Ask the Entrepreneurs: Overlooking the "Mousetrap Fallacy"

[Note: Students in the Entrepreneurship program at Simon have submitted a number of questions and we encourage you to ask yours via the form on our Home/About page. We'll have one or more of our bloggers offer their takes — which should provide starting points for your thinking and more discussion.]

Question: Having successfully run a business for several years, what are one or two difficulties in starting a business that many budding entrepreneurs overlook or fail to consider?

"If a man can write a better book, preach a better sermon, or make a better mousetrap, than his neighbor, though he build his house in the woods, the world will make a beaten path to his door."

—Ralph Waldo Emerson

To me, it is this famous “mousetrap fallacy” that leads to the doom of thousands of start-ups every year. It seems to be particularly common among the aspiring “high tech” entrepreneurs. Some engineer or scientist develops some new widget that does this really cool thing but they have no idea whether or not there is any potential need or demand for the product.

I would state it simply and strongly: Don’t even start consider starting a business until you have a marketing strategy.

It just doesn’t matter if the gizmo that you have invented is really cool or if it uses highly advanced technology or if it is really new-to-world stuff. Unless the CEO/Founder knows

• who the customer is
• whether or not "it" can be produced and distributed at a price that the market will accept
• and whether or not it truly fills a need

the business is probably going to fail.

Starting a business also requires a full understanding of the strategic plan. Since starting My Brands, I have met with hundreds of students, prospective entrepreneurs, and current entrepreneurs. From their stories and mine, I've learned that you need to answer many basic questions such as:

1. What about my product is unique (differentiates) us from the competition, potential competition, or substitutes?
2. Can I produce the product or service at a price that people will pay?
3. How are people going to hear about my product/service?

The secret to success is no secret at all! It is taught in Marketing 101 courses everyday. Do your homework!