You had a great idea. You knew it met an important need in the marketplace. You pulled together a group of friends to design and perfect the product. You understand both the market for the product and the competition. You have the manufacturing in place and you’re ready to launch. Right? Wrong. You’re only at the threshold of the market, still looking in. You’ll likely need additional guidance as you step through the door and navigate the halls of commerce.
On April 18 – 21, 300 startup companies will showcase their products, most for the first time, at Startup Launchpad, part of the Mobile Electronics Trade Show in Hong Kong. Minesh Pore of Global Sources, the event producer, has helped propel literally hundreds of startup companies from nice ideas into functioning businesses. I had a chance to speak with him recently and gather his advice for those he serves.
Jay Sullivan: What’s the biggest challenge startup companies face?
Minesh Pore: Most startup companies start as what would be the R&D division of a larger entity. They have an idea for a product or service and have spent all their time developing it, which is important. But R&D doesn’t constitute a complete corporate entity. They need to understand sales, financing, manufacturing and distribution, among other things. They also need legal advice to protect their intellectual property.
Sullivan: So they’ve built a product, and now they need to build a company.
Pore: Exactly. They have to do their R&D on the market as much as on their product or technology. What niche does it fill? What are people willing to pay to access that product or service? Who are the best business partners to get that product to the people who want it?
Sullivan: How can small companies with limited resources gain that knowledge?
Pore: They need to build relationships. No one does all of this on their own, especially newer companies. That’s why they go to trade shows. They can learn from others.
Sullivan: What steps can a new company take to develop the connections they need?
Pore: They need to learn to communicate. Most small companies literally don’t know what they don’t know. They need to be able to craft a simple message about how their product helps a particular audience, and then ask tons of questions about how to get their product produced, distributed and sold. That communication loop – info out, info in – allows them to build the relationships they need.
Sullivan: The first relationships they need are with investors, correct?
Pore: I actually believe it’s more important that they pursue a sale rather than an investment. $100,000 sale is far more valuable than a $100,000 investment. Most distributors dealing with startups know their purchase order for $100,000 in product will give the startup the leverage to borrow the money to produce the goods. They also know the products aren’t sitting on a warehouse loading dock already. When the startups build a relationship with the distributors, they start sharing the risk. They’re a player in the game at that point.
Sullivan: And success begets success.
Pore: Right. For startups, their buyers become their advisors. The distributor needs products in its channel. They have lots to choose from, but once they sign a PO with a new manufacturer, they have counted on those products filling their pipeline. They have a vested interest in helping that startup succeed. That’s why our trade shows are all about helping everyone build connections.
Sullivan: But investors are important as well.
Pore: Of course, but it’s easier get investors once you show value. The sale is the important part.
Sullivan: How do you help startups gain these skills?
Pore: We run training sessions before and during each conference on a wide range of skills. But just as valuable I think is the coaching we give startups as my team and I walk the halls of the event. Some of the inventors are “quiet types,” more comfortable with ideas than with people. They’re so steeped in the design of their product, they’re literally “heads down,” deep in the product, instead of looking up at market with all its opportunities and dangers.
Although they’re very proud and excited about their product, they sometimes need help conveying that enthusiasm. They tend to talk about the product itself instead of how the product will benefit or be attractive to the end user. We’re always coaching startups on how to talk about their product features in terms of benefits.
Sullivan: And they have to keep talking.
Pore: Right. If you aren’t talking, what’s the point of being at a trade show? Startup Launchpad is only one small part of the greater Mobile Electronics show. These 300 startups will benefit from being right near another 3,200 booths of well-established companies with proven products. We’ll have 37,000 global retailers passing through the show. That’s a lot of foot traffic. Having a clear and concise message about your product is crucial, because you’ll be saying it thousands of times, not just at trade shows, but throughout your process for building your brand and building your company.
Sullivan: So to sum up, it seems any startup, whether at one of your shows or elsewhere, needs to focus on three things. 1. Build the relationships that take them from patent owners to business owners. 2. Focus on selling their products rather than seeking investors. 3. Keep talking – to whoever will listen – about how your product or service adds value, rather than about how it’s designed or created.
Pore: Yes. That’s certainly a great start.
Sullivan: Thanks, and good luck helping launch another 300 companies.
Originally published on Forbes.com.