In the mid 80’s, when Bill Gates and Paul Allen’s vision of a computer on every desktop and in every home was emerging as a reality, I was running a specialty retail store. I sold wood burning fireplaces, hot tubs and all of their accessories. Flying back to Baltimore from one of my business trips for the store, I had struck-up a conversation with the gentlemen sitting next to me. It turned out he was in the floor covering business.
Our discussion led us to realize our retail operations and services were very similar. We both managed:
- Retail space
- Warehouse space
- Service, instillation and maintenance crews
- Products that needed feature and benefit education to the consumer
Diving deeper into the discussion, I explained to him that I was developing a flow chart to support my business initiatives.The exercise was driving my thinking about developing some type of software for my computer to manage my operations more efficiently and maybe even help customers in the decision process. Now a day, my concept would be referred to as “Point of Sale” or POS software. It’s similar to what you experience in any cell phone retail store.
He liked the idea and thought the software system would also make sense for his business. As it turned out, his two daughters had just graduated from college with computer science degrees. He was certain that they could work with us to develop the application. It seemed like the universe was aligning, and as the flight touched down, we decided to join forces to figure out how we could make this concept come to fruition.
As we moved through the process of developing the software, we had the opportunity to present it at the Wood Heating Alliance’s annual tradeshow.We finalized the demo of the software right before the big day. To showcase the software we had a large kiosk set-up in the middle of the conference’s main showroom. We demoed it from early in the morning on day one, through to the late evening on the last day of the show. Throughout the show our space was besieged with attendees trying to take a peek and test it out for themselves. The buzz and response were amazing. However…we didn’t close the deal, no purchases were made during the tradeshow.
As the year passed and we ventured further into “selling” the software, it became apparent that our two industries primarily consisted of small family owned businesses.The cost to have the software implemented in these stores meant first investing in the hardware and then in training staff on how to use everything. This was a huge ancillary cost that no one was willing to undertake at the time. There was no track record with the software and they weren’t willing to accept the uncertainty.
As we kept pushing our product and meeting the same challenge, the decision to fold our company came as quickly as we started it. The industry was just not ready for our software. It was a dead end.
Or was it…
Looking back now, there are lessons to be learned from this venture:
- We should have researched the marketplace upfront
- We gave up too early – It was a strong idea and if given a little rethinking coupled with strong research, could have excelled possibly in another industry where the hardware was already in use and a need for the software was the next opportunity.
My advice to any business leader on the verge of developing the latest tool to revolutionize your business or industry is to remember to think as practically about your strategy as you do your product. We had most of the technical kinks worked out – but what does a working product mean to an audience that will not invest the time and money to implement it? Quality market research sets the foundation of how you should move forward with your strategy and market your product. In many cases, market research will not only help you recognize potential competitive advantageous, but also help you evaluate risks and roadblocks early on. Knowing this key element, may save you a lot of time and money in pursuing your vision.