One of the big benefits of service marketplaces like Tutorhub, Airbnb, Uber or Thumbtack, is that they provide service providers with an extra income source and permit a great deal of flexibility in when, how and where you work. It’s a way to work on your own terms.
Whether it’s freelance professionals on Thumbtack, drivers on Uber or teachers at Tutorhub, the ability to dip in and out of extra work has become a really popular way to meet unexpected expenses, pay for a special trip or to maintain a steady income as other income sources become unstable. In a way, it’s the new way to save. Rather than hold back a percentage of my regular income for those inevitable ‘rainy days’, I can just get out there and get stuck into a second job when the need arises. I occasionally take the Uber car service and it always amazes me how positive the drivers are. Most of them give the impression that this isn’t a job they have to do, it’s something they genuinely enjoy. We see that with many of our teachers and tutors at Tutorhub. On the one hand, it’s a great way to earn some extra income, but you can see that sharing knowledge is something that comes naturally – it’s a joy to teach, not a chore, another aspect of the sharing economy.
But whilst the financial element is important, it’s the ability to feel in control of your own destiny that stands out. You don’t have to be there at 9 am every day. The only routine is the routine you set. Somehow it seems to fit with the more natural rhythm of how we want to work. Pre-industrial revolution, people didn’t work 9-5, 5 days per week, with annual holiday. Those terms were set by the original factory owners for whom it was more efficient to have everyone there at the same time. Artisans worked when they wanted or needed to work. Sound familiar?
Something is afoot in the world of internet business models. There seems to be a sudden increase in the number of people selling internet products … door-to-door.
Almost all of the products on offer have been ‘food services’ on subscription, companies like Hello Fresh and Flower & something-or-other. In principle, it’s a very direct way to recruit new users; once you know what the customer lifetime value is, a simple calculation yields your commission rates etc. Most of the companies seem to be using university students or school leavers as the basis for an enthusiastic salesforce, which is no bad thing and probably works for both parties. It keeps costs down for the provider and it’s a valuable commercial education and handy extra cash for the sales team.
I’m tempted to keep a record of how many knocks on the door I get. If the business model works, I’m assuming I’ll see more on my doorstep. If it doesn’t, the modern day Willy Lomans’ will go the way of Arthur Millers fictional character and once again we’ll see the death of a salesman.
“You should stick to your knitting” is a slightly odd phrase, particularly in an age when even the hipsters aren’t knitting (cue torrent of statistics proving that knitting has never been more popular). In a business sense, it usually means working out what you’re good at and sticking to it or in the business school parlance, defining your core competence.
It sounds like a great idea, but as with most things, the real world doesn’t work that way. Despite the common sense that you should stick to your knitting, there’s always pressure to move into fields that are ‘hot’ and generate investor interest.
Microsoft is a great example. Despite creating one of the greatest technology franchises in history with WINtel, they’ve always struggled with that whole internet thing. It never felt like their ‘knitting’. They just weren’t cool enough. Despite great effort, first with IE and then with Bing and a whole multitude of other products, they’ve always been on the back foot with the web, even though they’ve been quietly making piles of cash from SQL Server back ends, .NET web developments, Azure and the like.
Recent announcements show they they’re quietly withdrawing from businesses like programmatic display advertising and maps. Common sense suggests that Microsoft made a mistake in getting into these businesses (mainly through acquisition), but that overlooks the original clamour from investors to get into these areas when they were considered fast-growing and cool. Perhaps getting involved in these areas is a way of showing that you are willing to listen to investors, even if you think they’re a fad-driven bunch. Generating lots of cash from your core businesses and putting a slice of it into new areas isn’t exactly sticking to your knitting, but it does make for a quiet life.
Perhaps we should modify the saying, “stick to your knitting but don’t be afraid of a bit of embroidery on the side”. Or maybe not.
When you start a business, you take a giant leap into the unknown. Some of the questions you will be asking include whether there is a market for what you want to offer, how much are people willing to pay, what technology is required.
It’s a thankless task – one thing you can be sure of is that most of how you think you know about the market, technology and your business will be incorrect. Worrying isn’t it?
As someone who has been through this process, what tips would I pass on to budding entrepreneurs starting their adventure into start-up land?
My advice falls neatly into A, B and C. It’s not based on a 2×2 Business School matrix or consultancy jargon, but it’s what I think is important.
I think that the important things are: assume nothing, believe only what you know to be true and challenge everything.
One of the biggest mistakes you can make is think at the outset that you understand the market, and know precisely what customers want. This will not be true. Assume nothing – start by asking yourself the key questions what, how, where, when and why. Keep on asking these questions until you get down to what’s really going on. Don’t rely on Google – get off your backside and ask those people already consuming and providing the service or product in the market you are focusing on.
My best advise is to build a set a business assumptions – which taken together become part of your hypothesis of how your business will work. Be prepared for this to take weeks – no shortcuts.
The lean start-up fraternity use terminology such as customer and market hypotheses, which lead to the development of a Minimum Viable Product – something that people will want to buy.
Believe only what you know to be true
Be careful not to take what people tell you as true. Sometimes they are plain wrong, or have hidden agendas. Google can be a nightmare in this respect – just because someone says it’s true, don’t take it as gospel.
My best advise is to triangulate information. If three unrelated parties come to the same conclusion, then the chances are they may be correct. Only when you have your own data can you come to an informed decision on the validity of the data.
You are constructing a neat model (spreadsheets come into their own here) of how you see your business idea operate and make money. The most important thing is to continually check each assumption in the model. This challenge process needs to be evidence based: quantitive (from your website and Google Analytics) and qualitative (via verbatim feedback).
Follow these tips and you will stand a fighting chance of getting your business off the ground. Don’t follow them, and you need to hope that you are one of the very few businesses that get it right first time.
If you take my advice, don’t leave it to chance, remember to run through the A, B, C for your start-up.