The first step to starting a business is figuring out whether there’s even a need for what you’re hoping to sell. Post-legalization, the first cannabis start-ups benefited simply by being on the market the earliest. Moving
forward, any savvy start-up will likely have to find and develop the idea behind their product or service if they want to be successful. That may mean thinking about what you will do differently and defining yourself in more specific terms than just
Are you opening a dispensary or starting a tech company? What needs are currently unmet by the industry? Then, ask questions about whether the idea is scalable and profitable. Finally, think about your pricing, target market, and how your idea works within
current legal frameworks. Doing this research at the outset will help set your business apart.
“Validate that what you have to offer is actually valuable, not just something that your friends and family say ‘oh yeah it’s a great idea,’” quips Krista Jennings,
a business strategist who works with start-ups looking to scale up. “In the early stages of their life, start-ups are really susceptible to their own echo chambers and the love of their own idea, but that enthusiasm can’t be the only thing
that drives your business forward.”
Defining and setting limitations on who you are and what you offer helps your voice and ideas come across to the right people. First, Jennings advises that businesses take stock of what exact problems their product or overall brand solves
for their ideal customer.
“You really need to just look at the three to five top players in the same area you’re looking to break into, and ask yourself, why is it that you like their business?,” said Jennings. “What’s so unique about their business
that sets them apart?”
Jennings offers that you can mimic those successful models, or more importantly, take note of what your start-up could do better. “With the other people in my industry, they’re just as talented, but their customer service is horrible,”
she continued. “I’ve made the intentional decision to prioritize my customer service. That one thing can make a huge difference. The world of cannabis is very similar. The rush to get established in the industry post-legalization has left
room for start-ups to be thoughtful about what they’re bringing to the table, because being first isn’t going to cut it any longer.”
When comparing your start-up idea to the companies already in your field, here are some suggestions on what you can focus on to set your idea apart.
"The rush to get established in the industry post-legalization has left room for start-ups to be thoughtful about what they’re bringing to the table, because being first isn’t going to cut it any longer.”
When researching the competition, you should find out what your cannabis customers are willing to pay for similar services or products, and understand what other companies are hitting those price points.
Market research can be valuable to your start-up in its earliest days, but once you’ve done the research and put together a business model, that doesn’t mean your work is over.
“It’s not something you do once,” Jennings advises. “It’s something you’re constantly doing because the landscape of consumers, consumer behaviour, consumer experiences, are always evolving and changing. Being knowledgeable
about the different moving parts in your industry is a good thing to have a handle on.”
Once you’ve established your focus, the first feedback you get from your customers may help inform your steps forward. The more focused your idea is at the outset, the better information you’ll likely get in return.
"Market research is not something you do once."
“Let’s target this specific group of people and see what data we get back after six to eight months,” she explains about her approach. “Within that timeline, you'll be able to gather a lot of information before the eight month
mark is even reached. You really want to understand their behaviour, when and what they’re most likely to buy. Be clear about the information you want to get from it.”
Focusing your cannabis start-up early on can help you differentiate yourself from your competitors, and help you come to market with a strong offering that is more likely to succeed.
“A lot of times people wait until they build out this lofty system or sales funnel to focus their idea, but they haven’t even tested to see if the product is really valuable and something people want and are willing to invest money in,”
“It’s important for you to figure that out and differentiate that very early on before you invest time and energy into all these tools, automation, all these things that will make your business run very efficiently.”
This is not an offer to sell or a recommendation to trade in any securities. This information is provided as of the date hereof. This document contains data obtained from third parties that Canopy Rivers has not independently verified. This document also contains forward-looking information within the meaning of Canadian securities law, which is based on certain assumptions. While management believes these assumptions are reasonable based on information available as of the current date, they may prove to be incorrect. Many assumptions are based on factors outside of Canopy Rivers’ control and actual results may differ materially from current expectations. Forward-looking information involves risks, including, but not limited to, the risk factors set out in Canopy Rivers’ most recent Management’s Discussion and Analysis and Annual Information Form. You should not place undue reliance on forward-looking information. Except as required by applicable law, Canopy Rivers assumes no obligation to update or revise any forward-looking information to reflect new events or circumstances.
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