The Reasons why People should Start A New Business.
In the past time, people will ask whether they had meals when they met each other. In South China, everyone will ask you whether you are earning eatings instead of doing business. I think eating is the most important goal in our lives, which means that to survive is the most important factor in our lives. Why do we need to start a new business? I believe most of entrepreneurs start their startups because they want to survive, want to live better or want to improve their family’s lives.
There are five important stages (demands) for people. Survive, Quality, Ostentation, Feeling and Spirit.
The first stage is survive. This includes a company and a person. We have to survive by ourselves and have to know why we need to raise funds. We need to think about what we can do without investment. We cannot say we can do something if we can get a new investment. If we think so, it’s very hard to go the the second and third steps. That’s why survive is the most important factor to start a new business.
When we can survive in the society, we will pursue the next thing, quality. We want a better quality lives including eating better but not just eating enough, including living more comfortable but not only a bed, including moving faster but not only riding a bicycle and so on. That’s the second stage which is to pursue quality.
If we survive and get a better live quality, we will generally enter the third stage, which means ostentation. It’s because we need to confirm we are living better than others and we are doing better than others. Ostentation means we do not only satisfy with only eating and wearing Nike or Adidas shoes, but to use LV bags and Burberry coats. We do not satisfy with Suzuki cars but Ferrari cars.
The next stage is feeling. When we succeed, we will enjoy more people to know our success which includes writing a book, autobiography, or even to take a film. Someone may want to go travel or enjoy arts. These things are all belonging to feelings.
The last stage is spirit. After travelling around the world, we will be back to our origins. We will think why we are living and why we worked so hard before. If we can get a higher stage in the spirit, we will want to hand down a lot of our things.
These are the five needs of human beings. I found this concept is very closed to Maslow’s hierarchy of needs.
Actually starting a new business or making a product is also divided as five stages. Last 20 years in China, most of the successful entrepreneurs just do the first two things, survive and quality. For example, survive means we go to a well or a river to get drinking water. But quality means a company produce bottle water to satisfy our drinking demands. 20 years ago, Chinese seldom buy new clothes for their children. The younger ones always wore the clothes from elder brothers and sisters. At that time, several clothes companies like Seven Wolves and Anta Sports came out. They earned money because they satisfied our demand of survive and successfully transform their companies to the second stage to produce better clothes.
At the recent time, we can see Chinese are entering the stages of ostentation and feeling. Many Chinese are buying BMW, Bentley and even mansions. These things are all ostentation things. On the other hand, the strategy of government also includes to promote culture and creativity. These things are all feeling things. It’s not difficult to think that the country wants to push all the people to the fourth stage.
We all know that the spirit is the highest stage in the area of product. I saw a post about what’s the strongest business model in the world. It must be religions such as Buddhism and Christian. You can see temples and churches everywhere when you travel around the world. When you go to the travel spot and see the temples and churches, they don’t provide anything about survive and quality, but they provide spirit and earn the most.
As for the development process of company, IT industry is very lucky because IT ignore the first two stage but focus on the last three stage --- ostentation, feeling and spirit. The things of ostentation and feeling are entertainment products and games. Zhengtu which was a game released by Giant Interactive Group Inc. has only several million users and paid users are less than 100 thousand. Less than a thousand users pay over 40 million dollars in this game every year, someone even paid over 10 million dollars. The reason is because this game is selling feelings that the player can be the king of the game.
Let's focus on the successful products and companies in the world. Walmart provides most things between survive and quality. Toyota, Adidas and Nike provide most about quality. Louis Vuitton and BMW provides most about ostentation. Generally, products which can satisfy with only the first three stages can be very successful.
What about the most successful products which can satisfy with all the stages? Yes, as you already know, it's Apple products. Why does Apple have the biggest valuation? If you pay attention to look at their products, they basically satisfy with five stages. At first, this is a phone which can satisfy our most basic demand. Secondly, the quality is the best in the mobile area. Thirdly, it's to show your status like Macbook and Apple watch even you cannot use them properly. Fourthly, thousands of applications provide you things of feelings such as game, photo and movie editor and etc. At last, the spirit is Steve Jobs. Although Steve has passed away but he did really become the leader of spirit. The reason why many people buy Apple products is just because of him. Therefore, a company or a product will get a big success if it can satisfy with all the five stages.