I’ve had to sit through a lot of painful business idea proposals. My job isn’t to cut people off, but to listen. No eye rolling or sighing, because there’s a nugget of a good idea in every pitch, no matter how bad. After listening to so many of them, I now have a theory of how to bucket them into various categories:
1. The Dreamer thinks his or her idea is original and is sure that just getting it up and running will lead to success.
This is the easiest way to lose money – or, in very rare cases, to make it. This person is usually a first-timer. Hey, it happened to me. Back when I had hair and a six-pack, I thought that I’d make a fortune selling car seat covers made from New Zealand sheepskin for cold Canadian butts. I had spent a lot of time in New Zealand and came back with sample pelts to show car dealers. I started my first company and sold exactly 18 covers, but not until I had 600 to 700 pelts in inventory. I went under and a lot of people got really cheap sheepskin rugs for their dens.
2. The Copycat sees a product or service somewhere else and only wants to change it slightly to adapt it to his or her market.
This often happens if you’re travelling abroad, you’re relaxed and you see a very cool finished product or service. You talk to the owner, and he or she offers to guide you in exchange for a small interest in your Canadian business copy.
Copy-and-paste businesses like this often work. My favourite story is about Steve Gunn and Christine McGee of Sleep Country Canada. You’ve probably heard Chris on radio ads, but it was Steve who approached the folks at Sleep Country USA, a West Coast distributor of sleep sets, in the early 1990s.
In those days, mattress retailing in Canada was often sleazy. Many retailers would do the switcheroo for a cheaper mattress, then be out of business by the time the buyer noticed.
Steve is an engineer, and early in his career he did conductivity tests for oil wells. Chris was a banker who loaned money to entrepreneurs to start businesses. How did Steve jump from corporate life to entrepreneur? “I was working for a company and getting lots of job offers,” he says. “That gave me the confidence to take some risk.” That’s called a backup plan. If you think you can get a real job even if your new business fails, you’ll probably start one.
An element of the unusual or exotic often adds to the appeal of a copied business. Peter Chaisson, a Toronto competitive bodybuilder, and his business partner, Eric Seifert, a sports training specialist, have struck gold with a formerly controversial therapeutic technique developed by Greg Roskopf, an exercise physiologist in Denver. Peter and Eric were among the first pupils to learn muscle activation, Roskopf’s treatment for injuries.
Back in Toronto, Peter and Eric started Core Strength, a treatment service in which they and their team assess injuries and apply pressure to activate muscles. Sound weird? So did Acai berries when I first heard about them. I went to see Peter for a chronic back problem. His business is off-the-charts busy, and it’s not even covered by medical insurance. I want to be this Copycat’s business partner.
3. The Kamikaze feels he or she has nothing to lose by trying a business idea.
These folks have the best stories and get almost all the press. Maybe it’s someone who’s just lost a job. They’re the guys and ladies (mostly guys, because they usually have the idiot risk gene) who just start building something. Robert Kalin and his partners did it with Brooklyn-based etsy.com, a site they founded in 2005 to aggregate craftspeople and sell their art, clothing and other knick-knacks on the Internet. There was nothing to lose. Last year, Etsy’s revenues totalled more than $300-million (U.S.).
Artists and creative types are by far the biggest bunch in the Kamikaze category. Brothers Carlos and Jason Sanchez came out of art school in Montreal 10 years ago with a vision of taking large, elaborate staged photographs of uncomfortable subjects and situations. They also figured their chances of selling work were better with Europeans, whose tastes are more “out there.” So they found an art dealer in Amsterdam. They also ate canned beans (no wieners – it’s much cheaper to be a vegetarian when you’re broke) for years.
Yet the Sanchezes persisted, and they’ve crafted a business that now includes custom installations, video direction and performance art. They’ve been lauded as visionaries in American Photo and have landed Nicholas Metivier, the Toronto-based superdealer, as their agent in Canada. But be warned: to achieve their success, they needed the stamina of a blood-doped Tour de France racer and the determination of a religious zealot.
None of these three categories is a surefire winner. I like to hear proposals from Copycats, with a bit of Dreamer and Kamikaze thrown in. The best new businesses are usually the ones you do for yourself based on your hunch that it was right, and with help from someone who gave you a head start by proving out the concept. And if you have squat to lose, so much the better.
Doug Steiner has a real job in the financial services industry in Toronto.
This article originally appeared in the October issue of Report on Small Business magazine.