I met with some new ventures this week.  OK.   I met with some folks with ideas for new ventures.

One of the first things I reminded them about is that business is operational- not asperational.   That means one starts a business- small or large- by making things work.  Getting cash flow.  Trying business models to see what works.

Oh, sure you’ve read about those ventures that have been funded with absolutely nothing to show.  But, that’s not totally true- they have something.  Code that works, even with errors,  so you can see what is being offered.  New pharmaceuticals that need to be proven.  New battery designs.

Years ago, when we wanted to change the premise of a whole company, we based the rebuilding on one product that already existed.   Sure, it was an outlier for the firm’s current business.   But, it meshed with the new vision and mission that the corporate administration and those of us (no one knew the term skunkworks back then) who were planning to build this new division.   And, now, decades later, that firm exists on the new backbone we developed.  The company’s original premise, the one that kept it in business for a century- long gone.   Because we built products and processes, tested our models, and refined things, as we went along.

When we started a brand new company, one that was to offer a product in a market segment that did not exist until we sold our first unit, we started small.  How small?  Our first batches were 50 liters.  First, because we weren’t sure how we’d scale up production from our test batches.   Second, because we didn’t know how much we’d sell.  (O.K.  It was pretty clear we’d be selling 15 of those batches a week- at least.)  But, since each 50 L batch took less than an hour from start to finish, we could live with that.   By the end of the second quarter, we were already making batches of 250 liters- four times a day.   Within a year,  1000 liters a batch, once or twice a day.  To reach 4000 liters, thrice daily in multiple locations around the globe.

But, we were operational- and asperational.  Sure, we hoped to sell 10,000 liters a week (we were selling that much a day by the end of year 2)- but we kept refining our production, our business model, and improving operations.   We didn’t wait for that magic pot of gold that would let us become megaproducers before we started.

The first Osborne computer runs, the first TRS-80’s- all of them started small.   So did IBM.  Which began making it’s PC-Jrs using skunkworks.  Way, way distanced from the normal operations of the IBM business lines.

The trick is to get it started.  To paraphrase one of my favorite movies- “build it and they will come”.   Especially if what you build is the best things since mom’s apple pie- at a reasonable price.

So, what are you waiting for?

 

By the way- the blog title?   That was a catch phrase of Arthur Lipper, a venture capitalist, a business promoter, the publisher of Venture Magazine, the genius behind the Association of Venture Founders, and my friend and mentor.