Entrepreneurs: how to say goodbye to your product
Part 7 of The HurryCane Story; From Napkin to the No. 1 Selling Cane in America
For most entrepreneurs, thinking about parting ways with a product they are mentally, emotionally and financially invested in can be a scary thing. Being wholeheartedly involved in the lifecycle of your product—from concept and creation to its several stages of development—is often deeply rewarding, but bittersweet. It’s kind of like a parent watching a child grow up.
Most parents realize, however, that they have to let go in order to let their children grow. And that’s why Marketing Architects recently finalized the sale of our own agency-developed product, HurryCane (the No. 1 selling cane in America) on Aug. 25 with Drive Medical, a New York-based medical device company.
Following these guidelines will help you better understand when and how to effectively “let go of”—or sell—your product and move on to the Next Big Thing. They helped us.
Prepare an exit strategy early on.
While this might not be the best advice for a relationship, you’ll be in the most advantageous position possible when sales opportunities come along if you begin thinking about an exit strategy early on in your product development stage. Build your product with consumers’ needs in mind, but don’t forget about potential buyers. What’s going to make your product attractive to a potential acquirer?
One of the most appealing qualities to any acquirer is brand recognition. Fortunately, the extensive branding efforts we put into HurryCane helped our product become the only recognizable cane brand based on two unaided recall studies. This made it much easier to have that first phone call with possible buyers.
Identify gaps that could prevent success.
You need to sit down and be honest with yourself about potential shortfalls that could block you from creating a marketable product. Such as, do you have the core competency to develop the type of product you want? Do you have financial investors? Do you know how you are going to build brand recognition and market your product?
Here’s the good news. You don’t have to be an expert at building your product. You just need to know how to find the experts and work with them. Marketing Architects did some major research to identify the most relevant manufacturing partners to help build HurryCane. This included many phone calls, face-to-face meetings and negotiations.
We also had an extensively experienced marketing team on our side—our own. We admit, this gave us an amazing advantage because our team had experience successfully launching products, although working in the cane category was a whole new ballgame for us.
Finally, we didn’t have an outside investor. While it was nice not having the added pressure of an investor chirping in our ears about maximizing value, investors can also provide motivation to accelerate growth. This can help get your product closer to an acquirable state. Instead, we had to spend more time policing our own pace—a method that sometimes isn’t as effective.
Stay on top of news in your vertical.
This one is pretty straightforward. If you ever plan on selling your product, you must be aware of the top players and current trends in your category. Better yet? Know who does acquisitions in your vertical, too.
Love the product like you love your child.
Most entrepreneurs don’t have a problem doing this, but it’s worth repeating. Like all entrepreneurs, we had a fair share of hurdles and setbacks with HurryCane. But the glue that held our team together was our unified devotion to developing a product to the very best of our abilities. This not only energized the business, but it helped us form capabilities that didn’t exist before our HurryCane venture (we became skilled web marketers).
Like for your own child, you want the best for your product. No matter what you decide, be true to your intentions for the product. We wanted HurryCane to go on to bigger, better things, but we also loved the idea of still being a part of its life. This is why Marketing Architects decided to sell it to Drive Medical—a manufacturer that has the resources to grow it and also wants us to continue to market the product. It’s a win-win!
Be aware of the real-time challenges of selling your product.
It’s not easy to sell a product—especially when you get into the gritty details. The top four challenges you’re probably going to face (we did, too!) that you’ll need to be able to immediately handle are:
The massive time commitment. If you’re looking to sell your product, you need to recognize the insane time-suck the process will inevitably turn out to be. Making the sale your top priority is almost a necessary, but it could definitely cause the next challenge:
The core development of business suffering. You need to have a plan to keep your operating focus when you’re trying to sell. Can you afford to put your business on hold to make a sale? What about employee morale?
Exposing your “secret sauce” to others. Your business and product is going to be very exposed as move through the selling process. This increases the risk of knockoffs.
Due diligence. Make sure you keep good records and have everything well organized and the process will go much more smoothly. Have a credible explanation for every instance in your product’s timeline.
Agreeing on a well-negotiated deal is essential when it comes to preserving the integrity of your product. You really need to understand how to negotiate so that you can choose a negotiation approach that aligns with your business’ own core values and the buyer’s core values.
Marketing Architects worked closely with Drive Medical to negotiate a deal that respected all parties’ values. Drive recognized the significance of working with a team who already had intimate knowledge of the product they acquired, which is why we decided to partner with them to market HurryCane going forward.
Walk away from commitment-breakers.
Selling your product to a party who doesn’t have core values that align with your own is a bad idea. For instance, if a potential buyer can’t keep commitments during the negotiation process, there’s a good chance they won’t during the sale process, either.
Want to read more about how Marketing Architects created the No. 1 selling walking cane in America? Start at the beginning of our series:
Part 1 – How to Name a No. 1 Brand
Part 2 – How to Test Your Way to the Top