Do you really understand your business?
A Wilderness Map For Entrepreneurs and Developing Businesses, Inspired By The Oregon Trail
Building a business is a perilous journey. You may not be likely to die of a snakebite or cholera, but the Oregon Trail is still a powerful metaphor. The fact is, most businesses fail. Still fewer grow to the level and expectations of their founders. Still fewer hold that sense of adventure and glory for more than a decade. Basically, businesses get lost.
This isn’t my first article pitching a map. It won’t be my last. But I want to focus on some key decision points; mile markers or signposts, if you will. Every business has a path through the wilderness and their is some commonality that we can all learn from. Let’s examine some big questions.
What is your business?
I have mentored dozens of entrepreneurs over the years and with my own new enterprise will quickly elevate that to hundreds. So many don’t see their business when I first meet them. Your business is an ecosystem — it is not “What you do”. Or at least it shouldn’t be.
Yes, you have an idea. Yes, you have a value prop. Yes, you create a benefit. Yes, you have a customer base. Or at least I hope, but so do all the other businesses in the market and most of you are going to fail. You need to ask deeper and better questions, if you hope to continue on this journey.
Do you have a product or a platform? Better — why don’t you have both?
Products are great. They are easy to market and sell. Platforms are a newer concept, only in that they are now easier to market and sell… they have always existed. Platforms collect information and feedback. They have real power.
Do you know who uses it? Better — do you know who should?
Most companies don’t. They know who they build the product for, not who is using it. They know who the platform was created for. They don’t think of all the potential customers who could benefit from it. Some companies succeed despite never getting this figured out… I don’t like those odds. Their success is often fleeting and sadly, they still don’t know why. More customers equals more revenue.
Do you know where your revenue comes from? Better — are you prioritizing on it?… Should I even ask about expenses?
If I had a basis point of commission on the revenue streams of all the businesses I’ve met with broken revenue models… well, you get the idea. Success in business is as much about how you price things as any other factor. Note — how you price things not what you price them at. I have seen pricing models that assured that customer adoption would break a company. Models geared to trial, not adoption. The more the customer valued the product, the less they paid! The opposite often has a company incurring mad expense for trial customers, another dangerous concept.
Are you collecting the right data? Better — do you understand the full value of that data?
Data is powerful. It has been for decades. But now, it is far more easy to monetize (the age of platforms). If you engage customer for a unique purpose, you have behavioral insights that others would pay for. This doesn’t mean sell them the data, or a list of customers, or even provide them access. It does mean that you have a unique set of raw materials to build other products from. Products that will benefit a new set of customers, for a new set of uses, and with the benefit of lower incremental expenses… powerful!
Do you have the right perspective? Better — do you have dedicated perspective?
Even if you can see all of this. Even if as you read this, you are checking the mental boxes with a big smile. Do you really have time to map, develop, and execute against each of these? Bad decisions are often a function of circumstance. Businesses can be lost more ways than they realize. You may not see it… more likely, you just don’t see it all. Much more likely, you don’t have enough time for it. Almost no one has time for it all.
Businesses hire outside talent for a reason. It is not that they can’t do the work themselves. The reason to hire outside help is almost always driven by needing an experienced and dedicated resource. Consultants and service providers have the time to do things you don’t have time to do. If they also do it better, that is an added bonus. Don’t get lost trying to do everything yourself. There are dangers on this trail worse than snakes.
Thanks for reading! Don’t get exhausted. Get help.
