LAUNCHING A NEW BUSINESS IN 2022
“
T
he way to get started is to stop talking and start doing.”
Walt Disney shared this concise advice on how to get things off the ground and, given his track record, there’s obviously some truth to it. Thinking about starting a new business is one thing; actually starting one is something completely different. In today’s world, the rules and best practices of launching a new business can seem as disorienting and thrilling as a ride through Space Mountain. So, while the “doing” is indeed the important part, there is some thinking and even a little talking that can prove to be helpful before launching a new venture. In this article, we hope to capture a bit of thinking from some helpful resources and fans of the industry. We reached out to DSEF Fellows Dr. Sher R. Gibbs, Dr. Stefanie Boyer, Dr. Adam Mills, Dr. Linda K. Ferrell, Dr. O.C. Ferrell, and Dr. Greg Marshall, asking essentially the same question: what are the top challenges for launching a direct selling company (or any retail business) today? Their collected viewpoints provide a robust provocation for any soon-to-be founder. Clarity and Commitment Regarding Value and Audience The more things change, the more things stay the same. This cliché became apparent in the feedback from just about every contributor as they underscored the importance of clarity and focus on value proposition and audience targeting. “The most common mistake new startups make is not having a crystal-clear vision of their value proposition,” shares Adam Mills. “Successful launches ultimately aren’t about cool new products or innovative services; they’re about adding value to someone’s life by filling a need, satisfying a want, or satiating a desire. Most new businesses are driven from the inside out (product-centric strategy), not the outside in (customer-centric strategy), which is why 90 percent of new businesses fail.”
38
“Successful launches ultimately aren’t about cool new products or innovative services; they’re about adding value to someone’s life by filling a need, satisfying a want, or satiating a desire.” — Dr. Adam Mills, DSEF Fellow
haphazardly. Ironically, some firms are getting trapped into a sort of Gen Z consumer worship cycle. I can tell you with high certainty that if you decide to target solely Gen Z at this point, good luck with that! Market research is just now beginning to reveal hints of what the longer-term trajectory of this generational group might look like as consumers, and it is very likely that as they evolve, even in the short term, a company’s offerings will have to work hard to keep up a high level of relevance to them.” Sher Gibbs points out that companies must also account for diversity in their targeting, as well as their hiring, as they set out. “We live, work, and operate in an increasingly diverse world with a similarly diverse customer base. Startups should note that small businesses that value racial diversity and create an inclusive organizational climate from inception can increase competitiveness, performance, and longterm survival (Sequeira, Weeks, Bell, and Gibbs, 2018). Boycotts of brands such as Tommy Hilfiger and Dolce & Gabbana demonstrate that companies that fail to exhibit racial sensitivity will suffer dire consequences. These issues can be avoided if companies hire corporate staff and distributor salesforces who reflect their customer base.”
Linda and O.C. Ferrell agree, noting an all-toocommon mistake made by launching companies: “Not understanding the market and what consumers need and want. Just because you can source or produce a particular product does not mean there is an accessible market with the needs, means, and desire for the product.” Stefanie Boyer adds, “Another challenge is going after everyone rather than creating buyer personas and strategically selling to those profiles using different approaches. Using a one-size-fits-all approach doesn’t work.”
Clarity around messaging and audience sounds so simple, but it’s a challenge that has snagged many direct selling companies in the past. The reason? We’re an industry that relies on the emotions and motivations of a volunteer salesforce that is also marketing a tangible, feature-rich product to our chosen target audiences. “We need to stop getting hung up on minutia,” warns Mills. “It’s easy to talk about product features, bells and whistles, nuances of compensation plans, and so forth because they’re all tangible. It’s harder to talk about dreams and help someone become the person they want to be — it’s intangible, elusive, mysterious, and harder to figure out. But that is the key to conversion. It takes a lot of work that nobody wants to do.”
Targeting alone is not enough. It’s something that needs to be done correctly, as Greg Marshall explains: “One common mistake is to over-target one generational consumer base versus another. The core concepts of market segmentation are still totally valid today but can be self-limiting if implemented
Technology and Social Media Technology and social media have a massive impact on the launch of any new business. In most cases, everything that was out of reach not so long ago for a young company is now accessible. While commitment and clarity surrounding value proposition and
Spring 2022