I was talking to a friend the other day about business.  We covered a lot of different subjects, but the conversation mostly revolved around how people start businesses.  I thought it might be useful to offer a few of my thoughts on this subject.

“Demand” For Products Or Services

It has been said that a person looking to start a business should make sure that there is a “demand” for the good or service that he wants to sell.  And I would certainly agree with this statement.  Who would not agree?  The purpose of a business is to generate revenue.  No one is going to pay for something that is not needed.

Try, for example, to sell snowblowers in Miami.  I doubt you would find many takers.  Why?  Because there is no demand for snow removal services in Miami, Florida.  I think you get my point.

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All right then, fine.  We can agree that “demand” is a necessary prerequisite for a business to succeed.

But when you think about this a little bit more, you realize that this doesn’t help us as much as you might think.  Demand is something that’s easy to talk about, but there are a lot of nuances to using it in practice.  This is really the question:  How do you identify where the demand is?  And what if the “demand” is in a work field or area that you hate?

People don’t really start businesses based on a mechanical, robotic identification of “demand.”  Very few (if any) people get in their cars and drive around a city looking for an unmet “demand” that he might be able to meet with a potential new business.  No one says, “Gee, I was driving around today and noticed a lot of unpainted houses.  I think I’ll start a house-painting business.”

Maybe there are people who make big life decisions purely on a perceived supply-and-demand equation.  But those are very few people indeed.  I can say this because not only have I started a business, but I’ve dealt with many, many hundreds of business owners.  Not a single one of them ever said that they made the life-changing decision of starting a business based on coldly investigating “supply and demand.”  It’s not how the real world works.

Want to know the truth?  The majority of people who start businesses do it in one of these ways:

  1. They inherit it. You’d be surprised how often this happens.  Of course, the people who have done this very rarely admit that they were born into it or had it handed to them.
  2. They have worked in some field, and after learning their trade, they then decide to go out on their own. This is perhaps the most common way people get into their own business.  The advantage of doing things this way is that you get a chance to learn the field, learn what works, and how to go about doing things.  In business, the learning curve costs money, and the more efficiently you can do things, the better.
  3. They stumble into it. A person might simply enjoy doing something.  He keeps doing it.  He attracts the attention of a wider and wider audience.  Suddenly he realizes that there are a lot of people who want the same thing.  He realizes that he can generate income by offering his product or service to a larger audience.

I don’t want this to sound like I’m minimizing “demand.”  There are, of course, some people who actually do make decisions based on demand.  I remember one nurse I dealt with who had an ingenious moment of inspiration and used it to launch a new business.  She told me she had worked in the health care field for many years, dealing with all sorts of issues.  She said that she noticed that no one had ever thought of creating a truly mobile blood-testing lab that could would meet the needs of doctors and paramedics.  So based on her experience in the field, she designed such a mobile lab.  And it was a great success.

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But even here, she would never have made such a decision unless she had been working in a field she loved in the first place.  To identify demand, you have to know your field.  Stated another way:  you won’t be able to identify demand unless you know what to look for.

This brings me to my second point, which is:

You Need To Work At Something You Love

If you aren’t working in a field you like, you’re going to be hating life.  You’ll miss opportunities to identify demand.  You’ll be miserable all the time.  You spirit will sag, and your frame of mind will be negative.

This is why it’s important to point out that you can’t make big life decisions (like starting a business) on purely mechanical grounds.  A business takes a maximum effort over many years.  If you’re doing something you hate, you’ll never be successful.  So you need to be picking something that you like doing.  Making a decision based purely on “Oh, I see a demand for XYZ” is setting yourself up for failure.

People rarely make big life decisions based on looking at numbers and abstractions.  And when they do, it is because they already know a lot about the field or the subject matter.  They already have a “feel for the street.”  And they usually got this “feel” by working in the field for someone else for a while.

No one just goes off and leaps into some profession with no experience based on some charts and tables about “demand” that he found on the internet.

You have to like the subject matter.  And this is why it’s not bullshit when people say:  follow your passion.  Starting a business is in many ways a leap of faith.  You will be working your ass off.  So you’d better be doing something you have at least some interest in.

Another corollary to this is that you’ll never be able to spot “demand” if you are in a field you hate.  You’ll miss all those little nuances, those little “tells” that make bring a good idea to fruition.

Don’t take this too far, of course.  I’m not saying that you should just blindly follow some dead-end passion and hope for the best.  No.  I’m not saying that.  But what I am saying is that you need to have some strong interest in some area in order to be successful.

You Can Create Your Own Demand

And here’s another point that people often miss in discussions about “demand” for a business.  They obsess and obsess over demand, without realizing that they can actually create their own demand.  There are some practical limits on this concept, of course, but the point is to remember that your energy and action can drive events.  You are not a passive observer:  you are an active creator of reality.

Even if you know an area well, you can never be entirely certain that your idea will succeed.  Chances are, someone has already thought of it.

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But that should not concern you.  You can create your own demand.  If you are doing something well, and are entering a crowded field, you can still be successful.  And this is the thing that few people really understand about “demand.”  Demand is not an absolute, static concept.  It is very, very fluid.

If you are doing something well, or doing something in a way that has not been done before, you can create your own demand.  People often don’t really know what they want until you show it to them.  I think Steve Jobs said this, or something close to it.  And I think this is true in many situations.

So those are few of my thoughts about “demand” when it comes to business.  It’s a lot more complicated than people think.  Don’t be demoralized or feel discouraged if you find it difficult to know if there will be a demand for your proposed business.  No one can really tell you.

My point here was to point out some nuances to the idea of demand in business.  Starting a business is a mix of rational, cold calculation with visionary, inspirational energy.  You need both.

As I said, there is an element of faith involved in starting and running a business.  Do your due diligence, of course.  Make your preparations.  Arrange your plans.  But at some point, you’ve just got to do it and see what happens.

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