by Micha Porat. In the consumer world, making it big is about building brands, not technologies. And from my experience, many Israeli entrepreneurs struggle to recognize what that means.
Two encounters with entrepreneurs over the past month helped highlight for me why successful US entrepreneurs are so different from Israeli entrepreneurs when it comes to consumer products, and why the last really interesting consumer product to come out of Israel is the drip irrigation system approximately 50 years ago (ok – maybe I’m exaggerating a little – but you get the point).
Over the past month I met two companies founded by Israeli entrepreneurs who came up with pretty refreshing consumer products. Not online products. Actual physical products. They had a refreshing perspective. They were innovative. They had a twist on an old industry that hasn’t been changed for years. And what were they going to do with it? What help were they seeking from me? They were looking to approach the industry giants in order to license their product technology and make license revenues. Because building brands is tough and costs millions. Because the market is super concentrated. Because they could be easily copied by the bigger players. These are all valid risks, but…
Entrepreneurs – READ UP! Read every word written by Andy Dunn, founder of Bonobos – a massively successful startup that came up with “better fitting, better looking men’s pants” (he writes a great blog too). Read up on Sophia Amoruso and her wildly successful Nasty Gal, who came up with “an online destination for fashion-forward, free-thinking girls.” Read up on Neil, Andrew, Jeff and David - who created the massively popular Warby Parker, in their mission to “create boutique-quality, classically crafted eyewear at a revolutionary price point.” What do they all have in common? They didn’t invent nuclear power. They came up with a refreshing look in an old industry, found their twist, their niche, and realized that in today’s online world, building a brand is all about approach and execution. They swung for the fences.
After spending a year working with US entrepreneurs, I can’t imagine one of them coming to me with a novel idea about a physical consumer product and suggesting licensing it to a GE, GM or Delta. The good ones swing for the fences, because they are looking to build businesses, not license deals. They see the business in building a brand, and head right to execution. Not to fine-tune the technology. Not to perfect the product. To execution – building an online brand and selling product.
So if you have an amazing consumer idea – learn from how others managed to build successful brands and go for it. The road is not easy, but if you see the light at the end of the tunnel, and end up getting there, the reward will make it all worth it.