Mark Twain lost his entire fortune on a series of entrepreneurial ideas, most notably a typesetting machine that never actually worked. Twain, like many of us, fell in love with the idea and simply didn’t know when to say stop.
I have a friend in the exotic car business whom I visit quite often. Every time I’m down at his house, he has a Ferrari, Aston Martin, Bentley, or some other beautiful car in the driveway. He lets me drive whatever he has, which for a car nut like me is heaven. Invariably I say, “Why don’t you keep this one?”
His answer is always the same: “Andrew, you can’t fall in love with the inventory, just move ‘em down the line.” And that’s what he does, quickly moving cars for a $2000–$3000 profit in a day rather than holding out for the $7000–$10,000 profit they might bring later.
Too many people hold on to inventory to achieve a set price when the market wants to pay less.
Too many people fall in love with their products or ideas and refuse to compromise on price, terms, quality, or financing because of their company’s value, reputation, or location. Too many people fall in love with their products and throw good money after bad to make minor improvements in quality or functionality that the customer rarely notices or cares about.
I spent three million dollars developing the ultimate golf website product, Marketing Commander, in a market that, to my dismay, turned out to be too unsophisticated to care. There are ten other companies in the golf website business now, all with products no better than what I had two decades ago and, do you know what? The market doesn’t care. I could just as easily have tweaked my existing product for very little money and kept the three million. The market wants simple, easy, and cheap, not sophisticated reporting and powerful marketing tools. Maybe that will change, but it will be a decade from now at best.
Never fall in love with your product, price, or idea for too long. The market will tell you what it wants.
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