Small Business Expert Ron Close on Dealing With Rejection - Globe and Mail
RASHA MOURTADA
Ron Close is the executive entrepreneur-in-residence at the University of Western Ontario’s Richard Ivey School of Business
, where he teaches and mentors undergraduate and graduate business students. He is also an entrepreneur-in-residence at Toronto’s MaRS Discovery District, where he helps science, technology and social entrepreneurs commercialize their new ventures. Here, he discusses Police Prep’s success and what other entrepreneurs can learn from it.
Police Prep co-founder Deland Jessop says that being repeatedly rejected by colleges, as he and his partners were initially, was both discouraging and frightening. But they kept at it. What’s your advice for entrepreneurs facing rejection? How can they cope and keep moving forward until they get that big break?
Ron Close: Successful entrepreneurs view rejection as an opportunity to learn. Repeated rejection can be tremendously discouraging, but if it is accompanied by learning the reasons for rejection, the entrepreneur then has something to work on. The good news is that Deland was out there circulating among prospects. He created chances to pitch his product directly to colleges, to get his face, name and ideas out there, and to gain first-hand feedback into their wants, desires and fears.
It sometimes helps if these early sales meetings are presented more as “information gathering” sessions. Failure to walk away with an order can be discouraging, but if you walk away with valuable information that makes your next pitch more compelling, then every meeting is a stepping stone to success.
What’s your take on Police Prep’s decision to take the Conestoga College job for no pay in their first year working with the school?
Ron Close: Deland acknowledges that one of the hurdles to sales was a lack of credibility. Police Prep’s Internet site and self-published book were good efforts to build its credibility. But nothing speaks louder than a large and successful implementation. The team should be applauded for taking the Conestoga job without pay, in order to gain that foothold in the market and to validate their product in real-world practice.
I suspect that the folks at Conestoga may have felt a little sheepish when they delivered the late information that Police Prep would not be paid. That was an opportunity for Deland to show grace and build some good will with an important early customer (think repeat business). But it was also an opportunity to press for other consideration from Conestoga … “If you can’t pay me, at least allow me to publish and trumpet the success of Police Prep’s program at Conestoga and use it as a testimonial to support future sales.”
Mr. Jessop and his partners had to introduce their service over and over again to colleges. What is your advice to entrepreneurs meeting with prospective clients? What are the dos and don’ts?
Ron Close: A business succeeds when it effectively addresses a real and known customer need.
Deland speculated that since U.S. colleges had successfully focused on this space [policing programs], Canadian colleges would similarly be aware of the market opportunity for them. But the early rejections probably point to the fact that Canadian colleges were not viewing this course as low-hanging fruit, a ready and exciting market opportunity for them. How much revenue and profit were the Canadian colleges missing by failing to address this market? How many potential students were failing to enroll and pay dues? How big was the unmet market demand?
Creating the awareness of that market opportunity in the eyes of Canadian colleges was the first challenge. Proving that Police Prep could best fulfill that demand was the second challenge. Did those early pitches focus on creating awareness of, and passion for, the exciting market opportunity? Or did they focus more on Police Prep’s capabilities and solutions? Pitching in the right order is imperative.
Another mistake often made is treating these meetings as “sales pitches.” As soon as you go into seller mode, your audience goes into buyer mode. Buyers try to protect themselves. Caveat emptor – let the buyer beware. Buyers try to filter what sellers say for exaggeration, hyperbole and hype.
Instead, approach these meetings as an analyst. You have analyzed what you believe to be an excellent business opportunity for Police Prep and for the college. You are here to share the results of your analysis and to see if working together could be of mutual benefit. That slight change in attitude and tone can often lower defences and greatly increase acceptance.
Now that Police Prep has some 20 colleges on board, the company has to work hard to keep them coming back every year. It’s obviously important for entrepreneurs not only to work hard to get business, but also to keep business. What can entrepreneurs do to maintain and build existing relationships?
Ron Close: Last year’s courses presumably worked well for the colleges and for Police Prep. It is much easier and cheaper to keep an existing customer than to find a new one. So Police Prep has a tremendous opportunity here to truly partner with each college to include it in product enhancement and development, and thereby solidify the relationship. How can the existing programs be improved? What new related programs might also be offered to the mutual benefit of the college and Police Prep? Jointly surveying students, faculty and prospects strengthens the customer-supplier bond.
Police Prep should be actively researching best practices and scanning for market-proven ideas for adjacent offerings, and sharing that intelligence openly with customers (colleges). It’s account management. It’s relationship management. It’s partnering in the true sense of the word. And it’s very hard for competitors to move in when your relationship is strong.
Police Prep is a fairly niche company. How can entrepreneurs of unique companies find support for their new businesses? There may be no existing model in this country for them to view as an example, as happened with Police Prep. Do you have any thoughts on how they can establish their vision, seek mentoring, and so on?
Ron Close: Niche companies admittedly have the disadvantage of selling into a small market. But a small market can also be better defined and more addressable. This opportunity to focus scarce resources on a specific segment usually outweighs the downside of a smaller market, especially in a startup. Much like the Allies on D-Day, startups must first win a small beachhead in a large geography, and use that beachhead for deliberate and effective expansion across the larger market.
Police Prep’s business idea is pretty simple: Lots of people want to become cops, and many of them will be willing to take a college course that helps them improve their odds of success. Police Prep is uniquely positioned and qualified to provide the content of those programs to partner colleges in Canada. This core thesis can find support through evidence.
How big is the market in other geographies? How unique is the content for the Canadian market? What evidence exists to prove the demand in Canada? To gain support from investors, channel partners, prospects, and even early employees, startups must work on validating and proving their core thesis. Once armed with compelling facts and data, the chances of acceptance and success skyrocket.