Entrepreneurs: Are You a User? Did you start your business after creating a product for your own use? If so, your chances of landing venture capital and finding business success are better than for other types of startups.
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Ever create a product for yourself, because you couldn't find exactly what you wanted in stores? I feel like these sort of self-focused inventors get a bad rap in the entrepreneurial world. They're sometimes seen as dabblers rather than serious entrepreneurs.
But, as it turns out, "user" entrepreneurs -- people who commercialize a product they first made for their own use -- have a leg-up on those whose business didn't start so close to home. Entrepreneurs who use their own products land more venture capital and have better survival rates than startup businesses overall.
Although just 10.7 percent of startups are founded by "user" entrepreneurs, those founders' businesses made up nearly half of the startups that survived beyond five years, according to a new report from the Kauffman Foundation, "Who Are User Entrepreneurs?" In other words, user entrepreneurs are disproportionately successful.
I don't really find that surprising. My experience is that entrepreneurs in this category tend to be true believers in their product and simply don't give up.
For instance, I recently had a chance to learn the startup story of SPANX, the fashion-forward women's support undergarments company, while researching a book chapter. The company began when -- you guessed it -- founder Sara Blakely didn't like how she looked in a pair of cream-colored pants that she wanted to wear with a pair of sandals. She cut the feet off a pair of support hose and voila! -- a business idea was born.
The study noted that commercializing a product you've used yourself may be an attractive path for women and minority entrepreneurs. Especially if you have less of a track record in running businesses -- as is the situation for many women and minorities. But being a user entrepreneur brings the ultimate stamp of credibility: You can tell investors and customers, "I've used this product, so I know it works."
These user entrepreneurs often display a very high level of passion for their product. Besides SPANX, I'm thinking of Brad Gruno of Brad's Raw Chips, where the founder lost a ton of weight eating a raw diet, and then developed his products to feed his cravings for chips.
Both these founders were unstoppable marketers for their product, hiring for other roles so they could stay in front of prospective clients and talk about the product.
I think that deep, personal conviction is what makes it easier to keep going over the rough patches until the business is successful.
Are you a user entrepreneur? Tell us about the product you created -- and use.