Last week we had a special guest at the monthly meeting of the Inc Business Owners Council of San Francisco & Silicon Valley Chapter. This is a new chapter, inaugurated in March of this year, and we have had some phenomenal guest speakers and participation. While Wall Street has the oracle Warren Buffett, entrepreneurs and Inc. Magazine have Norm Brodsky, the renowned entrepreneur with multiple start-up successes under his belt. He and his wife Elaine visited the San Francisco meeting where Norm was the featured presenter in conversation with the Council’s founder, Lewis Schiff.
Norm shared numerous bites of information about how he’s started more than six successful businesses. He is one of a very small handful of entrepreneurs to not only make the Inc 500 list of “Fastest Growing Companies” more than once, but he’s also achieved that success with more than one company. Norm’s talk was focused on the three personal criteria he applies when deciding to enter into or invest in a business. He highly encourages everyone to examine their own personal criteria for entering a business.
Norm’s three criteria are:
- Must be an Established type of Business. “At least 100 years old” says Norm. By that he means that the product and/or the industry are very established and people know what you’re selling. For example, Coca Cola has been around for more than a 100 years. They sell beverages and everyone knows what a beverage is. You may have a new beverage product but the industry is well established and you don’t have to educate consumers as to what a beverage is.
- The Industry is Antiquated. The business standards exist but could be updated with better service and particularly with technology. For example, the delivery truck business is well established, however UPS has found ways of improving service -- making it faster, expanding it globally and using technology to track packages.
- Finding a Niche within the Business Category. While many or most businesses look alike there is probably some unique niche that you can fill that will set your business apart from the rest inventing a new twist or opportunity that nobody saw before. Something you can do better than the competition.
While I sat next to Norm and listened, I found myself assessing my own personal criteria. I had to admit that I hadn’t really paid much attention to this before. I probably had an intuitive sense of why I was in business but I hadn’t developed as clear a business rationale as Norm was talking about. I did an immediate introspective mental review and realized my company’s start up paralleled Norm’s criteria. I am in the medical business. We outsource x-ray equipment and x-ray techs to surgery centers. Obviously medicine has been around well over 100 years. In fact x-rays were invented in 1895. Yes, we are in an established industry. Check the box for Criteria #1.
Next is my business sector an “antique”? Well, in my mind, there has always been one point of difference that remains unique in what we do, we provide real-time x-ray imaging in the operating room. In fact, increasingly more procedures are being done each year, faster and more efficiently, and many procedures now include real-time imaging as a standard procedure. So while there are many new technological advancements and procedures being introduced constantly, it really comes down to the good ole fashioned x-ray that the physician still relies upon. It seems the newer the technology, the more the basics stay the same. While ever-changing technology offers better equipment, enhanced imaging and less radiation exposure, an x-ray is still an x-ray, and it’s has been around for many decades. We’ve just found a way to do it better! Check the box for Criteria #2.
Finally, does my business occupy a special “niche”? The answer is definitely “yes!” We have invented a way to create a high level of uninterrupted service to physicians, and do it in an extremely cost effective manner. Check the box for Criteria #3.
I felt reassured that my business was founded on sound criteria. However, I quickly realized that, while Norm advocates that everybody apply their own personal criteria to the task, it’s obvious that Norm’s three criteria were standard across the board and across any industry. He was basically saying that while inventing the next Facebook or Google would be a wonderful achievement, it’s not very likely. It’s more important to remember that there are thousands of business’s that prosper every day that aren’t in the limelight. And that’s okay. You don’t have to reinvent the wheel. Take an established business and just find a way to do it better, your way. That’s a great recipe for success.