The Secret to Sustainable Business Growth
One fundamental question plagues countless small businesses: How to grow and keep the business going. Maybe you're not gaining enough customer traction, or maybe you've hit a wall and sales are flat. In any case, the plan just doesn't seem to be working, at least not as you hoped it would.
I'm willing to bet that you've tried, are trying, or are willing to try all sorts of incremental strategies to solve the problem. But more often than not, they're not going to work.
Why not? Well, you're probably not a business expert. Don't feel too badly about that; few business owners are. They start companies because the opportunity arises, they're subject matter experts, or they're passionate about doing something. In any case, they probably don't know a whole lot about what it takes to achieve sustainable growth.
The way to do that isn't rocket science, but the funny thing is this: Every time I explain it to a CEO or business owner, they nod their heads like it's obvious, but for some reason, they almost never seem to think it applies to them. They think their product or idea is different. They think they're a special case.
Well, I'm here to tell you and them: it isn't and they're not.
Just look at the next big thing: wearable computing like Google Glass and Apple's rumored iWatch. Nobody knows if either will actually be successful. Nobody ever knows. In fact, years ago, Google's founders shopped the concept of a search company around endlessly to everyone who would listen. Everyone passed, except for one.
It's hard to come up with a product or concept that's got a snowball's chance in hell of making it, let alone achieving sustainable growth over the long haul. And you know what? It's even harder, if not downright impossible, if you ignore the basic rule of what it takes for a business to be successful, as most companies do.
Here's the rule: Customer traction and sustainable growth occurs at the intersection of three things:
A big problem. Something that a significant group of customers really need or want but doesn't exist, at least not in a useable or affordable form.
A unique solution. An affordable product or service that solves the problem significantly better than competitive solutions and can be cost-effectively made and sold.
A competitive advantage. A competitive advantage that can be defended and sustained over the long haul. Here are nine competitive strategies that work, but there are more.
Granted, customers don't always know what they need or want until you show it to them. That's absolutely true. Lots of experts thought Apple shouldn't get into the smartphone business. Good thing Steve Jobs didn't listen. Still, that's not the point.
The point is, once you've come up with your solution and it's not working, don't spend years trying to tweak it. Instead consider that maybe, just maybe, you missed the mark and incremental modifications aren't going to cut it. At least look at the three things and test your assumptions and execution. I guarantee you missed something important.
Of course, there are lots of other factors that matter, but you're not going to achieve long-term growth without hitting the intersection of those three things. Not only that, but you should periodically revisit the equation because we live in a fast-paced world. Things change. Markets change. Competitors change. Customers change. Technology changes.
How often to revisit your strategy depends on a number of factors, most notably how hot and volatile your market is. Start out annually and see if that works. Trial and error usually works fine. But stay on top of it because one thing's for sure: If you wait until sales have flatlined, you waited too long.
One more thing. Don't even try coming up with an excuse for why your company, idea, or product is different. I've heard it all before and from some very, very smart founders, CEOs and yes, even VCs. I admit, there are exceptions, but they're few and far between. It's far more likely that you're just drinking too much of your own Kool-Aid.