Are Entrepreneurs Crazy!!! Can you hang around for a few years to find out?
Here are two extreme examples of why you hang on to your vision as an entrepreneur. Don’t second guess yourself, cause as you will see, if you read on how things have changed, and continue to change as we progress into a complicated future!
Let me take you back to about 25 years. You are a young entrepreneur, and you have some great ideas that you can’t wait to work on. One idea seems to always come to mind and you’re deciding if it is a daydream or could it become a reality.
So you start asking a banker friend, “How much water do you drink, oh let’s say in a day?”
“What?” They ask. “You know what I’m saying. How many times a day do you get a glass of water and drink it?”
“Did you bump your head or something?”
“Come on I’m serious.” You say.
“Okay, okay, maybe one glass a day if I’m thirsty. I never really think about it.”
So you ask “What about if you’re outside somewhere and you get thirsty. What do you do?”
“I go and buy a soft drink or juice or coffee. Why?”
“What if you could buy a bottle of water?”
Looking puzzled he said, “You mean like fizzy water like that imported stuff, or tonic water or something?”
Shaking your head you say “Nope!” “Just plain old refreshing, filtered water.”
“Do you mean like tap water?”
“Yeah kinda like that, but specially filtered, so it’s very clean. Also, it tastes the same no matter where you buy it.”
“Okay, where would you sell this bottled water?” “Everywhere!” “The corner store, the grocery store, heck even in restaurants! Places like outdoor food trucks, bazaars, heck anywhere people get together.”
“Alright, let me get this straight! You want to sell me bottled water. It is filtered, so that it is clean, and it tastes the same no matter where I buy it?” “Just like the same water that comes out of the tap, that’s already filtered and monitored and cleaned for us to drink?”
“Yeah, that’s right.”
“Okay, I will play along.” He said. “What would you charge for this bottled water?”
“Oh, I don’t know, maybe a buck or two.”
“A buck or two? Are you crazy or something? You want to sell us something that we could get out of the tap for free???”
You try to hook him with this! “Consider this, you don’t always have water when you need it, like when you’re out or at the park, or jogging or just going for a walk.”
“So what!” He said. “I can carry a thermos or some plastic bottle filled with fresh, clean, and free tap water.”
“I suppose you can, but will you?”
“Of course, I would. Why wouldn’t I? I carry water for the kids when we go to the park, why wouldn’t I carry it for myself?”
“What if you didn’t have water and the kids were really thirsty? Would you buy them soda and/or juices?”
“I don’t know, I guess so.”
“Well then if bottled water was easily available, would you buy them that? Wouldn’t you say that it would be healthier?”
“I supposed so, but there is no way, that I would pay a dollar or two for something I could get for free. No, I don’t think that would work. Nice try though!”
That is the conversation that some entrepreneur had with his banker a few years before the craze for bottled water started and is a multi-billion dollar business today.
Conclusion:
Bottled water is big business and it doesn’t seem to be slowing down. In 2020, the bottled water industry raked in over $11 billion in revenue. That number is only going to go up as the world becomes more and more concerned about the quality of their drinking water. Was this a crazy idea? At the time sure you could say that. In reality probably not.
Another Crazy Idea!
After being turned down for that idea he thanked Heaven that the person he spoke to was his friend and not some corporate presentation. Otherwise, he was sure he would have been escorted out of the bank by his collar and thrown out!
This next idea started out simple enough. Again he is talking to his friend the banker.
“How much money, “he asked” could I get to start a for-profit thrift store? Specifically, a storefront, located on a major street, maybe in a mall. It could be a standalone store, but it would have to have 20,000 square feet of space or more.”
The banker replied “Let me say this…A thrift store on a major road in a mall as one of its bigger tenants would pay upwards of $20,000.00 per month rent, plus, plus. How much used clothing and trinkets, would you have to sell to make a profit?”
“But…but” you stumble,
“Let me finish.” He replies. “Have you thought about this…
1. “How would you price your merchandise, and where would you get it?” “20,000 square feet of store space is a lot to fill!”
2. “What do you know about selling used clothing and articles?” “Is that something you picked up at a garage sale?”
3. “How do you know what would be a good selling item?”
4. “If you found a best-selling item and I doubt you could, how would you know if you could get enough stock, and replenish it every month?”
“I could ask you twenty more important questions other than these four.” “I think that you will not find anyone, in their right mind, to invest in your crazy idea.”
“I don’t think it’s crazy, and as far as stock is concerned, people would just donate to me for free. Or at the very least, I would pay pennies for stock, from churches, goodwill, and other thrift shops.”
Imagine having this conversation with your banker?
So again in hindsight, was this banker an idiot for turning this entrepreneur down?
Today what do you find almost in every major city? A Value Village, smack right in the middle of a major mall and on a highly visible roadway. Where I am sure, the rents are over $20,000.00 per month. Selling used clothing and used furniture and trinkets.
Did this banker blow it, or was the entrepreneur just ahead of his time?
I am paraphrasing the attorney general of Washington State who has claimed that the largest for-profit thrift retailer in the world, has more than $1 billion in revenue and 330 locations.
Food for thought:
The success of one entrepreneur hinges on how they think, and what they do.
Some entrepreneurs will fail because their business approach is not sustainable; others may succeed due to the uniqueness of their product or service. Successful entrepreneurs are those who have a strong vision for themselves and an understanding that failure can be part of any journey.