I’ve witnessed the following speech many times from entrepreneurs.
“This new product idea is great! The potential market is everyone in the USA who owns a computer. To be conservative, let’s say that’s 100,000,000 people. [The calculator comes out.] I think we could sell the product for $20, but let’s be conservative and say $10. [tap tap] And just to be super conservative, let’s say that only 1% of people buy it. [tap tap tap] Whoa, that’s $10,000,000. We’re rich!”
At this point everyone starts dancing around the room and planning ways to spend the millions that just popped out of the calculator. Often this is followed by crying a year later.
When George Browning and I were starting Alien Skin Software in 1993 we talked to Don Rainey, an experienced local CEO. We mentioned our calculator millionaire numbers and estimated that easy money would be pouring in soon. Don laughed and said, ”Guys, I promise that if you ever get rich you will have earned every penny.” I love that quote.
At the beginning of a business financial estimates are pointless wild guesses. The only sure thing is that there is a lot of work to do, so get to it. Challenging work is the reward anyway, not the money at the end.