No Shortcuts in Business

Recently, while researching my thesis, I’ve been having a lot of conversations regarding the “science of business”. Both thought-provoking and mind-numbing perspectives exist on the subject, so I began writing about it to try to isolate its boundaries and value. The goal was to prove its existence in a fashion that was digestible and actionable.

The core, go-to statement that has been serving me well to either focus these discussions, or summarize the key point, has been “there are no shortcuts in business”.

Like winning the lottery, the potential returns of a big hit are mesmerizing, but the odds are significantly against you. Additionally, just like the lottery, you can theoretically wait for the right time with enough money and buy your way into success. But even this isn’t sustainable. But why not?

My thesis regarding business science is summed up in this equation:

Business Science is a series of equations.

Sustainable Business Success is the highly-likely result of a great opportunity led by one or more investable founders. And the more investable founders, the higher the likelihood of sustainable success. Let’s unpack that a bit.

Sustainable Success

Starting with the result, success that remains profitably-valuable for its customers to a degree that investors, staff, and founders remain engaged, rewarded, and happy.

Great Opportunities

A great opportunity is a set of its own equations.

1. Firstly, it’s a problem to solve, and an intimate understanding of its realities. This is an equation of all of the current factors that cause, influence, and foster/fostered-by the problem, and specifically for whom.
2. Then you need to come up with a solution to that equation, which is simply a way to introduce change-worth-taking into the existence of those who suffer from the problem. This itself is an equation of the ways that they need the change, will afford change, and you can deliver change as both holistic and either indirect or direct value.

At this point, a lot of people believe the step two above is a product, or a great opportunity, but it is not.

With these two equations, you build one or more Minimum Lovable Products that build the bridge between the problem and solution equations. A product directly, and only, is aimed at solving the solution equation.

Only then should you build a business model, containing GTM, defensibility, relationship, partnership, pricing, and value-stream strategies sufficient for three things:

1. metrics that demonstrate the impact on the problem equation
2. metrics that demonstrate the understanding of the solution equation
3. metrics that demonstrate the realized value (and gained/lost by whom)

Without the customer being the core focus of the corporate culture, a great business model can’t exist, period. Again, a great business model is impossible, which can sustainably make a profit, without knowing your customer, what pains them, how you can viably change the pain into a value, and only in a way that they will be able to be your customer, and that also includes market timing, ease of purchase, and socioeconomic factors.

Investable Founders

One of the most interesting findings that I uncovered during my discussions with VC and Angel fund investors is that they are most concerned with bad founders. That was manifested in several different tones, but all of them resonated around the compounded concept of a founder, or founding team, that didn’t know themselves, the importance of a metrics-based organization, and when to delegate their weaknesses (i.e. get out of the way, including stepping down.)

There is a need for the psychology of founders to be evaluated, just as much as the opportunity. We can all fairly honestly say that bad leadership over a great idea is worthless. We‘d also say that great historical leadership is no way to measure the value of a new opportunity, too. Both the founders and the opportunity must be tested early and in direct context with each other.

Ah Ha!

A founder is taking a shortcut if they don’t understand their own motivations, experience, triggers, and limitations to self-actuate as a champion of the problem.

A founder is taking a shortcut if they don’t drive a method for interrogating, isolating, and defining a problem. A simple way to know they are not taking a shortcut is to ask them to explain the problem as an equation.

A founder is taking a shortcut if they don’t build their solution equation based solely off of the problem equation, because they will not be able to measure change value, nor track the levers’ impact when the mud gets thick.

A founder is taking a shortcut if they don’t build their products to solve the solution equation because they will not really understand, beyond superficial intuitiveness, how to profit off of the problem.

1. All businesses fail because they look for shortcuts to success.
2. All long-term successful businesses focus their core culture around the customer, their pains, defensible change-agents, and desirable products; in that order. That allows them to evolve as life moves the goal posts.
3. The worst shortcuts show up way after the investment and hurt the customers, the industry, and peoples’ livelihoods.
4. There are no shortcuts in business.

I’ve codified this against Simon Sinek’s concentric Why, How, What.

Business Science Codified