You can work yourself into the ground and still not know why your business is failing

In my last column, I wrote about Winetux, a product designed to help keep a bottle of wine cool on a warm summer night that I started selling when I was 21 years old.

I spent a couple of years trying to make the business work. I travelled, attended trade shows, made cold calls, met with investors and kept pushing because I believed hard work would eventually pay off.

Looking back, I should have spent more time asking whether enough people actually wanted Winetux and whether I could make money selling it. But there is another question I should have asked.

What if the idea wasn’t the problem?

What if the problem was me?

That’s an uncomfortable question for any entrepreneur, but it’s an important one. A good product can fail because it’s priced wrong, marketed badly, sold to the wrong customers or offered through the wrong channels.

When sales are disappointing, it’s tempting to reach one of two conclusions. Either the idea is terrible and should be abandoned, or the idea is brilliant and we just need to work harder. I certainly leaned toward the second one.

If I had Winetux sitting in front of me today, I would start with the customer. Who was really going to buy it? A wine drinker? Someone looking for a gift? A restaurant? A winery? A liquor store? Someone going on a picnic?

At 21, I was focused on selling Winetux to anyone who might buy it. Today, I would spend more time figuring out exactly who was most likely to buy it and why.

Then I’d take another look at Winetux itself. Did it solve a problem customers actually cared about? Did they understand what it did when they saw it? Did they like the design? Was it something they would buy once, buy again or recommend to someone else?

When you’ve spent months thinking about a product, it’s easy to assume everyone else will see what you see. I knew exactly what Winetux was and why I thought it was a good idea. The customer was seeing it for the first time. If they didn’t understand it, that didn’t necessarily mean Winetux was a bad product. Maybe I was doing a lousy job of explaining it.

Then there was the price. A product can sell and still be a lousy business.

If I could sell something for $20, but it cost me $18 to make, package, sell and deliver it, I didn’t have much of a business. If I needed $40 to make the numbers work but customers were only willing to pay $20, I had a different problem. Working harder wasn’t going to fix either one.

Where I sold Winetux mattered too. Getting people’s attention wouldn’t have meant much if they still didn’t buy it.

I’d also take a much harder look at how I was trying to sell Winetux. I spent a lot of time on the road, at trade shows and making cold calls. I was certainly busy. But which of those things was actually producing sales?

If one trade show produced plenty of orders and another produced nothing, I should have wanted to know why. If one type of retailer was interested and another wasn’t, why? If people picked up Winetux, laughed at the name, asked questions and then put it back without buying, what were they telling me?

There is a lot of information hiding inside the word “no.” I’m not sure I spent enough time trying to understand it.

Maybe people didn’t want Winetux. Maybe the price was wrong. Maybe they didn’t understand it. Maybe I was talking to the wrong customers. Or maybe I simply wasn’t very good at selling it.

Those are very different problems, and at 21 my usual response to all of them was pretty much the same.

Work harder.

If people seemed interested in Winetux but wouldn’t buy it, I’d try another price and see what happened. If one kind of customer ignored it while another responded, I’d start wondering whether I was chasing the wrong market. If people bought it when I demonstrated it but walked past it sitting on a shelf, I’d have to ask whether the problem was Winetux or simply the way I was presenting it.

And if plenty of people were buying Winetux but I was still losing money, I’d stop blaming sales.

Instead of simply asking, “How do I sell more?” I should have been asking, “What am I trying to find out?”

I wouldn’t change the price, the product, the customer and the sales pitch all at once. If sales suddenly improved, I wouldn’t know what I had done right.

That sounds obvious to me today. It wasn’t obvious to me at 21.

Timing might have mattered too, but it’s awfully comforting to tell yourself that the market simply isn’t ready for your brilliant idea when the less comforting explanation may be that people just don’t want it.

And then there was me.

Coming up with a product didn’t mean I was automatically good at selling it. Raising some money didn’t mean I was good at managing money. Starting a business didn’t suddenly make me an expert in manufacturing, distribution, marketing or dealing with retailers.

I didn’t have to be good at everything. I did need to recognize what I wasn’t good at and find people who could help me.

I wanted the breakthrough. What I really needed was information.

There comes a point when you’ve tried different things and the business still isn’t working.

You have to be willing to walk away.

But walking away because you’ve figured out why the business isn’t viable is very different from killing a potentially good idea because you never figured out how to execute it properly.

Looking back, I don’t know that working harder was what Winetux needed. Maybe it needed a different price. Maybe it needed different customers. Maybe it needed a better sales strategy. Maybe the product itself needed to change. Or maybe Winetux simply wasn’t a very good business idea.

The important thing is that I should have known which one it was. That’s what I would tell my 21-year-old self today.

Before you kill the idea, make sure the idea is actually the problem.

David Fuller, MBA, is a commercial realtor and award-winning business coach. A lifelong entrepreneur and author of Profit Yourself Healthy, he specializes in helping business leaders scale growth and manage succession.