CEO Update: The 90-10 Rule Every Potential Entrepreneur Should Consider Before Launching Their Business
Today marks our 24-month anniversary since we launched BlueCart. By most standards, we have not yet completed our mission, but we continue to find meaningful clues indicating that we are headed in the right direction, such as having thousands of business users, starting to make money, and raising $7M in venture funding.
Soon after launch, we realized that the success of a venture can be attributed to 90% implementation and 10% on the value of the idea. As with many other entrepreneurs today, we actually thought it was quite the opposite!
We had a great idea (10%): to turn a massive multi-billion dollar industry on it’s head: changing the fundamentals of the way people do business in the hospitality industry, resulting in a dramatic drop in inefficiencies and creating tremendous value for all participants. By any standard this is an award winning idea! We won every possible business school competition in Georgetown’s MBA program, flew to international business school competitions, and even won the DC Tech Awards with just one transaction on our platform.
Yet, we were completely unaware of the 90% that needed to follow the 10% “Award Winning Idea.” The 90% represents:
• The grit required to keep on working after being turned down by 84 VCs in a 6-month period, and dwarfing Jeff Bezos’ 60 “no’s”. But persistence paid off and the first two “no’s” we received lead to our $4M series A round 6 months later!
• Realizing the nonsense behind the “build it and they will come” idea and discovering that a product “going viral” is the result of a carefully designed sequence of steps, not the sole result of it’s value.
• As much value as we thought we had created, we had a 2 month “Trough of Sorrow”, where we had hundreds of “potential” users, but not a single transaction!
• BlueCart’s first transaction came after “persuading” a chef to use our free app with a $10 Starbucks giftcard!
• We had to teach ourselves how to do anything that needed to be done, and I mean ANYTHING. From social media, to cold calls, to contracts; I even had to learn basic code to develop the first version of the app.
The idea (10%) is definitely useful! It was enough to motivate our team to persevere with almost no pay during the initial 6 month period, after maxing out credit card after credit card without any revenue.
Every month, we are absolutely thrilled to receive requests to discuss potential venture ideas with future entrepreneurs, and every so often, we receive one of these guidance requests with an NDA attached. At that point, we recognize that this entrepreneur has not yet realized the 90-10 rule and is in for a wild ride. The word difficult doesn’t even begin to describe starting a business. Realizing that it’s unlikely that anyone will drop everything they are doing to pursue the entrepreneur’s idea will save a potential entrepreneur from stress and sleepless nights. Trust us, we’ve been there.