By Professor Mark Werwath
We live in amazing times. It seems everyone is focused on becoming an entrepreneur, and there is a good reason. Perhaps never before in history has it been this easy to start a business. If you have goods to sell, it is easy and simple to set yourself up as a merchant on Amazon or eBay and sell products directly to your customers without ever setting up a brick and mortar business. No rent to pay, no build out costs, no landlord to negotiate with, no long term leases, down payments, or credit checks. You pay only for what you sell and you pay for setting up your web presence on a month-by-month basis.
Thanks to Amazon web services, there is no need to build a server farm—you can have your website or application hosted on a highly reliable hosting service on a pay-as-you-go basis. These guys will even help you build your site! Of course, that story is several years old at this point and almost not worth mentioning except the good news just keeps on coming. There are now ways to profit from your business idea, concept, or spare capacity without following the traditional approach of design, finance, and build (without first knowing if the market is really there).
Take Indiegogo for example. Don’t have the capital to build your product? Why not overcome the cash barrier by posting an Indiegogo campaign? Indiegogo allows you to sell product before it is built. While your customers know it is risky, therein lies the fun as your initial customers are the pioneers and early adopters and usually wish to have the latest greatest product. They also just received $40Million in second round funding. One project raised over $1 million to build a museum dedicated to Nikola Tesla.
Here are some more examples of solutions in today’s world:
- QUIRKY: Submit your design and earn royalties if it goes to market. No need to manufacture as Quirky takes care of that for you. You share in royalties from your design! You never have to finance or build or go to market to generate a revenue stream!
- Threadless: Crowd sourcing for T-shirt design combines art and entrepreneurship. If your design is selected for production, you participate in the revenue stream of that product’s sales.
- ETSY: This is a craft based marketplace similar to eBay or Amazon but for artisans. Sell your handmade goods in an artisan’s marketplace.
- Shopstarter: crowd-funding geared toward projects and businesses
- Taskrabbit: Connect with people who have odd jobs to get done around the house and get paid as you go.
- Airbnb: rent out spare rooms in your home on a night by night basis. Reviews and ratings give you some assurance of quality and safety.
- Relayrides: If you have spare capacity in your car, why not rent it out and become a car rental agency of your own, in your own neighborhood.
- Uber: Willing to drive people around like a cabbie? Here is a way to connect up with customers who are looking for rides in your area and are willing to pay for the ride.
The list changes every day, but this brave new world opens up the possibility for nearly all of us to become entrepreneurs in our own homes. While it sounds exciting, I am sure the old adage of buyer beware still applies. In some cases above, it is not clear how government regulation will affect our ability to exercise all these options in the years ahead. For example, Airbnb, mentioned above, ran into recent problems in New York in regards to avoiding hotel taxes. And while Kickstarter campaigns allow anyone to reach a much larger audience, the work involved requires a great deal of planning, promotion, and the sometimes ego-draining task of asking a lot of people to give you money with no real guarantee of a pay off.
As new spaces for innovation and outreach open up every day, they can quickly become crowded places and it can be challenging to stand out from the noise. This is where we fall back to the basics of effective marketing, branding, and, of course, creating a great product. Despite the challenges, in many ways, these seem to be very interesting times for the entrepreneur!
Did you know that Northwestern was ranked #1 school for entrepreneurship by StartEngine College? Read more here and discover how even as an MEM student you can benefit from all Northwestern has to offer for entrepreneurs.