Startup should obey supply and demand rule
For many of us, starting a business is a good thing to do in life. Business can offer a nice living standard, solving money problems and bring more opportunities. But building a business from scratch is hard and the failure rate is very high. Statistics indicate that over 90% of businesses fail after five years.
If we know the principles, we may reduce the risk of failure. Here is the principle: A business is a Public Office, serve many customers who need and therefore support to sustain the business. The key is maximizing the value offering to customers at the lowest possible cost and obey supply and demand rule. By this way, customers will love the Business and go extra mile to keep the business exist.
Based on that principle, one can create a product, sell goods or start a service. We will consider these three options:
Option 1. If you can start a product or several of them that offer truly high value and you can sell as fast as you can in the sizable market. This is a great choice. You can make Big Money and enjoy your creative work simultaneously. However, this path is risky too. Because you may not know for sure that the market needs your product while you may have to spend many months, even years to create product. To reduce the risk, you should embrace Lean Startup method. It helps you test your ideas and products quickly before you invest heavily into making products.
Option 2. If you cannot or do not want to create a product to sell, then you can sell others’ products as Walmart or Nike (at the beginning) or Amazon. The good thing following this way is you can start immediately, possibly at low upfront investment. What you need to do is find the need in the market and search for suitable products to sell, obey the supply-demand rule and avoid competition as much as possible. If you can find this match quickly, the chance to make money is big. This selling pathway offer you various options, you can sellect many products and sell. You do not have to wait until you create your own products and sell. Of course, you must decide whether you want to sell your products or others’.
Option 3. If you do not want to follow the two pathways above, you can offer doing services to others – personal services or corporate services. In this pathway you must have some unique skills that valuable in the marketplace. In other words, it is your competitive advantages as an individual. You may as well assemble a team to do services, but you still must possess some special skill sets that good and competitive.
In all pathways, the fundamental is to Maximize the value to customers and to Minimize the cost of doing business, obey supply-demand rule. By this principles, one can sustain and grow the business.