Flip the Switch

Under Your Nose

Todd Woloson, 39, found his inspiration for Izze Beverage Co.after regularly watching his wife, Eliza, blend Odwalla juice and sparkling water to drink at home. The Wolosons had learned to enjoy the European practice of mixing sparkling water with juice and wines while visiting Eliza's mother in France. But in the U.S., the Wolosons couldn't find a healthy bottled fruit drink with the same fizz.

Because of his wife's homemade juice drinks, Woloson saw that there was a hole in the beverage business for healthier soft drinks that used real fruit juice rather than high-fructose corn syrup. He had been reading news about the growth of natural-foods products and the market decline of sugar-laden sodas. "There is always a group of consumers willing to pay more for better products," he says. "The question is, How big is the market?"

People often assume that if no one has jumped on a concept, then it must be no good. Don't dismiss your idea so easily. Take the time to check it out and prove that theory wrong. "The first step is the hardest," says Kiesner. "Don't fight it." Forget the high-priced consultants in your early research. Getting information can be as simple as an internet search. If you're considering starting a local business, look in the Yellow Pages to see who else is out there. If you find competitors, consider how you might be different or make your company better. Find a niche. What will make your company special?

When Woloson's idea began to gel in 2001, he was working as a venture capitalist specializing in high-tech investment deals. Meanwhile, a business plan proposing to import healthy, bottled fruit juice drinks to the U.S. from Europe crossed his desk. Woloson thought it sounded interesting, given what he knew about the market and his wife's fizzy juice habit. He began to investigate the plan to import juice for a potential investment. But he found one key problem: He didn't think the imported juice tasted very good. Because of that, the deal wasn't going to work.

Yet Woloson still saw a glimmer of potential. He collaborated with his friend, Greg Stroh, whose family had started a brewery. The two decided to make a product they could believe in, so they began mixing fruit juice with sparkling water and packaging it in funky glass bottles.

Boulder, Colorado-based Izze started out as a side project to raise money for a charity that both Woloson and Stroh were involved in. But as sales picked up, it soon evolved into a company, and they invited the man who had proposed the importing business to become an Izze shareholder.

As a venture capitalist, Woloson lived by the philosophy of backing people, not ideas. So when he started Izze, he found six people willing to work for a year without salaries. Even he wanted to quit at times, such as the day he had to convince a truck driver to load the first production run of soda without a distributor lined up. The driver, who was at the production facility in Minnesota, said he couldn't load the truck without a destination address. Woloson was on his way to meet a local distributor and promised an address if the truck driver just headed toward Colorado. "We questioned whether it was worth the effort," he says. It was. He got the distributor-and its address.

"We had a lot of passion," he says. "Sometimes passion can be worth more than experience. This was a group of people who absolutely believed." That passion made Izze into a million-dollar idea, literally--at the end of its first year of business, the company hit $1 million in revenue.

Four years after its start, Woloson's business generates $15 million a year selling sparkling juice drinks, with 41 employees and nationwide distribution in Safeway, Starbucks and Whole Foods stores.

"The 'aha' moment was [when I realized] the simplicity of it all: sparkling water and juice," Woloson says. "I call it the pet-rock theory. Some ideas get overly complex."

Action Plan
So you've got your idea for a business. Now what? Make it materialize by following these steps.

  • Look long term. Do some long-range planning for your business to get a better idea of whether the concept will flop or fly. Consider how you'll sell your product or service. How much will you charge? If it's a product, think about how you'd handle returns, as well as how you'd build it. Is it cost-effective? Make sure your idea offers the possibility of residual revenue and can translate into other products or services.
  • Jump in. Still think you've got a great idea? Then go for it. Get a prototype. Do a test run. Find a customer, or at least someone interested, but try to avoid taking on fixed costs initially. You can find lots of help at universities, where for $100 to $500 prizes, students will compete to design logos, draw up marketing plans or head up PR campaigns. You can also get free help at your local Small Business Development Center. Locate a nearby center at www.sba. gov/sbdc.
  • Be patient. Starting a business from scratch always takes longer and is more complicated than you think. Don't be afraid of failure. "If you're a perfectionist, quit," says Kiesner. "Almost every entrepreneur has failed [at something]."
Jennifer Alsever is a freelance writer in Denver. A former Denver Post business writer, she now writes for Business 2.0, Fast Company and The New York Times.
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This article was originally published in the February 2006 print edition of Entrepreneur with the headline: Flip the Switch.

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