When Quitting Is Success And Not Failure [Podcast Ep09]
I actually had a really interesting call that I want to share with you. There’s just so much to learn here.
How can it be quitting selling after six months is considered success? Let me walk you through this case and what’s happened and what’s progressed, and I think hopefully you’ll get some good experiences out of it.
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If you follow the process and do all the right things, you win. Right? WRONG!
The background is, I was talking to some people and they were really passionate about their product.
They’d been working on it for about six, maybe even seven months, with samples.
They had Quotes. They were ready to go with their process.
A lot of things had come together and was really feeling like they’ve reached the end of the line now, and ready to start placing orders and start purchasing the products and get it listed on Amazon.
They had followed all the correct principles of differentiating a product, making slight improvements to a product so that it’s better than the other products on the market in this on differentiation.
That feeling you get when you’re nearing the end and you’re really starting to achieve something.
In fact, interesting, while I was talking to them, I was also excited about the product and I really liked the differentiating ideas, and I was quite convinced that this product was going to be a success.
That’s when things really started going wrong, I guess, is probably one way to say it.
When you just can’t get the numbers to work
We started discussing the product for about 30 minutes, and as we started diving deeper, we started coming to a few realizations that were a bit concerning.
The landed cost of the product was really close to what Amazon sellers were selling it for online already, which really put us in a difficult position because it was going to be very hard to clear inventory, and you’d have to be clearing inventory well below cost in order to make their product work.
Of course, I’m talking as a worst case scenario, not as a best-case scenario.
The goal obviously was to have these differentiated features and benefits to the product and sell it for a premium. We were hoping that they would get a premium for the product and that this premium would differentiate them and push them into a different category.
What was really interesting about this is that we started asking questions that I kind-of believe are the go-to questions when you start looking into these things.
That is, what the hell happened?
- Why were the prices dropping so much on Amazon from when they originally started looking at the product?
- What were the causes?
- The typical questions we ask ourselves is, was it a seasonal product?
- We didn’t think it was a seasonal product, but of course, you should still check.
- Was it a bad seller?
- In other words, were people clearing their inventory to move the stock out because they just weren’t selling it well?
- Or was there suddenly a lot more competition in the market on this product?
- Most importantly, what we felt was, how easy would it be to differentiate or show these extra benefits and features or differentials of the product through a listing?
I think that’s quite important.
In talking to me it was very obvious and clear.
But to get that message across in a listing would present its own challenges, and it would have to be really, kind of what I call pitch perfect, to make that difference.
Then the last exercise we went through was what I call the elevator pitch to friends.
Have you pitched the product to your friends?
Showing them, even if it’s just five friends of three friends, showing them what your product is and what your competitor’s product is, and trying to see, could you convince them to pay more?
Of course, they have to be honest with you.
Could you convince them to pay more, and how much more could you convince them to pay?
Just in doing this as a quick exercise between ourselves, we talked ourselves into the fact that there was just no way this premium was going to be justified on the product.
We quickly came to the conclusion that, “It’s time to quit this product”, and to move on.
That’s where a lot of people would look at this and say, “Oh. Well, that’s really a failure. A lot of wasted time and effort”.
On reflection, and I truly believe this, I see this as a big success.
Thinking like a real CEO
Let me walk you through my rationale on this.
Firstly, we have to always take the emotion out of the historical work time energy effort put into projects and put into products.
If the numbers don’t add up and we’re going to lose money, or there are huge risks on dead inventory, we just have to quit.
Quitting is the most successful thing you can do, right?
Than just emotionally going down a rabbit hole and getting tied up deeper into it, costing you more money, costing you more time.
Cutting it is the best, fastest, easiest thing to do.
Of course, we looked at trying to get manufacturing costs down.
We didn’t think this was going to be realistic, and if the consumer wasn’t going to pay as much extra as we thought for these extra benefits and features, it’s time to move on.
We really learned that throughout the six, seven-month process, markets do change.
You need to just constantly be reviewing what’s going on and don’t get disheartened when you think you’re onto something and you start working down that direction, and the numbers start showing something different.
Markets change. Prices drop. New competition enters.
The most important thing is reviewing those things and watching those things.
You want to pick them up earlier rather than later.
Nothing’s going to change other than how much you stop the losses at, right?
That’s something that I think we did really successfully here is making that decision to quit and to move on.
It’s not a failure, it’s a test
I think one of the most important takeaways that I got out of this is that the experience is never lost, right?
Throughout this experience, these people gained a ton of experience in dealing with their manufacturers and developing in the product development process.
That experience and exposure is never ever lost, right?
You’re always going to have that knowledge.
You’re always going to have that experience. When you move on to the next product it’s going to be quicker and faster and just that much easier for you.
That experience, to me, I always say the journey’s critical here, and that experience won’t get lost.
You need it and look at your failures as experience. Quitting losses before they get even bigger.
Guys, I think if you can take that example and even apply it to other scenarios, I think that’s what I’d like you to think about and take away from this episode.
Most successful people tell you how many times they fail, and it’s only the one or two successes that outweigh all those failures.
I see this in a similar light.
The quicker you quit problems or quit directions that aren’t going to work out, the quicker you’re going to turn into the right direction.
Guys, with that I will speak to you soon, and we’ll be recording another episode next week.