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Before You Launch a Startup, Clean Out Your Garage

Learn why you should pursue a “soft” launch verses a full scale "brick-n-mortar" launch on Main Street.

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If the entrepreneur agrees that the task differentiates their business, but is not critical to the daily delivery of their product/service, I instruct them to invest and reinvent the task. Apple is a great example of a company that reinvented mobile computing from a differentiated technology into a Slingshot capability.

Conversely, if a task does not differentiate the business and is not critical to the daily delivery of your product/service, small business owners must seek to outsource these activities.

Trust me, there are too many entrepreneurs who are part-time experts in payroll and accounting software –technology that has nothing to do with their core business.

When a task is critical to the daily delivery of your core product but does not differentiate your business, entrepreneurs should invest to make this task a low cost activity.

For example, McDonalds doesn’t make Coca-Cola, but it is critical to the daily delivery of their product. McDonalds continuously invests in drink carousel technology to minimize the labor needed to offer up cold beverages with their hamburgers.

Finally, tasks that are critical to the daily delivery of your product/service and that differentiate your business are the seeds of a Slingshot capability. Consider how Amazon.com built its business around providing world-class distribution service. Today, Amazon.com generates millions in revenue by offering “Fulfillment By Amazon” to world-class Fortune 500 companies and startups.

My business partner and I used this framework during our last startup and worked out of our respective garages until we reached $1 million in sales. We conserved every available dollar and invested in a Slingshot capability that eventually catapulted us to $10 million in sales.

Before you launch your business, clean out your garage.

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Mark Anthony Peterson is co-founder and co-chief executive of Ereptus, Inc., a Buckhead, GA-based mobile retailing software solutions company. Ereptus developed RESCUE Consumer, an app designed to create “digital” word-of-mouth marketing for small market retailers. Peterson is also author of Guerrillapreneur: Small Business Strategy For Davids Wanting To Defeat Goliaths.

 

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