When does it become a real business?
Illusion never changed
Into something real
Since about the 30th of September, I've been working on a business idea fairly steadily.
It's actually an idea I've had for many years and can prove that. On the mock-up website for it, I've linked to an online discussion from more than thirteen years ago where I was asking questions rooted in my desire to start a clothing line.
So I don't even know how to make the distinction I want to make with regards to what's different about the past twelve days. I have been working on it for years, but not steadily everyday for years.
I can date the change to September 30th because that's when I wrote a post on a different site and began redacting stuff on November West Wears, which was a private site at that time. The earliest date on pieces published on November West Wears is October 3rd but writing happened for a bit in unpublished drafts before that.
I mention that because the entire point of THIS site -- Memome Project -- is about how ideas lead to reality. There was stuff in my mind which was being worked on behind the scenes and not posted publicly for some time before I began publishing stuff for the world to see.
That will generally be the case. But how do you sort the wheat from the chaff?
I mean mentally, without first "making it real" and seeing if it flies or goes up in flames, along with a ton of money and your public reputation, which may never recover.
When I published the piece on September 30th, there was no clear intent in my mind to "get serious" about this project or whatever. It was an organic process where I had something to say, wanted to say it publicly about that private mock-up and not on that same site and one thing led to another.
It was like a seed germinating and pushing it's way up through the soil towards the sunlight. I had no plan. I just felt something gel and felt an impetus to do something and to my surprise it continued past one or two posts, one or two days and still continues.
I think I have something substantial that could become a real business but I don't have a bank account or an office or a knitting machine. It's currently stuff in my head and a website.
But in the past I've had a business bank account and set up a home office and other trappings of business and it never developed into a real business then either.
They talk about this on Hacker News and at YC, that there are a lot of things that are seductive because it feels like you are "working" on your business idea but you're really not. You have the trappings of business but no actual business.
There are various expressions I've seen for this phenomena, like "playing house." It's the grown-up version of what children do. They have this imaginary thing they are engaged with but it's not a real business yet and not on track to become a real business.
There's almost always stuff that happens before it's a real business where someone is playing with ideas. This website -- Memome Project -- is born of me trying to figure out how you can tell which ideas are deluded nonsense, which are half-baked and could become something real with more work and which ones have legs.
What concepts are so solid they can give birth to something real? And what does it take for even a solid idea to become something happening in reality?
Not only "has legs" but is on solid ground and goes where I want it to go with a tolerable level of unintended consequences and downside.
At some point, I took over a long dead sub on Reddit called Clothing Startups. I did so because I wanted to start this clothing line and I thought I could use it as a space to gather together educational resources about how to start a clothing business.
I've taken over other long dead subs and crickets chirped. This one had more than 900 members already and immediately had other people posting.
I have moderating skills and a big part of that is understanding and accommodating other people. It took off and grew to more than 20,000 members but it became what other people wanted. It never became what I wanted.[1]
And then I gave it away because it wasn't serving my goals, it was a responsibility and burden and source of stress and I couldn't figure out how to get anything out of it for myself. So it was an unpaid job with nothing in it for me.
So just because something "has legs" and can take off, doesn't necessarily mean you will really want to run with that idea. It may not really do anything you want.
Tesla positions itself as a green business solving our environmental issues. This is PR nonsense. It is doing no such thing.
Perhaps Elon Musk knows that and perhaps he doesn't.
What Tesla really solves is two things:
1. We need vehicles that use something other than gasoline because we will eventually run out and while we wait to run out, the cost of oil will go up because the last half of the oil in a deposit is harder to extract than the first half.[2]
2. In order to get widespread adoption of electric vehicles, we need charging stations like gasoline powered vehicles have gas stations.
So it's really hard to figure out what's real and what's not when it comes to business because a lot of what the company SAYS about what they do is PR: it helps them SELL their product and may have nothing to do with the problem they really solve.
The founders themselves may not actually know what problem they are really solving. This can lead to the death of a business when conditions change and the founders don't understand how that will impact their business because their concept of what they are doing doesn't match what they are really doing, so they continue on in the wrong direction until they fall off a cliff.
Since PR about successful companies is frequently an illusion itself, trying to figure out what's real and what's not is quite hard.
I'm clear it's too early to call myself a "founder" of November West Wears. But I'm wondering at what point it will make sense to say "I've started a business."
Because currently it's a Velveteen Rabbit -- it's sort of like a toy to play with, not a real thing -- but having physical trappings, like an office, doesn't per se make it a real business either. I've experienced that firsthand and seen others talk about that fact.
I have long thought you have a real business when you have two things:
1. Something of value people want.
2. Paying customers.
The first without the second is a hobby or slave labor. The second without the first is a con job.
I guess what I'm really wondering is at what point it is "a viable baby" and how to talk about "it's viable but not yet born."
With pregnancy, humans are generally willing to abort a baby that's not viable -- a baby which cannot survive outside the womb on its own. After a certain point, the baby may survive if you induce labor or perform an emergency C section, but the child will likely have lifelong problems from being delivered too early.
I think what VCs are looking for is "a viable baby" that can grow into a giant if you feed it Ent draught at the right time. They aren't necessarily funding things that are as yet a real business.
But they have judge it to have the right stuff in order to be willing to bet on it. And that's exactly the sort of thing this website is intended to explore and try to help me understand.
Footnotes
[1] If Everybody Wants You, it may FEEL like you have something real but most people -- me included -- are thrilled if they can get something they want or need for FREE. So being "popular" doesn't guarantee you have something upon which you can base a business.
All businesses have bits and pieces that are necessary but don't pay anything. Restaurants need to have a bathroom but they don't charge for use of the bathroom. They charge for the food.
And it's common to have to work for free for a time on a business idea before it has any hope of paying your bills. But at some point it needs to pay or it's not a business.
If you don't see how you can eventually get value out of something you are doing for free, at best it's a hobby, not something supporting your business goals. If it's a burden and has value for other people but will never pay you anything, like r/clothingstartups became for me, it's slave labor.
One test: Do they want it primarily BECAUSE it's free? If they would never under any circumstance PAY for this, then THIS -- whatever it is -- will likely never be a business.
Another test: Does it accomplish something essential to your business goals that you inherently can't pay for or which has more value if it's not done for money?
If you pay people to spend time with you, you aren't networking. Networking is valuable and inherently not easy to do.
Also, people who hear about your business from something other than paid advertising will tend to take positive information about your business more seriously than if they hear the same thing via paid advertising.
It became clear to me that r/clothingstartups wasn't ever going to do anything for me, so I bailed. That doesn't mean it will never have business value for the person that took it over.
[2] I'm an environmental studies major. I've had two college classes that covered Hubbert's theory of Peak Oil.
Wikipedia does a poor job of explaining it and makes it sound like it's not a solid concept when it is a solid concept.
Elon Musk would be a fool to promote Tesla as solving the Peak Oil problem. Public perception is that it's not a real problem, it's just some handwavy idea by some quack no one's ever heard of.
In spite of having learned about this in two college classes, I always have to google the name of it because no one talks about Hubbert and Peak Oil the way global warming and climate change are everywhere and inescapable.
In a nutshell, in 1956, Hubbert predicted that oil production would peak between 1965 and 1971 and after that oil would get scarcer and more expensive. His prediction was proven accurate by the 1970s energy crisis.
Then we discovered a previously unknown large oil reserve in Alaska which gave us relief. Prices went down some and people stopped waiting in long lines at the gas station. (I'm old enough to actually remember the long lines and sense of panic.)
So he wasn't wrong. He just didn't have complete information.
And, no, there won't be future events giving the same relief. Because the significance of Peak Oil is not "OH NOs! We are running out of oil!"
It's that extracting the last half from a deposit is much more expensive than extracting the first half. You absolutely will not see it gushing into the air from the ground anymore.
Our economy wasn't simply built on oil as an energy source. It was built on CHEAP oil.
As the cost goes up, things that made economic sense in the era of CHEAP oil won't continue to make economic sense.
The era of CHEAP oil is over. Even if we learned that there is a huge source of oil in Antarctica or in an ocean floor or that the entire moon is made of oil covered with a thin layer of rock, it wouldn't bring back the era of CHEAP oil.
If such sources exist, it will be vastly more expensive to extract. So that ship has sailed and isn't coming back.
The end of the era of CHEAP oil not only makes Tesla necessary, it made it viable. Electric vehicles weren't financially viable earlier because gas powered vehicles were so much cheaper.
As the cost of gas went up, the total price difference between the two -- car plus fuel -- shrank. So Tesla works in spite of having an atrocious reputation as building junk cars with serious defects because it DOES solve two REAL problems, just not the one it claims to solve, and was started at the right time:
The point at which market conditions changed and made it make sense for consumers to buy a type of vehicle that used to be "too expensive" and became "more affordable" not because electric vehicles got cheaper but because gas got more expensive.