Know Thyself... and Be Honest!
Reflection and Examination: The Starting Point
By Michael Brewer, Principal Consultant
I recently conducted a completely unscientific, informal poll of nearly 5,000 entrepreneurs on social media to find out what the three most frustrating and difficult obstacles were for them in starting their own business. Answers came in from brand new entrepreneurs and from seasoned and successful business people all over the country. Some have barely been in business for a year, and others are in their third decade. The responses were personal and anecdotal, but they were also powerful in that there were striking common threads across all ages, levels of experience, and types of businesses. So important to success are these common threads, I’ve decided to write a four-part blog series spotlighting each one in depth. I’m including interview content with entrepreneurs across a broad spectrum of business types and sizes. I think you’ll find the insights and lessons they provide will mirror some of your own, and that’s a good thing. It means lots of people before you have had the same difficulties and overcome them. It means in all probability, there are a few basic, fundamental things you can do that will produce big, positive effects. The first common thread, unsurprisingly, is the very first step in starting a new business.
Defining who you are and what you do:
Over the years, I have met and worked with all manner of business owners and founders. Products, services, high end, budget, huge international projects all the way down to locally-focused not-for-profits. The one factor that does more to set the successful ones apart from the unsuccessful ones is that the successful ones know who they are as a company, what problem they really solve, and how those two things connect. That seems simple, but it requires a lot of self-examination followed up with a lot of dispassionate, open-minded research on who your real customers are and how they see the world. Let’s talk first about the “who you are” part.
In this case, I’m not talking as much about you as a person or as a business owner – I’m talking about your company. A good friend of mine told me recently “You” don’t do anything. Your company does. Even if you’re a sole proprietorship handling all the work yourself, if you’ve gone to the trouble of establishing a company, that company is what people are hiring. Otherwise, don’t bother branding it at all; just work under your own name and that’s that. So for the purposes of getting started, you need to know exactly who and what that company is (and isn’t). Are you high tech? Low tech? Mass production? Custom one-offs? Do you work globally or locally? There is some overlap here with the problem you solve as a company.
You have to know what problem you solve, and what solving that problem is worth to people. It means clarity on a couple of fronts. First, remember, you’re never just in competition with other businesses who do what you do. You are also in competition with people’s garden variety inertia. No matter how unique or special your answer is, there are other ways of dealing with the problem. You have to be able to overcome the current, familiar ways with such a compelling value that you can steal market share from the “known,” the incumbent, the familiar, and the comfortable. The great mistake is assuming there’s no competition just because no other companies do what you do. You’re in competition with every other answer to the problem you address – even “doing nothing.” Never forget: If there’s a need and there are customers, there’s competition. Second, you have to know where you stand in the field of alternatives, where your value lies, what makes you better or different. The best value propositions are very often ones that address the gripes people have about the solutions they happily rely on every day. Consider: many times, things evolve as add-ons to someone else’s innovation. The current status quo is nothing more than generation after generation of bolt-on modifications to a once-original idea. But if you can ask the right questions, reframe the problem and answer it at an earlier stage, or take aim at the inconveniences other solutions neglect, you may be onto something. In other words, if you learn to see the problems created by other people’s solutions, then target those areas with your own solutions, you can not only bring value, you can change the way the whole world works.
In 1983, Martin Cooper did something no one before had ever done. He placed a cell phone call. Up until that day, you had to call a place to call a person. Up until that day, there was no “your phone.” There was only “the phone.” If you wanted to talk to someone, you had to know where they would be and call that place in hopes of reaching them. After Martin Cooper’s innovation, you could just call a person. In 1998, William Lo saw a world without “Be Kind, Rewind” stickers, late fees, and getting dressed in something other than your PJs to go rent a movie. When iTV launched in Hong Kong, it ushered in a whole new era in how we rent and watch movies. At the time, it was a huge, $1.5 Billion gamble. Now, you probably can’t imagine life without streaming movies on demand. What’s the point of those examples? Well, the are examples of solving the same problem as everyone else, but in a different way. Blockbuster was the king of video rentals, and its competition saw the problem the very same way Blockbuster did. Their whole business was based on finding a better way to stock, organize, rent, and recover video tapes and DVDs. Streaming services didn’t look at the “problem” as one of movie inventory and availability. They looked at it from the standpoint of ditching your PJs, getting dressed, going to a box store, looking for titles, and facing the hassle of bringing it back when you were done. In solving that neglected part of “the problem” for its customers, streaming services eliminated the problem that Blockbuster and others like it addressed in the first place, and along with it, their reason for being. No one with a new phone service would ever displace Bell. No new video store could hope to unseat Blockbuster when it came to solving the movie renting problem. But a novel approach to the same problem could change the game altogether by solving the video store problem. Not a different approach for the sake of being different; a better approach. I’ll say it again: Know what problem your company solves, and know why it’s both different and valuable!
Let this marinate a bit. Put some thought into it. Have good, accurate, concise answers for the questions we’ve discussed here: Who are you as a company? What do you do as a company? Refine the answers. Ask them again and again, going a little deeper each time you answer. Play that little kids’ game of “Yeah, but why?” Every time you get to an answer, ask again and again until you’re at least five iterations or refinements deep. I think you’ll be surprised at how much it helps you develop a strong and novel starting point for your company. That will give us a great jumping off point for the next installment in this series, in which we’ll turn our attention from the inward-focused self-assessment we’ve discussed here and we’ll start looking in some depth at how to define your market and recognize your customers.