Business Resources

With the SuperBowl coming up – it’s only natural for everyone to be thinking about football.  I’m not a huge football fan, but I enjoy watching the games regularly.  Living in San Diego now and growing up in Sacramento make me more of a 49ers and Chargers fan – but I really like to watch the Patriots play football.  You know why?  They play the game differently.

Again, I’m not a football nut, but by watching just a few games and listening to the commentary it’s clear they are looking at the game differently.  Here are the kinds of soundbites you hear from announcers and sportscasters during a Patriots game:

• Most teams will run in this situation, but you never know with the Patriots!
• No other team in the NFL will go for it here, but I wouldn’t be surprised if Belichick does.
• This is a textbook passing down – but who knows with the Patriots.
• The problem with the Patriots is that you don’t know how they’re going to come after you.
• The Patriots say they need to control 2nd down this game.  Most people think that controlling 3rd down is important, but apparently 2nd down is key for the Patriots today.

These five quotes are all synonyms for the experts to tell us, “We have no idea how the Patriots play football.”  Think about this for a moment, it’s quite remarkable.  The team to beat in one of the most competitive and public industries in the world is having game after game recorded, transcribed, and broken down by the best adversaries in the world (other current and ex-NFL coaches)… and no one really seems to knows how they play football!

Does that strike you as odd?

This is obviously only an interesting fact because they seem to be winning – a lot.  The irony of the situation is that the other teams only seem to be convinced that they’re different now – after years of league domination – even though they had plenty to observe earlier.

This happens in other businesses too.  You see this when new competitors or product lines enter a market and do remarkably well.  Think Southwest Airlines, Walmart, Google, Amazon, and even “Reality TV.” When these companies first started, they really started by reexamining the rules of the game – and making changes to their offerings to exploit the opportunities available to them better than their competition.  The truly strange thing is that competitors will almost certainly chalk it up to something unique, external events, circumstances beyond their control, getting lucky, and a host of other reasons which constitute it not being their fault.

This is why you don’t really have to bother concealing your success most of the time.  Your competition won’t take you seriously until it’s too late for them to really do anything about it.  Once they do see what’s happening you’re already out there in the lead – with their customers!

Can you reexamine the dynamics of your business to take your competition by surprise?  Just about any industry is ripe for this kind of opportunity – but especially established ones where the existing players are all complacent to fight the battle in familiar terms.

Can you think of your business in a slightly different light?  Maybe one  that is more insightful to your customers demands or desires?  If so, you’ll be amazed at how long you’ll be ignored while you rack up the additional sales, additional satisfied customers, and additional market share while your competition is making excuses for themselves!

Some people say you should build a product that you would use yourself, making you the target market.  I’ve also heard the flip side that you shouldn’t build products for yourself because you’re probably smarter than, or different from most people outside of either Silicon Valley, or wherever you’re at.  In either case, knowing who your audience is should be on your list of top priorities.  If you know who your customer is, it tends to be easier to build your product for them.  It’s also one of the most fundamental things you can ask of yourself as a startup or small business owner.

In advertising (which can take on many forms), not understanding your audience can cost you a lot of money, which can be said of a lot of other things like product development.  There are five categories that you can break an audience into, which makes a lot of this advertising and product development stuff easier:

Household consumers

Most of the mass marketing is targeted to this group.  Typical companies that would advertise to these people include McDonald’s, Toyota, Levi Jeans, and Budweiser.  There are about 109 million households in the United States and 292 million household consumers.  Annual retail spending is approximately $5.5 trillion in the United States with advertising being huge in this market.  An example audience definition might be “women, 25 to 40, living in metropolitan areas, with incomes exceeding $40,000 per year.”

Members of business organizations

Most people in this group create business and industrial goods/services, like office equipment, machinery, software, and supplies, and the typical approach to these groups is personal selling.  Advertising is primarily used with this group to help promote awareness and a positive attitude towards buyers.
Members of a trade channel

This group consists of retailers, wholesalers, and distributors and are suitable target markets for producers of household and business goods/services.  Most producers rely on this market to reach their target audience, for example, the Nintendo Wii would struggle to reach its market without the proper distribution trade channels.  The method used most for communicating with this group is personal selling.

Professionals

This includes doctors, lawyers, teachers, accountants, and others with specialized skills and certifications.  The members of this group usually have specialized needs and interests, so marketing efforts should emphasize a product or business’ unique features that are designed specifically for a particular market.  The main method of reaching this market is through trade journals, which are magazines specifically written for members of a trade and typically contain highly technical material.

Government officials and employees

This deserves its own category since government spending makes up a significant dollar volume of purchasing on behalf of federal, state, and local governments.  A large part of the demand in this category consists of office furniture, vehicles, construction materials, computers, fertilizers, and business services.  The major method of reaching this market is through catalogs, direct mail, and web-based advertising.

Most people start their new business or company for themselves. This is fine, our free-market economy is structured so that self-interest rewards the group generally. Despite some well deserved criticism, Walmart’s “always low prices” have helped grow the US economy for everyone. So just to be clear, I’m not knocking the idea of going into business to make yourself better off, in fact I’m all for it! However, I’m becoming more and more concerned that some entrepreneurs don’t realize that they have to focus on everyone but themselves in order to really get it to work.

Customers Matter More Than You

At the end of the day – a business makes money because you can do something that someone else is willing to pay for. This isn’t because they’re helping you out – it’s because you’re helping them out! If you don’t focus really hard on them, someone else will and you’ll be out of business. Always put their needs front and center – don’t expect them to do you any favors. Keeping you in business is not their job – keeping them happy & coming back for more is your job.

Employees Matter More Than You

After a while it won’t be you making your customers happy, you’ll have to hire employees to help. In fact, after a while, these people will be your company to the rest of the world. They’re the ones that please customers, partner with suppliers, and hire new employees! Keeping these people motivated and aligned with your company’s values, mission, and strategy are what drives consistent increased growth for your company.

Investors Matter More Than You

Your investors gave you the chance to do something special. They believed in you when no one else would. They don’t do it for free – that’s for sure – but that favor needs repayment. If you don’t take care of your investors, even at your own expense to a certain extent, you’re really marginalizing your future chances to ask them for help again. Ask yourself, are you acting like the kind of guy that other people should trust with their money? Until you’re a proven commodity at starting, executing, and exiting new ventures – you will need to give in to them more often than they give in to you.

Suppliers Matter More Than You

You can’t treat your suppliers like the enemy. The day will come when you’ll need their help and you’ll be glad they owe you a favor. Don’t go out of your way to disadvantage yourself, but also don’t make an enemy out of them either. Negotiate win-win relationships. Find out what they really need from you and help them get there with those issues. Ask them to do the same for you. If you don’t maintain good relationships with your suppliers, they won’t be able to double-time your order when your customer demands more, or take back some inventory when your customer cancels the contract at the last minute.

After Everyone Else is Taken Care of…

You can finally enjoy the benefits of your business! Only once all of these constituencies have been satisfied are you able to say you’ve succeeded. Even then, success is fleeting, you’ll have to wake up tomorrow and do it all again! Still, the rewards of balancing all of these dimensions can be thrilling and will help you focus on delivering real value to the economy. If you’re delivering truly better products or services to people – you’re actually making the world a better place – and people are going to be happy to pay you for that!

About Chris Harris

For 13 years Chris Harris has been successfully developing technology solutions and creating winning business strategies for both start-up and brand-name companies. Chris co-founded Inventure Global, a San Diego headquartered IT consulting firm with offices and programmers in India offering sophisticated IT and technology planning, design, and implementation services for new and growing businesses looking for experienced talent and intelligent support. Inventure Global also maintains the New Venture Outsourcing Blog.

Recently I was asked to define the one thing that’s most important to a business. My answer is two words: competitive advantage.

Technology, Patents, and Secrets

There are a lot of people who mistakenly believe that proprietary technology, patents, or trade secrets are the hallmark of breakaway businesses. This is only sometimes true. Most of the time it’s only true for a little while. Huge drug companies today are starting to panic because their drug patents are expiring and the competitive forces of the market are pushing their unsustainable returns back down to earth. For a technology example, Google began its life as a quantum leap better in search than anyone else. Today they’re still better, but not in a different stratosphere. MSN, Yahoo, even Ask are all catching up – because the algorithm gap between them is shrinking. With enough time & smart people your technology, patent, or secret advantages will erode.

Comparative Advantage

There’s a great story where an economics skeptic asked famed Nobel laureate economist Paul Samuelson to defend his trade. He asked Samuelson for a “meaningful and non-trivial” result that came out of economics. Samuelson replied with “comparative advantage.”

Comparative advantage asks you to look internally at your own capability to produce a product or service. You should always focus on whatever it is that’s most profitable for you to produce. Even if you know you’re not the best in the world at it. The law of comparative advantage says that you’re doing as well as you can if you spend your resources there.

Barriers to Entry

The next thing to examine are your barriers to entry. How hard is it for a newcomer to become your competition? Ever wonder why the field of real estate agents, stock brokers, and mortgage brokers never concentrates as it does in other fields? It’s because there are very few barriers to entry. New entrants come into the field every year when it’s profitable, and leave when it’s not. To counter this, consider trying to raise the barriers to entry in your industry. This is exactly what e-trade and other online brokers did. They created a technological barrier to entry at first, but then converted this into an operating barrier to entry. You can’t offer trading fees so low if you handle clients one-on-one. You have to build a big website with automated systems to be profitable at $10 / trade.

Network Effects

And finally there’s network effects. If you think about is, how much do you think the very first telephone was worth? Nothing! You had no one to call. The second was worth more, assuming you wanted to talk to the first guy. The third, fourth, and 1,000,000th telephones were each more valuable – because more and more people were involved in your little ecosystem and could be relied upon to be accessible via telephone.

This is why cell phone companies are willing to let you talk to anyone on that same carrier for free. Each person who’s on that carrier increases the benefits of being on that carrier – which means they have a more compelling story for signing up new customers!

This same network effect manifests itself in various types of businesses. Ebay (with its network of buyers and sellers), Microsoft (with its network of software developers for its operating system), FedEx & UPS (with its network of distribution hubs and distribution points).

Conclusion

Nothing benefits margins, growth, and sustained profitability than increasing your competitive advantage. You want every day you’re in business to be creating distance between you and your competition. If you focus on that, success is sure to follow.

About Chris Harris

For 13 years Chris Harris has been successfully developing technology solutions and creating winning business strategies for both start-up and brand-name companies. Chris co-founded Inventure Global, a San Diego headquartered IT consulting firm with offices and programmers in India offering sophisticated IT and technology planning, design, and implementation services for new and growing businesses looking for experienced talent and intelligent support. Inventure Global also maintains the New Venture Outsourcing Blog.

Entrepreneurs are probably the most motivated people on earth. I don’t know if there is any other job description that requires more passion, energy, and commitment than an entrepreneur’s. Do entrepreneurs even come with job descriptions anymore?

Part of the weight we carry is that we are at risk to losing some of the steam that initially got our engines going. Motivation is important because without it, your productivity is going to plunge. If things aren’t getting done, your chances for staying ahead and meeting your goals is probably only getting more and more difficult.

We’ve all got roller coasters that we experience. One day we’re up high after getting a round of funding, or pushing another release. The next we may realize that push caused a bug, which could be catastrophic to the overall survival of the startup and needs fixed immediately. Or your investors pulled the plug at the last minute. Anything can happen, and the motivation is going to be there one minute and disappear the next.

Without sounding too much like an AA meeting, you first should realize that your motivation will come and go, and you’re probably not going to want to be so emotionally invested that you rely upon your motivation as a source of getting things done. What I mean is there will be times you need to detach yourself from your work. Don’t let your emotions control your productivity.

I studied sales and selling like a religion a few years back, and I listened to a lot of Jeffrey J. Fox material, specifically How to Be a Rainmaker. There’s a chapter he covers that talks about how all rainmakers will experience bad days and droughts, and emotions will take their toll on your attitude and productivity. Even the best will get down and feel discouraged. But when those times hit, you need to stop paying so much attention to “how you feel” and just flip the switch for auto-pilot. That means you stay productive no matter what. Forget any feeling about being tired, hurt, upset, discouraged, or whatever it is that’s sitting deep down in your stomach, and just focus on what needs done right now.

I think there’s a reason we tend to overemphasize our own emotions, and allow ourselves to be controlled by it. A lot of us live in a society where our emotions are pampered and products are created for the sole purpose of making us feel happy or energetic. I’m not saying you shouldn’t drink coffee, but you should discipline yourself to be at a level of productivity without any dependency on outside stimuli.

Emotional detachment is a great tactic for when you’re in a drought and feel like there’s nothing in the world that will help you out (including Starbucks). However, if you look into Steve Pavlina’s materials, he has his own recommendation that involves a lot more soul-searching.

Steve went through a stage in his life where he tried everything imaginable to motivate him. And while he could find ways to motivate himself in the short-term, he wasn’t able to stay motivated for long and sustained periods. After a while, he realized that the problem wasn’t actually his motivation. The problem was with what he was doing. He realized that he wasn’t doing the type of work that he really wanted. His passion was in doing something else, so he eventually changed what he was doing and the motivation came back.

For the short term, we’re always going to get down at times. Detach yourself emotionally when that happens and reconsider your goals. I’ll bet this year’s earnings that if you pick up any motivational book in the world, there will be at least one chapter dedicated to goals. I would say that most of us don’t have goals right now, and that’s a problem. Just imagine what it would be like to try and win a football game without a time limit. You’re basically doing the same thing to yourself if you’re not setting goals. You’ll never know when you’ve made it or not, or whether your efforts result in a success or a failure. If it’s a failure, who really cares anymore? Just start something different, but you should at least know the result of your work. If anything, your goals will motivate you to either achieve and succeed, or fail and move on to bigger and better things.

If, however, you’ve been struggling with whatever it is you’re involved with for a long time, and you truly can’t find any source of motivation, think real hard about what it is you’re doing. If you’re scratching your head right now (or banging it against a wall), consider looking at some of Steve Pavlina’s articles on how to find your inner passion. For most of us, we probably need a reassessment of our own goals, or simply a temporary detachment from our emotions.

About the Author

Jared Tame is an entrepreneur who has worked with hundreds of clients on website design, marketing, and sales, and currently works with StartPal providing high-quality, low-cost website design and e-commerce solutions to small businesses and startups.