How to Turn a Product Into a Business
What’s the difference between a product and a business? To answer this question, we can look at a timeline of mp3 players.
- MP3 players have been around since the mid-90s. #product
- The Zune was an MP3 player launched by Microsoft in 2006 and never made it past single digits in market share. #product
- The iPod was an MP3 player that launched in 2001. #business
What was the difference between all the other mp3 players, Microsoft’s attempt, and the iPod? The delivery, ecosystem, marketing and macro trends of consumer behavior were timed perfectly.
Here’s what Apple had going for itself that all the others did not:
- Delivery – They figured out a pricing model so you could buy the music to fill your iPod at 99 cents per track, and you didn’t have to be techy to figure it out.
- Ecosystem – Infrastructure was in place that made it easy to find and purchase music. iTunes was popular and people were comfortable making payments by a credit card or Paypal.
- Macro Consumer Behavior – CDs were becoming obsolete and Gen Y consumers were finding new ways to gather and consume music. Recall the line in the Facebook movie when Justin Timberlake (playing Sean Parker, the founder of Napster) told Eduardo, “We won. Do you want to invest in Tower Records?”
- Marketing – Apple is a superior marketing company. Repeatedly, they have achieved market absorption with new technology. Note, the iPad was not the first tablet either. While other mp3 companies may have been focusing on features, the iPod campaigns were filled with cool white silhouettes of people dancing, and the tagline: “1,000 songs in your pocket.”
Now, what do you have–a product or a business? Most people start with a product, that’s normal. Take another look at the list above and ask yourself how ripe your product is for becoming a business. What do you need to have in place in order to compete in the marketplace?
How will you deliver your product? How will you arrive at a pricing model? Are people already in the habit of using a product like yours? How good are your marketing skills? How much do you enjoy this side of the business?
Perform a simple self-assessment on yourself. How much do you want to sell, market, and perform business admin? If you’re not excited about this, then partner up with someone who is.
Do this and you’ll have a better chance at becoming an iPod, not a Zune.