Artikel 1
Product > Strategy > Business Model
One of the mistakes I see entrepreneurs make is they move to business model before locking down strategy. The way I like to think about this is get the product right first, then lock down the strategy of the business, then figure out the business model.
Getting product right means finding product market fit. It does not mean launching the product. It means getting to the point where the market accepts your product and wants more of it. That means different things in consumer, saas, infrastructure, hardware, etc, but in every case you must get to product market fit before thinking about anything else. And, I believe, moving to business model before finding product market fit can be the worst thing for your business.
Once you find product market fit and start thinking about business model, I suggest you take a step back and work with your team (and investors) to develop a crisp and well formed strategy for your business. Investors, at least good investors, are very helpful with this stage. If you watched the John Doerr interview I posted yesterday, you hear him talk about strategy a lot (Intel, Amazon, Google, etc). The best VCs are very strategic, have seen strategies that work and ones that don't, and can be a great partner to develop a straetgy with. This is one of my favorite things to do with entrepreneurs.
I remember back to the 2009 time period at Twitter. The service had most certainly found product market fit. And the team turned its attention to business model. There were all sorts of discussions of paid accounts, subscriptions, a data business, and many more ideas. At the same time, Ev Williams was articulating a strategy that had Twitter becoming the "an information network that people use to discover what they care about." And so the strategy required getting as many sources of information on to Twitter and as many users accessing it. It was all about network size. That strategy required a business model that kept the service free for everyone and open to all comers. That led to the promoted suite business model. Twitter executed product > strategy > business model very well.
We have also had many portfolio companies build revenue models that did not line up well with the strategic direction. And in some cases, the companies really did not have a well articulated strategic direction at all. That led to a lot of wasted energy building a team and a customer base that ultimately was not of value to the business. We have seen teams walk away from parts of their business because of such mistakes.
These kinds of mistakes are usually not fatal. Not finding product market fit is fatal. But going down the wrong path in terms of strategy and business model can be fixed. But it is painful, costly, dilutive, and sometimes can lead to a change in management.
So my advice is not to rush into business model without first finding product market fit and then taking the time to lock down on a crisp, clear, and smart strategy for your business. From there business model will flow quite naturally and you will be on your way to success.
Rujukan:
Getting product right means finding product market fit. It does not mean launching the product. It means getting to the point where the market accepts your product and wants more of it. That means different things in consumer, saas, infrastructure, hardware, etc, but in every case you must get to product market fit before thinking about anything else. And, I believe, moving to business model before finding product market fit can be the worst thing for your business.
Once you find product market fit and start thinking about business model, I suggest you take a step back and work with your team (and investors) to develop a crisp and well formed strategy for your business. Investors, at least good investors, are very helpful with this stage. If you watched the John Doerr interview I posted yesterday, you hear him talk about strategy a lot (Intel, Amazon, Google, etc). The best VCs are very strategic, have seen strategies that work and ones that don't, and can be a great partner to develop a straetgy with. This is one of my favorite things to do with entrepreneurs.
I remember back to the 2009 time period at Twitter. The service had most certainly found product market fit. And the team turned its attention to business model. There were all sorts of discussions of paid accounts, subscriptions, a data business, and many more ideas. At the same time, Ev Williams was articulating a strategy that had Twitter becoming the "an information network that people use to discover what they care about." And so the strategy required getting as many sources of information on to Twitter and as many users accessing it. It was all about network size. That strategy required a business model that kept the service free for everyone and open to all comers. That led to the promoted suite business model. Twitter executed product > strategy > business model very well.
We have also had many portfolio companies build revenue models that did not line up well with the strategic direction. And in some cases, the companies really did not have a well articulated strategic direction at all. That led to a lot of wasted energy building a team and a customer base that ultimately was not of value to the business. We have seen teams walk away from parts of their business because of such mistakes.
These kinds of mistakes are usually not fatal. Not finding product market fit is fatal. But going down the wrong path in terms of strategy and business model can be fixed. But it is painful, costly, dilutive, and sometimes can lead to a change in management.
So my advice is not to rush into business model without first finding product market fit and then taking the time to lock down on a crisp, clear, and smart strategy for your business. From there business model will flow quite naturally and you will be on your way to success.
Rujukan:
Artikel 2
Empathy: The Basic Quality Many Leaders Keep Getting Wrong
Ever wonder why some managers just can't get along with their teams? Or have you seen a boss who's lost touch with reality?
Maybe you're the leader, and you've noticed a slow-but-sure disconnect from your team. What can you do about it?
You've heard the advice time and again: Learn to show more empathy.
Empathy is considered by many to be a basic human quality. So why is it often still missing in our day-to-day work?
Many persons confuse empathy with its closely related cousin sympathy. The two qualities are definitely related, but the key to demonstrating empathy is knowing the difference.
According to Merriam-Webster, empathy is "the feeling that you understand and share another person's feelings and emotions."
Whereas sympathy involves feeling sorry for someone, empathy requires us to go a step further, and it lasts longer. Here's an example:
Imagine a colleague goes through a difficult situation; let's say he loses a close family member in an accident. We naturally feel sympathy for him. We may even write a card or express those feelings somehow. For the most part, though, we move on with our lives.
But when we show empathy, we take more time--time to remember how we felt when we lost someone close to us (or how we would feel, if we haven't had this experience). We think about how this affected our work, our relationships with others.
Even further, we try to imagine specifically how our colleague feels in this situation. We recognize that he (like every individual) will deal with the trauma in his own unique way.
Empathy has been described as "your pain in my heart."
The problem is, despite the fact that we crave for others to try fitting into our shoes, we're often not ready to do the same for them. We see this every day: broken marriages, strained parent-child relationships, deteriorating communication in the workplace. (Author Mike Robbins illustrates this perfectly here.)
If a leader can demonstrate true empathy to individual team members, it will go a long way toward encouraging them to perform at their best.
It may even inspire the team to show empathy for the leader.
That's right--empathy begets empathy.
So how do you get your company leaders--and employees--to be more empathetic?
Once, I learned the value of showing empathy firsthand. I had been working a number of years for the same organization, and was now engaged to my fiancée from Germany. As we were trying to determine where to start our new life together, my office made it clear that it was reducing personnel, and my department was being reorganized. I was being considered for a new position, and my fiancée and I decided that if I got it, I would remain in New York City and she would join me. If not, we would move.
I was told I would be informed of the decision within four to six weeks. Six weeks came and went. Then seven. Eight. Nine. The wedding date was getting closer, and I wasn't sure how much longer I could take the suspense--I didn't care anymore what happened; I just needed to know something.
After going through the normal HR channels, I decided to try something different. I wrote an email directly to Mr. Pierce--a member of the executive board who was the head of personnel (whom I had never met). Since our organization had about 6,000 staff members at the time, I wasn't sure how he would take this: I was traveling to Germany to see my fiancée in a few days, and I thought it would be great to have some news to share with her personally. (Call me a romantic. Or call me stupid--I've heard both.)
After two months of anticipation, it took exactly two days after my email to get a decision. I then boarded a plane to Germany, and less than 12 hours later, my fiancée and I were planning our new life together--in New York City. We couldn't have been happier.
Sadly, Mr. Pierce passed away some months ago. I've often wondered how many similar emails, letters, and requests he read throughout the years. A press release issued by my former agency made the following statement:
Mr. Pierce served on various committees … [and] his organizational responsibilities required that he travel extensively … Despite his workload, he was well known for never being too busy to listen to those needing assistance or advice, and he put others at ease with his warm smile and good sense of humor. His closest associates noted that people from different backgrounds or cultures were naturally drawn to him.
When Mr. Pierce read my email all those years ago, he wasn't just reading the random request of a junior manager. He was reading my deep concerns and feelings. The problem was important to me, so it was important to him.
Mr. Pierce knew empathy. My pain in his heart.
Employer or employee, empathy makes us more flexible and compassionate. It makes us easier to work with, and in the eyes of others, it makes us more human.
So the next time you realize that the relationship you have with a colleague is not what you want, take the time to show some empathy.
It might be just what the person needs.
One day, it'll be what you need, too.
Rujukan:
Here are five growth strategies that small businesses should consider. Not every strategy will be right for your situation, but some of these might offer an opportunity for your business.
1. Market segmentation
“Market segmentation” simply means picking a sub-set of the entire marketplace that you can organize your sales efforts around. Out of all the people in the world, who will you try to sell to?
Most big businesses are good at carving out their corner of the market. Then they do whatever they can to own that space.
Red Bull gets its energy drinks in front of a young, adventurous crowd: its segment of the market. Have you wondered why Red Bull owns a Formula One racing team? That’s why.
Pepsi was losing its battle with Coca-Cola to become the heavyweight cola company. Instead of trying to beat Coke at its own game, Pepsi focused on a young, fun-loving demographic. Many Pepsi commercials show younger music stars, celebrities or other young status symbols.
In other words, Pepsi stopped targeting the over-30 crowd and segmented its market. Coke is still the top dog, but thanks partially to market segmentation, Pepsi has built a very successful brand as well.
Most small business owners would be happy with building the next Pepsi, but many are afraid to eliminate part of a potential market. It can seem scary, but you need to focus on your core customer if you want a clear path to growth.
Segmenting your market comes down to making choices. Who will you serve? Who will you avoid? And which segment can you focus on to improve profitability?
2. Leveraging partnerships
Some small business owners love to complain about how they can't compete with the vendor relationships that the big guys enjoy. It’s true you can't "pay to play" like the Fortune 500s, but you can leverage partnerships in a savvy way.
For example, let's say your small business makes tennis balls and you have a technology that makes the balls bounce better and last longer. You have a great product, but you don't have a manufacturing facility, a distribution channel or any of the other parts of the tennis-ball supply chain. All you have are great tennis balls.
You may not be able to compete with the big industry players like Wilson, Penn or Prince for sponsorships or tournament partnerships, but you could partner with a tennis-ball factory and a distribution company. In fact, you could partner with them without having to pay a cent for your own factory or distribution. Just pay your partners a portion of the profit every time you sell a tennis ball.
The result? You negotiate for mainstream production and distribution without paying the huge upfront cost of building a plant or hiring a shipping company. Now you can focus on selling tennis balls instead of worrying about making them.
Big businesses can pay for partnerships up front. Small businesses have to negotiate for partnerships that pay per sale.
3. Use checklists
Big businesses have massive facilities, complex supply chains and large equipment. Managing the day-to-day operations in these environments is too complex for one person. There are too many variables to track.
Guess what? Small businesses are the same way. Small business owners have to wear many hats. If you don't hold yourself accountable and remind yourself to do something that "brings home the bacon," then it's easy to get caught up doing things that aren't essential. In the rush of a normal day, it's also easy to forget to do a critical task.
Take a page from big business and develop process lists or checklists for specific tasks and jobs. Give yourself a guide to success and a reminder to do the essentials each day.
4. Acquisitions
Perhaps the primary way that most big businesses grow is through acquisitions. Before you think I'm off my rocker by suggesting this move for small businesses, let me explain.
First, acquisitions are tough. You can easily break the bank with one bad purchase. That said, acquisitions can be a massive source of profit and a means to growth if you make a few key moves.
You know what's a good buy in your industry. Follow tip No. 3 and keep to a specific list of characteristics that you're looking for. Don't let emotion or ego play a role in a major purchase. Stick to the checklist.
Secondly, do you have the budget to buy up everyone in the industry? Probably not. I'm not suggesting that you buy something you can't afford. But you can afford some businesses, especially those that you can improve. Don't dismiss acquisitions just because you're small.
5. Become a leader in the industry
Big businesses often make their name by leading an industry. They make moves when other businesses sit by the wayside.
I was recently talking with the employees of a large distribution company that wants to do business in China. There's just one problem: The distribution company ships products for other companies and those businesses don't trust the distribution channels in China yet. As a result, the distribution company isn't selling in that region.
If there are no products to ship to an area, the company doesn't set up distribution in that area. But if there’s no reliable distribution network, nobody ships products. It becomes a chicken or egg problem where neither side wants to move first.
So what does this company do? They say, "We know you don't like the distribution there, so we're going to fix it. Then, you can give us all of your business in China."
Is it a bold move? Yes.
Is it an expensive move? Yes.
Is anyone else currently doing it? No.
Does that mean that there is a huge opportunity for growth? Yes.
What's the lesson for small businesses? Don't be afraid to solve the hard problems that everyone else avoids. There is a lot of money to be made when you're the first person to fix something.
Rujukan:
Maybe you're the leader, and you've noticed a slow-but-sure disconnect from your team. What can you do about it?
You've heard the advice time and again: Learn to show more empathy.
Empathy is considered by many to be a basic human quality. So why is it often still missing in our day-to-day work?
Many persons confuse empathy with its closely related cousin sympathy. The two qualities are definitely related, but the key to demonstrating empathy is knowing the difference.
According to Merriam-Webster, empathy is "the feeling that you understand and share another person's feelings and emotions."
Whereas sympathy involves feeling sorry for someone, empathy requires us to go a step further, and it lasts longer. Here's an example:
Imagine a colleague goes through a difficult situation; let's say he loses a close family member in an accident. We naturally feel sympathy for him. We may even write a card or express those feelings somehow. For the most part, though, we move on with our lives.
But when we show empathy, we take more time--time to remember how we felt when we lost someone close to us (or how we would feel, if we haven't had this experience). We think about how this affected our work, our relationships with others.
Even further, we try to imagine specifically how our colleague feels in this situation. We recognize that he (like every individual) will deal with the trauma in his own unique way.
Empathy has been described as "your pain in my heart."
The problem is, despite the fact that we crave for others to try fitting into our shoes, we're often not ready to do the same for them. We see this every day: broken marriages, strained parent-child relationships, deteriorating communication in the workplace. (Author Mike Robbins illustrates this perfectly here.)
If a leader can demonstrate true empathy to individual team members, it will go a long way toward encouraging them to perform at their best.
It may even inspire the team to show empathy for the leader.
That's right--empathy begets empathy.
So how do you get your company leaders--and employees--to be more empathetic?
- If you're a manager, the next time an employee comes to you with a problem or complaint, resist the 'Not again. What now?' attitude. Try to remember: You once had a similar problem. If not, someone you respect did. Ask yourself: Why does this person feel this way? What can I do to make the situation better?
- If a specific task or process is causing problems, try to work alongside a disgruntled team member, to better understand the person's point of view. Showing empathy in this way takes time, but you will often motivate the one(s) you are trying to help. Not to mention the benefits this will bring to your working relationship.
- If you are an employee who feels your manager is being especially unreasonable, try to understand why. Maybe the manager is dealing with extreme pressure of his or her own, or maybe there's a problem at home, or maybe … you get the drift.
Once, I learned the value of showing empathy firsthand. I had been working a number of years for the same organization, and was now engaged to my fiancée from Germany. As we were trying to determine where to start our new life together, my office made it clear that it was reducing personnel, and my department was being reorganized. I was being considered for a new position, and my fiancée and I decided that if I got it, I would remain in New York City and she would join me. If not, we would move.
I was told I would be informed of the decision within four to six weeks. Six weeks came and went. Then seven. Eight. Nine. The wedding date was getting closer, and I wasn't sure how much longer I could take the suspense--I didn't care anymore what happened; I just needed to know something.
After going through the normal HR channels, I decided to try something different. I wrote an email directly to Mr. Pierce--a member of the executive board who was the head of personnel (whom I had never met). Since our organization had about 6,000 staff members at the time, I wasn't sure how he would take this: I was traveling to Germany to see my fiancée in a few days, and I thought it would be great to have some news to share with her personally. (Call me a romantic. Or call me stupid--I've heard both.)
After two months of anticipation, it took exactly two days after my email to get a decision. I then boarded a plane to Germany, and less than 12 hours later, my fiancée and I were planning our new life together--in New York City. We couldn't have been happier.
Sadly, Mr. Pierce passed away some months ago. I've often wondered how many similar emails, letters, and requests he read throughout the years. A press release issued by my former agency made the following statement:
Mr. Pierce served on various committees … [and] his organizational responsibilities required that he travel extensively … Despite his workload, he was well known for never being too busy to listen to those needing assistance or advice, and he put others at ease with his warm smile and good sense of humor. His closest associates noted that people from different backgrounds or cultures were naturally drawn to him.
When Mr. Pierce read my email all those years ago, he wasn't just reading the random request of a junior manager. He was reading my deep concerns and feelings. The problem was important to me, so it was important to him.
Mr. Pierce knew empathy. My pain in his heart.
Employer or employee, empathy makes us more flexible and compassionate. It makes us easier to work with, and in the eyes of others, it makes us more human.
So the next time you realize that the relationship you have with a colleague is not what you want, take the time to show some empathy.
It might be just what the person needs.
One day, it'll be what you need, too.
Rujukan:
Artikel 3
5 Big-Business Growth Strategies Small Business Can Use
Eventually you want your small business to grow into a big business, right? If that's true, then learn which big-business growth strategies might work for you.Here are five growth strategies that small businesses should consider. Not every strategy will be right for your situation, but some of these might offer an opportunity for your business.
1. Market segmentation
“Market segmentation” simply means picking a sub-set of the entire marketplace that you can organize your sales efforts around. Out of all the people in the world, who will you try to sell to?
Most big businesses are good at carving out their corner of the market. Then they do whatever they can to own that space.
Red Bull gets its energy drinks in front of a young, adventurous crowd: its segment of the market. Have you wondered why Red Bull owns a Formula One racing team? That’s why.
Pepsi was losing its battle with Coca-Cola to become the heavyweight cola company. Instead of trying to beat Coke at its own game, Pepsi focused on a young, fun-loving demographic. Many Pepsi commercials show younger music stars, celebrities or other young status symbols.
In other words, Pepsi stopped targeting the over-30 crowd and segmented its market. Coke is still the top dog, but thanks partially to market segmentation, Pepsi has built a very successful brand as well.
Most small business owners would be happy with building the next Pepsi, but many are afraid to eliminate part of a potential market. It can seem scary, but you need to focus on your core customer if you want a clear path to growth.
Segmenting your market comes down to making choices. Who will you serve? Who will you avoid? And which segment can you focus on to improve profitability?
2. Leveraging partnerships
Some small business owners love to complain about how they can't compete with the vendor relationships that the big guys enjoy. It’s true you can't "pay to play" like the Fortune 500s, but you can leverage partnerships in a savvy way.
For example, let's say your small business makes tennis balls and you have a technology that makes the balls bounce better and last longer. You have a great product, but you don't have a manufacturing facility, a distribution channel or any of the other parts of the tennis-ball supply chain. All you have are great tennis balls.
You may not be able to compete with the big industry players like Wilson, Penn or Prince for sponsorships or tournament partnerships, but you could partner with a tennis-ball factory and a distribution company. In fact, you could partner with them without having to pay a cent for your own factory or distribution. Just pay your partners a portion of the profit every time you sell a tennis ball.
The result? You negotiate for mainstream production and distribution without paying the huge upfront cost of building a plant or hiring a shipping company. Now you can focus on selling tennis balls instead of worrying about making them.
Big businesses can pay for partnerships up front. Small businesses have to negotiate for partnerships that pay per sale.
3. Use checklists
Big businesses have massive facilities, complex supply chains and large equipment. Managing the day-to-day operations in these environments is too complex for one person. There are too many variables to track.
Guess what? Small businesses are the same way. Small business owners have to wear many hats. If you don't hold yourself accountable and remind yourself to do something that "brings home the bacon," then it's easy to get caught up doing things that aren't essential. In the rush of a normal day, it's also easy to forget to do a critical task.
Take a page from big business and develop process lists or checklists for specific tasks and jobs. Give yourself a guide to success and a reminder to do the essentials each day.
4. Acquisitions
Perhaps the primary way that most big businesses grow is through acquisitions. Before you think I'm off my rocker by suggesting this move for small businesses, let me explain.
First, acquisitions are tough. You can easily break the bank with one bad purchase. That said, acquisitions can be a massive source of profit and a means to growth if you make a few key moves.
You know what's a good buy in your industry. Follow tip No. 3 and keep to a specific list of characteristics that you're looking for. Don't let emotion or ego play a role in a major purchase. Stick to the checklist.
Secondly, do you have the budget to buy up everyone in the industry? Probably not. I'm not suggesting that you buy something you can't afford. But you can afford some businesses, especially those that you can improve. Don't dismiss acquisitions just because you're small.
5. Become a leader in the industry
Big businesses often make their name by leading an industry. They make moves when other businesses sit by the wayside.
I was recently talking with the employees of a large distribution company that wants to do business in China. There's just one problem: The distribution company ships products for other companies and those businesses don't trust the distribution channels in China yet. As a result, the distribution company isn't selling in that region.
If there are no products to ship to an area, the company doesn't set up distribution in that area. But if there’s no reliable distribution network, nobody ships products. It becomes a chicken or egg problem where neither side wants to move first.
So what does this company do? They say, "We know you don't like the distribution there, so we're going to fix it. Then, you can give us all of your business in China."
Is it a bold move? Yes.
Is it an expensive move? Yes.
Is anyone else currently doing it? No.
Does that mean that there is a huge opportunity for growth? Yes.
What's the lesson for small businesses? Don't be afraid to solve the hard problems that everyone else avoids. There is a lot of money to be made when you're the first person to fix something.
Rujukan:
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