. Maryland Secretarial Services, Inc. www.webmss.com
8-10-2009 @ 2:20PM
JOHN said...
I would like to know if I could interest anyone in taking a look at a business idea that could realistically create a second income stream of $500 - $5,000 per month with no risk.
Now, it's just a look, if it doesn't appeal to you , well, no harm , no foul. - I don't think you'll be disappointed.
8-10-2009 @ 10:09PM
AgentIsbell said...
I started my own online health and life insurance business
www.insurancepd.com targeting Central Florida clients of all ages to 84. I figured it was less expensive on gas and my car. I only have to go on brief appointments to collect information sometimes.
I am also planning to start writing articles regarded Health Reform and my experiences with different companies and their policy's.
8-18-2009 @ 4:19PM
Karen said...
I would love to start a work from home business. I went to www.opentoabundance.com to find out what that business was all about. What I found was a lot of empty talk. I have a problem with information being given that is anything but informative. After reading everything, I have one question.....What is the business?! It's my opinion that if you have to beat around the bush and be vague, the business is not on the up and up.
8-23-2009 @ 8:14AM
Scarlet said...
FYI...If you are looking to start a business at home..don't let the big numbers scare you ...there are business that you can start with very little start up cost. $100 and it's your's . But that's not the most important advice I could give you. Anyone who isn't familiar with networking or online advertising should make sure you have the support of the company you get into. You never want to pay for a DVD for a business with a note attached that says "good luck"..I have been working a business at home for over a yr and a half. I've learned how to market my business from the beginning thanks to my support team. Now I'm the teacher. It's all about having people around you that help you to succeed.
Any questions..I'm glad to help.
Scarlet..
Safe-Harbor@hotmail.com
9-06-2009 @ 11:18PM
mark allen roberts said...
This is a great example of doing it right the first time.
He did what 85% of startups fail to do; he gained an intimate knowledge of his market and understood an unresolved problem. Not only did he discover the problem, he determined how large it was and that consumers would pay to make it go away.
This is a great lesson.
Unfortunately far too many entrepreneurs take a ready-fire –aim launch process. They feel their gut and intuition is good enough. So they create “cool” new products or services the market does not understand. I discuss this in my post : Mentor Moment #3: Just because you can, does not mean you should http://nosmokeandmirrors.wordpress.com/2009/07/24/mentor-moment-3-just-because-you-can-does-not-mean-you-should/ .
Greg teaches entrepreneurs the way to build solutions that seem to sell themselves.
Mark Allen Roberts
9-19-2009 @ 2:35PM
Humberto Cignarella said...
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9-19-2009 @ 2:42PM
Humberto Cignarella said...
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10-30-2009 @ 8:25AM
Ron Derven said...
One of those nagging Murphy's Laws is in effect at this point in the economic cycle. That is, whatever business you start will take longer to get going and to turn a profit than anticipated. Therefore, if you currently have a job or other sources of income you can tap, do so until the new business is up and running and the economy is stronger.
Ron D
http://www.start-a-business-faq.com
11-07-2009 @ 1:50AM
jiangyanfeng86 said...
It's nice to start my own bussiness.I'm a native Chinese.
Now China is the factory of the world. With good quality and low price, the products from China have met great favor in the whole word. More and more foreign companies come to China to find better suppliers.
I can source the best and cheapest product in Chinese facotry.If anyone is interesting to start a business selling cheap products made in China,Please contact with me.I'd like to work together with him.
my email:jiangyanfeng86@gmail.com