By Vanessa Ting
Man, this is meaty topic. In my 15 years in the consumer product and retail space, I’ve seen a lot of product companies thrive and fizzle. And I have my own tech product entrepreneurial experience to draw from. Needless to say, I have strong opinions on this topic.
I would agree with Romy that being Strategic, Persistent and Accountable are all traits critical to success. I would add the following three traits to that list.
1. Bias for Action – As they say, anyone can have an idea but execution is king. Execution is what sets your idea apart from competitors.
The first line in the job description of an Entrepreneur should be “problem solver”. Every day on the job, you’re faced with different problems to solve. The first problem you solve as an entrepreneur is the one your very own product provides a solution for. And this problem solving continues with putting out fires and blocking and tackling all the issues that arise in your day to day operations. So being solution-oriented is an important trait to have as you embark on the marathon of entrepreneurship.
And by the way, retail buyers look for vendors who are decisive, can anticipate problems, come up with 3 solutions to each, and execute the solution seamlessly and without delay.
2. Quantitative – Be numbers-driven in every decision you make. You don’t have to be good at math. Just be comfortable enough with it.
Many companies make poor financial decisions because they never “ran the numbers”. That will always be my “go to” response for any business decision made. I’ve seen entrepreneurs price their products too low, thereby squeezing their own margins making it virtually impossible to continue their business. I’ve seen companies agree to high costs of goods without any thought to how it might inflate their retail prices and end up sitting on inventory that no one wants to buy. I’ve seen vendors agree to markdown coverage that results in them earning no profit on a wholesale order. I can go on, but you get the idea.
As a buyer, I would avoid working with vendors who did not show their ability to crunch or analyze numbers. Even now, I shy away from clients who don’t demonstrate this competency. It sets no one up for success. This trait is crucial.
3. Long-term focused – Being long-term focused means making decisions that won’t close doors on opportunities in the future. It means making decisions that are good for the long term health of your company, even if it means making less money today. That may seem like it contradicts my point above about “running the numbers” but it doesn’t. Being long-term focused means evaluating not just one, but multiple data points before making a decision. And among the multiple data points you will consider, one will be the numbers you run. Another data point will be the long term effect on your brand or business. And there will likely be many other data points to consider in combination with these, such as the interests of your investors or your exit-strategy. Being long-term focused prevents you from making decisions in a silo.
Making decisions in a silo happens a lot. Here is a dramatic example to illustrate my point:
Many first-time product companies don’t know to manage their pricing and product portfolio across various retail channels (google: Channel Management or Channel Conflict). They’ll sell the same product with the same price at Nordstrom as they do at Target. And while they will make more money today selling in both stores with the same SKU, they will soon begin cannibalizing their own sales at Nordstrom and eventually lose Nordstrom as an account. At the same time, no other prestige retailer will want to work with them either. And if their volume and profitability at Target and other mass channels can’t offset the profits they lost by eliminating the prestige channel…well, you see where I’m headed. So don’t make short term decisions that bankrupt your money-making opportunities for the future. Be strategic, like Romy says, and anticipate how your decisions will play out over time.