What entrepreneurs should focus on earning and how!
To save you a lot of time, the answer to the question is trust. Entrepreneurs should focus way more on earning trust, than on earning money. In the start that is. Let me explain.
Money makes the world go round, no doubt about that. In the world of business, you won’t last long without a focus on actually earning money. Money makes it possible for you to grow your business and paying those working for you, and yourself. To get some money of your own others have to part way with theirs. This transaction suddenly turns them into customers and you into a supplier, a supplier of value.
Though money truly is important in a business world, the transaction that results in the cash flow is highly underrated. How often I’ve heard the arguments “Oh Brian we just have to build the perfect product, and people will come”, “Oh Brian people aren’t buying because of a lack of features” or “Oh Brian we just need a proof of concept and the sales will follow”. In many of these scenarios the most important issue isn´t the product, it’s the lack of trust.
Simon Sinek describes how we would choose our neighbours daughter over a more qualified stranger when looking for a babysitter. This should be fascinating for entrepreneurs. On one hand you can have the perfect product, but without trust, it won´t sell, but, on the contrary, you do not even need that good of a product, as long as you’ve got the trust from others that you are capable and will do your best.
Trust can compensate for not having the perfect product, which is hugely important for entrepreneurs working with adapting their business to the market. Trust can make all the difference between success and failure as proven by Coolest, initially a failure at Kickstarter, but later turned into one of the most successful campaigns ever. The success of Coolest second Kickstarter campaign came partially because:
We had a group of passionate supporters from our first campaign, ready to take up the charge and share among their friends.
Back in the sixties the term liability of newness was introduced, a term covering the challenges new organisations are facing. To put it into an entrepreneurial context: Entrepreneurs must establish their own legitimacy as founders as well as the legitimacy of their new venture to access resources they lack, such as financing, employees, suppliers, customer demand and government approvals(Zhang & White s.2).
To earn customers trust, entrepreneurs need legitimacy from them, and this leads to the last part of this article, where you as an entrepreneur should take note. The equation I would like to introduce for earning trust is:
Vision + ambition + execution = trust
To earn the trust of future customers, you need to have a compelling vision; a vision that your customers shares; a common cause you´re fighting for. But a vision isn’t enough you need to show it. This is where entrepreneurs don’t pay enough attention, and why the selling part is getting difficult. Trust isn’t earned overnight; it takes time and effort, and you need to show it. Coolest didn’t succeed during the first Kickstarter campaign but successful the second time. The trust earned came partially from executing over and over again. If you want to build a trustworthy relationship as an entrepreneur, you need to execute several times. The first value you are creating for your customers shouldn´t be your product or service. Finally, your execution needs to be ambitious, showing that you means business and are ready to add value to you customers.
Entrepreneurs, especially the new and more inexperienced, neglected to focus on earning their customers trust, which shows when they lack the customer engagement when they finally launch their business. Oh and this will also force an early customer involvement!
Execution isn’t you making the final product or service. Instead, it’s your ability to deliver value to customers as fast and often as possible. This will earn you their trust, and they will be ready to buy from you, once you launch:)
