Hey, it’s Mike Cooch with LVRG.
I wanted to talk about timing.
There is an interesting topic I heard on the radio here in San Diego. I have been hearing a lot of commercials for this new concept where instead of buying a car or doing a traditional lease, you can sign up for a membership with a company where you will get a variety of cars as an option.
You can drive one for a month then trade it in and get a different type of car for the next month. That way you’re not stuck with one type of car. Maybe you want a convertible this month and then an SUV the next. This is perfect for those who want to get in the trend.
A great business model
When I was finishing up my MBA in 2003, I was already planning on starting another business. There were two business models that I was seriously considering.
One was to do a managing service in the IT space – which is what I ended up doing. I build that business, selling in it and running it for the next eight years.
The other business that I was seriously considering was the one that I just described to you. It was the exact same model and I even had a close friend who was going to be my business partner who came from an automotive financing background. He is a senior in a major financing company too.
So he knew that industry really well. He could get us access to a lot of capital, which we would need to do that business.
We had it all modeled out.
For various reasons, we decided the timing wasn’t right. Thus I went and did the IT services business. He went and did his own things.
It’s pretty wild now to look at, it’s been 15 years. 15 years since that time when we did that model and considered that business.
There are now some competitors coming into the market with what looks like a viable play to do that business. And I think there’s a couple of things there.
Right idea at the right time
It’s really important to understand that not every business, even if it’s a great idea, is not going to be viable now. And that business, when I look back on it, was not viable then.
I’m glad that we did not start it. And there are a couple of reasons why.
One is because of the market dynamics back then, and two, the automotive industry is hard to influence especially at that time we had just the handful of major players that had complete strength.
There was no reason for them to work with us on that subscription business at that point. And there is a reason now with Tesla and it’s self-driving cars. These car companies have to adjust their model of cars and manufacturers. They have to figure out what the future looks like for them.
And this idea of a car being more of a service instead of an asset that you own is quickly becoming a reality. So the market dynamics are making that model much more viable.
But it’s been 15 years, and back then I did not have the skillset. I did not have the patience, and the access to resources to be able to force the acceleration of that market to be ready. The timing would have absolutely crushed me.
Lessons to learn
There are two major lessons to learn from this.
One is to really study the market dynamics of the model that you’re considering, especially if the market or model that you’re considering is disruptive.
If you’re going to start a business like a restaurant or you’re going to start a piece of a SaaS software that’s B2b that is going to sell to small businesses or whatever, you have to know and gauge the timing.
There will certainly be an impact if you have a really good product or service. You’re probably going to be just fine. But versus something like the automotive industry where if you’re trying to go in there and make a major disruptive play, the market better be ready for it or the timing can end up being the major factor that determines your success.
The other major lesson is if you really love an idea and you’re really passionate about it and you decide that right now is not the right time, don’t give up on it.
I mean, 15 years later that market is becoming a reality and it is a viable market. It is an opportunity that I could decide to pursue and have a decent chance of making something valuable right now.
But interestingly, I’m actually not interested enough to do it now. If you are really passionate about an idea, sometimes the timing is not right, but that doesn’t mean it’s not right in the long term.
So keep it on that back burner. Keep looking at the opportunity, keep studying it, keep trying to understand it. Keep trying to understand the dynamics that will make it ready and then when the time is right, you got to pounce.