#1: How To Turn An Idea Into A Business

Hello and welcome to the first ever episode of the lazy entrepreneur podcast. I’m your host, Sam Priestley, and this is the podcast that’s all about using business to help craft your perfect lifestyle. Each episode will be on a different subject. This will be anything from really practical things, such as how do you actually set up a business, what are the different types of businesses that are working and making people money in 2018. How do you ship internationally, how do you deal with sales tax in the US and v-18 in europe and all the other sort of complexities that a solo entrepreneur might face. 

 

And we’ll also cover more general things such as what actually is lifestyle entrepreneurship, what is the difference between a startup and an actual business, when do you know it’s time to quit versus just trying harder, should you start multiple businesses or focus on just one. I’ll also include some anecdotes from my life and my career, including some of my biggest failures and what I could have done differently. All in all this podcast is meant to be an extension of my blog which you might already be familiar with. It is sampriestley.com, but what I hope is that I can get out a lot more content a lot quicker than I do with the blog, which brings me on to my first apology.

 

1:57 Focusing on putting out content rather than obsessing over quality 

I’m really sorry if the quality of these podcasts aren’t what you’re used to. I’ve purposefully made the decision not to spend too much time on post production or recording 101 takes or getting them professionally edited or hiring a producer or hiring a recording studio. I’m literally just walking around my house at the moment, just talking to you on my phone through my normal iphone headphones. 

 

I’ve done this for a few reasons, one of them is obviously it makes it a lot quicker to get the content out. To focus on content over production quality. But the other reason is this is a new business and the first few episode are my proof of concept. I’ve purposefully not spent much money on it in order to get them out as quickly as possibly and start getting feedback. It might turn out that I’m really boring to listen to and you’d much rather read my stuff in text. It might turn out that I have a really annoying voice or that I speak too quickly or that you can’t understand a word I’m saying. Or that my content just doesn’t transfer over to the audio format very well. 

 

2:50 Why put out early episodes quickly 

By turning out these episodes quickly in a low cost way from launch, I’m putting into practice the subject of today’s chat. That is, turning and idea into a business in the least risky, easiest way possible. In this episode I’m going to go through the steps I use to go from an idea in my head to a proof of concept to a product that’s out there and hopefully making money. OR, on the other hand, a product that failed but hasn’t cost me too much. 

 

3:09 Defining Terms 

First of all, let me define a few of the definitions that I’ll be using. Proof of concept or minimum viable product is really the first thing you can release to the public, you can start getting feedback on. In this case, this is the first few episodes of the podcast. If you’re also a resturaunt, it might be doing a one off pop up or a stream through market. With my gin business, pipehouse gin, the first minimum viable product was creating 250 bottles to begin with and seeing how they sold. With an AMAZON FBA business that I’ll just be getting a few hundred products rather than the most  cost effective way of ordering products which is in the thousands and with the tech out that would mean just launching with the bare minimum of features. The other team were going to use is “soft launch”. By soft launch I mean you put your product out there without telling many people about it or just telling a select few. You know that the product you’re releasing isn’t really good enough for the mass market and you don’t want to ruin your reputation and you don’t want to waste money on a big market push. For this podcast, it means for the first episodes I’m not going to really tell many people about it. Then I’m going to send it out to a few select people who will give me honest feedback without hurting my feelings and I’ll know it will still be around even if its a bad attempt .With my craft gin business, pipehouse gin, this meant launching locally at local markets without telling really too many friends and family, or talking to the newspapers, or talking to big distributors.

We want to just get our recipe and know what we’re on to before we hit that really high value but also really expensive to capture targets. SO why do I suggest with minimum viable product and soft launch then. Well there are a few reasons. 

 

4:54 Why start with minimum viable product or soft launch? 

 

If you’re anything like me, you’re most excited about an idea when you first have it. I’m a real optimist, when I come up with an idea I assume it’s going to be easy. I start tracking out all the steps and I have so much energy. But then as I start researching it or thinking about it or sleeping on it for too long, I start to think about everything that could go wrong. I start to think about the problems that might happen later on down the line. OR what if people don’t like it or it’s a failure, or what if I lose money. It’s those first few weeks that I have the most excitement about the project. It’s after that, if I don’t have anything out here, I’ll do more and more research, I’ll start double thinking myself, I’ll start worrying about all the things could go wrong, I’ll read about how saturated and competitive the market is, how very few new entrants are doing well, i’ll start hearing about horror stories. I’ll also start to lose interest and start thinking about other newer ideas. Whereas if I start immediately, yes I’m going to make a bunch of mistakes, yes, I’m going release a not so good product, I’m also going to be excited about it and then when I hit the problems I’m going to solve them and I’m going to have the energy and the desire to solve them. And plus I also will get an idea of whether it’s a good idea or not really really quickly I’ve had a few businesses where I’ve got 6 months to a year  into them spent a lot of money and then discovered that it’s a terrible idea and that nobody wants it. 

 

6:43 When Sam spent 15,000 pounds on a rubbish idea 

One example I’m thinking of in particular as when I spent almost 15,000 pounds on it and it was a rubbish idea but nobody told me that because I never really got it in front of anyone. I just spent all that time working on it, paying for developers, Building Technology only then to find that one no one really understood the idea and to no one wanted it and to be honest, having a bad idea is a real risk. I think that less than 20% of my ideas that I end up trying to turn into a business are good ones. All of them I’m equally excited about and the sooner that I get them out there in front of people, the sooner I know whether they’re going to work out or not. 

 

7:18 What Brian Tracey has to say about luck 

I read a good quote this morning from Brian Tracy: “I found that luck is quite predictable. if you want more luck, take more chances. Be more active. Show up often.” And I believe the same is true for turning your idea idea into a business and then to entrepreneurship. The quicker you try then the quicker you fail or the quicker you succeed, and the more you try, the more likely you are to eventually end up with a winner. Which brings me and do another reason why it’s important for you to get your minimum viable product out there soon as possible and that is to limit your risk. I keep hearing about people wanting to quit their jobs and invest their savings and just starting a business oh, what a terrible idea that is to take all that money that you’ve worked your life for and then throw it on a Gamble because honestly starting a business is a Gamble and you can improve your odds and make it more likely. Seriously, if this is your first attempt to start a business, you don’t want to throw all your money onto it. With a small portion of that money you can get Your minimum viable product out there, soft launch it, get validation oh, and if it looks good then you can improve it. Take the feedback, incorporate the feedback, and scale up and get more validation and then improve it some more. I too well know the risk of throwing a lot of money into a business which I’m not sure is going to succeed or not. 

 

We’ve already mentioned one which cost me almost 15,000 pounds. There was another one I did which was a very simple idea: I want to start a coffee shop. So I went around and raised the money that it would cost to start it, it cost about 100,000 pounds, I’ve never started a coffee shop before. I’d never even made a cup of coffee really, not on a professional espresso machine or anything. I found a location, I spent quite a long time working on it and eventually we launched, and naive me thought: yes, this is going to be great, the contents good, I’m really clever, my ideas are good. Surely this is going to be a great success. Except that didn’t really happen. It wasn’t a success, it wasn’t a failure. What happened was the coffee shop ended up taking over, not making any money, not really losing any money, kind of scraping by. Taking up a lot of time and energy, a lot of worry, I had people who invested in it, wanting to get their money back, wanting to get their interest, I had employees relying on me for their livelihood. Eventually, I managed to pass on my stake in the business for someone who had a lot more passion for it. In the years in between, though, it used up a lot of energy and worry that could have been used on other ideas and businesses. 

 

10:12 Why Sam describes what he does as lifestyle entrepreneurship 

This is why I describe what I do as lifestyle entrepreneurship. It’s very different to build the next uber or trying to make it big on one of these businesses. Those are gambles, and you gamble a lot and if you lose, you end up with nothing. And often, worse than nothing. And most people fail. Rather, what I’m trying to do is give myself the biggest chances possible of success. And the best way to do that is by having lots of attempts, none of which would cost me very much if they fail. By starting small, with a minimum viable product and small amounts of money, and launching while you still have energy and motivation for the idea, you actually increase your chances overall of having a success.

 

Okay, now that I have hopefully convinced you of the importance of starting with a minimum viable product and a soft launch, let’s look at how I have applied this to different businesses which I myself have started. We’ve already spoken about this podcast, but let me tell you about what I plan for the future. I am going to start by releasing a few episodes without telling anyone about them at all. Then I’m going to start to get feedback from those close to me or people who I know are going to be supportive and give me good feedback. Depending on that feedback, I will either stop the business altogether, or I might go back and re record some of these episodes, or I might push them out to a bigger audience. If the feedback is good and I am getting a lot of encouragement to do more, I will up the pace at creating content. I might then start investing some money and hire someone to come and help me out or to do some production. I might start looking for sponsors to help cover its cost. I might start looking at marketing to help push it bigger. Or, i might change my idea completely or do a completely different style podcast or start doing youtube videos or start doing something else. Because I got the initial product out very quickly, pivoting and getting the idea out altogether isn’t going to cost me very much. So that’s the podcast, let’s look at another business. 

 

My most recent business that I started is pipehouse gin, which i’ve already mentioned a few times on this episode. That business took a lot longer to get the first minimum viable product out, but it was still a minimum viable product. When we were looking to start it, I ended up contacting pretty much every distillery in the country asking for help and tips and the tip correspondence I got is that you need half a million pounds and a degree in this and that and experience in the field before you can do anything. Well, i had my target, I wanted to launch, spend 10,000 pounds under, and get the first product out. It took 9 months, but we managed to do it and get that first Earl Grey Cucumber flavored Gin, which you can now see selling on my website or in local shops or through a biggest distributors such as masters of malt. And we did that by first of all, launching just 250 bottles. I mean who can’t sell 250 bottles of gin? We would sell them eventually no matter what happened. It was a very low risk investment. Then as we started to get feedback, we started to scale up. And now we’re at the point where we can go and talk to biggest distributors and start looking at international expansion and how we can turn this small, low risk business into something that’s almost destined to succeed in the future. 

 

Another example of that is my first Amazon FBA business. You may have heard of Amazon FBA. It’s the fulfillment business of Amazon, and it basically means you put your stock into Amazon’s warehouses and when you sell a product on their website, Amazon will deliver your product and then will do all the returns and customer service. It is a very nice way for a solo business person like myself to build a product based brand. You don’t need to deal with warehousing, or put it in your garage and take it down to the post office to post. Instead amazon handles all of that for you. Now the problem is when sourcing products for a new brand, the cheapest way to do that is by buying it in huge quantities. So what we did instead was we bought a small number and had some prototypes and then we started selling those prototypes and getting feedback. And as we got feedback we started editing our design and then slowly increasing our orders as demand grew. There was another business that was started with a relatively small amount of money. I can’t remember how much now, it was 2012, but I think we started with under 5,000 pounds but it has now grown up to be a very very very large business. 

 

Another example is a business I had which was importing and selling cars. I came across this opportunity that I thought was great and it was a really big difference in price between what people were paying in price in the country of malta and what people were selling them for in the united kingdom, and we both drove on the same side of the road and the cars were the same. So I thought what a great business, I will start importing cars and selling them for a very big markup and start selling them. Now the easiest way to have done this would have been to buy a big container lorry, stack it full of cars, and then drive them over and start smelling them. Could have gotten a container lorry, we looked into it, i think it was about 13,000 pounds which would have taken six cars, I could have gone and found six cars, put them in the lorry, and shipped them over there. 

 

Probably all in started for maybe 70 or 80,000 pounds. But that was not what we did. The first step was to buy just one car, which we then paid someone a relatively large amount of money to ship over for us and then we tried to sell that car. And then once that sold we found another car and did the same thing again, and then once that sold we found another car and did the same again. Where this story differs from the other ones is that this business turned out not to be worth it. This was a business that just did, the margins just weren’t really there. The business culture of buying and selling in Malta, given the amount of time I wanted to commit to it, just wasn’t worth it. And the time it took to sell each car got longer and longer and longer until we were holding stock for months and months and months. 

 

If I done the original thing, the best value option, which is buy a car, transport it, send it out there. I would have been stuck with either forcing the business to work or to lose money on it. And give up. Neither of which is a good option, I may have been able to force it and end up making money, more likely I probably wouldn’t have been able to force it only to  spend a huge amount of time on it only for it to not make money. And remember, all of the time we spend on a failing business or a lukewarm business is time we’re not spending on the really good businesses. Okay, now that we’ve covered some examples, let’s talk about the most frequent criticisms people have of this business model. 

 

17:46 What happens if someone steals your idea? 

First off, what happens if someone steals your idea? This is a pretty common question because you’re putting off your idea with hardly any substance behind it. If you think about it, it would be quite easy for a really big business to swoop in, take your idea, make a better version of it, and put it out there. I’ve never had it happen to me and I don’t know anyone who’s ever had it happen to them, but there is a risk and there probably is a small chance that it will happen. After all, anytime you put your idea out there, someone could take it and go work on it and build it. You know what, the only time I’ve ever had my idea stolen, it’s once I’ve already made a success of it and then people are queuing up to steal it. Most people are too busy with their own lives to bother with stealing your business. And if they are goign to steal it, they will steal it whether it’s big or small. Even if you spend a year, spend 100,000 or 200,000 pounds or a million, if a big company comes along and thinks of a better idea, they can come along and steal it anyway and do it better than you. You could focus on patents or trademarks or that sort of thing, but for most of the business that we’re starting, those sort of things don’t really hold much protection. Yes, if you’ve invented something brand new, a patent acould be the way forward, or if you’ve thought if some innovative change of view for something, a patent might work. 

 

But in reality, most of our businesses are just derivatives of something someone else has done. For instance, with this podcast, what could I possibly patent about it? With the gin i’m making, I’ve got the recipe, but that’s okay, people can’t steal my recipe anyway. And it’s not like I can patent it. If someone steals the ingredient combination I could be using ,there’s nothing I could do about that. And that’s the truth about how most of this stuff works. Coca cola, my patent formula, but that doesn’t mean someone like pepsi might come along and make something very similar. Another thing to remember is that we’re now dealing in a time where international business is very easy. People can make your product and ship it from anywhere, and forcing your product or patent protection is very very very difficult. Can someone steal my idea? Yes they can, but having a minimum viable product doesn’t make it any more likely that someone is going to steal it. And just because someone can steal it doesn’t mean you shouldn’t do it in the first place. 

 

20:20 Three criticisms Sam hears towards putting out a minimum viable product

Other criticism i hear with launching a not yet ready product, “isn’t it embarrassing that you’re putting something out there that isn’t very good or isn’t as good as you want it to be?” Well yes it is. Anything innovative, unique or creative is going to have some type of embarrassment. I’m particularly a sucker for peer pressure. But you know what, I think this way of doing business is actually better for embarrassment levels than for putting 100% of your energy into it, putting loads of money, and then doing a huge launch. When you’re only doing a soft launch, only a few people will see it to begin with. So if they don’t like it, you can pretend it never happened and most people won’t know about it. Second, easy come, easy go. If people say, this is rubbish, then you can say, Oh I didn’t put much effort into it. But if they said it’s rubbish after you put a year of your life and lot of your savings into it, that is going to be a lot more detrimental. And finally ,what you eventually release is never going to be as good as you want it to be so isn’t it better to get that embarrassment out of the way as soon as possible. Once you have something out there and people start reviewing it and you get good feedback and bad feedback, it gets better and each subsequent and each iteration of your product will get better and better and better, so everytime you release a new update or version, you’ll have less bad criticism than before.

 

So instead of having embarrassment each time you released a new product, you should be feeling great. The final criticism I’ll talk about is doesn’t have a negative image on your brand. This is an answer where there is a yes or no aspect to it. If I say I launched this podcast and sent an email to every person in the world and you came and listened to it and said you hated the first episode, you won’t coming back. But that’s not what i’m doing, I’m doing a soft launch, putting it in front of a few people and then improving it. The majority of people won’t have had a bad first impression because the first time they come in front of my product is when it will be developed enough to the point that I know is good. It would be much worse if I spent six months to a year working on it, release it, and not be very good but do a huge marketing push and everybody hates it. THe other thing people worry about is having failure attached to their names. This is something that I kind of get but I also think it is a really bad aspect of our culture. People want to be seen as having a non stop string of successes throughout their life. But 

 

22:52 To be honest, if your life is just a series of successes, you’re not pushing yourself hard enough. And i believe, that employment culture and culture generally is changing to reflect this. If you now go into an interview at a big tech firm like google or apple, they don’t want to just see your successes but also your failures, and how you’re able to overcome them and bounce back. I personally think that having failures in your portfolio is a good thing. It shows that you are human and how you deal with adversity when things get tough. And trust me, they are going to get tough at some point. 

 

So what should you take away from this episode. 

 

23:32 Big takeaways from this episode 

I want you to go out and start that project and get those first minimum viable products out there. If you have one or two ideas that you’ve been thinking about for years, like “oh if I have enough time or investment then I’ll do it.” Nonsense, do it now. If you started it a few years ago when you first had your idea, then you’d still have it out there. Yes you would have fallen into mistakes, but you would have overcome them. And you might just have a life changing business. And you know what, if you failed, you would have learned loads, had that experience, and have that failure on your resume to show that you can take initiative and calculated risk. I hope you’ve enjoyed this first episode, if you want to find out more about me, you can find out on sampriestley.com. If you have ideas for this podcast, then email me at