I Like the Boring Business

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When it comes to business building, I like boring. I like creating outputs from inputs. I like throughput. Drama, inconsistencies, high stress and heroics are fantastic for movie plots. But they don’t contribute positively to profit and loss in a business. Boring helps cash flow. Cash flow makes customers, vendors, employees, and owners happy.

I am not sure why a certain level of craziness persists for so many operations. Here are my guesses:

A business owner thinks a bit of chaos is normal.

Employees have completely different incentives. Chaos and disorder might reward them with a sense of relevance (and dependency).

Growing so fast with headcount and lacking a solid culture has newcomers confused.

The business owner only cares about money and doesn’t realize the importance of strategy to get money long-term.

There’s not enough drama going on in people’s personal lives.

When I see a boring business that has cash flow working like a machine, someone prioritized making the business work and keeping first things first. They simplified as they grew. New systems, processes and people create complexity. And they were intentional to inject strategies, culture and execution to overcome the complexity. It was more than a money grab.

With the ridiculous amount of competition out there, the last thing you need is chaos and drama when it comes to operations and selling. Making customers happy requires alignment internally on all fronts. Perhaps certain niches can hide for a bit. But, someone is going to eat your lunch that comes along and builds that boring business that reliably executes day in and day out.

Are you operating on systems or charisma?

Do you have consistency or failure points that keep showing up?

Are customers leaving you regularly?

Are employees leaving you disgruntled?

Do you think chaos is normal?

The marketplace is moving so fast and commoditizing every sector. Focus on building the boring business so you can be agile enough to react. It’s hard enough out there.

Overcoming The Valley of Death in Growing Businesses

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From the book, Scaling Up, and their commentary on the challenges of business growth.

The idea of growing a business is romantic. That spirit of entrepreneurship, leadership and scaling have a wonderful image of adventure and nobility. In the trenches, when a firm decides they want to grow, it is messy. It is hard work day in and day out to get the strategy clear and the people and systems moving in the same direction.

That is why the graph above on the valley of death growing firms experience is so vivid and real.

4% of firms reach $1M in annual revenue. Then it only gets harder to scale from there.

Essentially, the hardship comes from complexity. Growing revenue often requires growing teams. Teams of people need to collaborate. This growth may be linear as far as headcount goes, however, the complexity grows disproportionately in an exponential fashion.

One strategy to keep complexity lower is to use technology and systems rather than headcount. Information systems are ridiculously powerful and cheap today. And for growing businesses, they create extreme leverage. You can create information flow and access to make decisions and get things done in an unprecedented way.

Another strategy to grow is to implement strong leadership and use management approaches to foster alignment around clearly defined goals that are important to your company. This takes time. People take a lot of nurturing, repetition and trust, thus the HR systems have to be built, reinforced and robust to create the culture for growing a business past the valley of death.

The pain comes when trying to grow a business to support or create demand and the systems or leadership do not keep pace. Complexity inevitably grows and there needs to be a corresponding counterbalance of simplifying the business. Otherwise, the valley of death at each stage can crush the business. The weight of success becomes too heavy.

When you think about your business, you are never safe. Every comfortable niche is threatened today by technology and competition, which relentlessly pushes you towards commoditization. If you are a commodity, you lose relevance and profitability. Someone is, effectively, eating your lunch.

If you move from your comfortable, or deteriorating, position towards growth, you face the valley of death as you grow headcount. The task of simplifying as you take on exponential complexity becomes critical to manage as you climb.

It’s a tough world out there. But the game of business growth, while fraught with challenges, can be attained when you know where the pain is coming from. Your leadership and systems become your tools for increasing your rewards.

Are you in a valley of death?

Indiscriminate Business

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The illusion we have today in the marketplace is the buffet trap. We see everything that is available to us. This includes apps, freemium software, business ideas, low-cost labor and new growth hacking strategies.

It’s all available and cheaper and more accessible than ever. But if we gorge with indiscriminate adoption, we underestimate the mess which comes from having too much on our plates.

Think about the costs which you will eventually have to deal with by approaching business with abandon and indiscriminate selection:

  • Management. Every new shiny platform is something to login to and manage. Poorly used technology creates drag on your productivity and psyche.
  • Exiting. When you want to undo the work, you have to figure out how to get your team to pivot, move data and even stop working with a service provider. These all take cycles. You have to deal with the inertia.
  • Mediocrity. Trying to manage too many fronts is far less efficient than doing a few things that matter well. The opportunity cost is hard to measure, but it’s real.
  • Disappointment. If you kill a project that has an audience or users that depend on your service, you damage your credibility. You created dependency and now have let people down. Sure, you didn’t want to limp along, but what about those that got used to your system?

We don’t feel like there’s a cost because it’s easy to start something. I do think it’s important to constantly be testing and examining new ways of doing things. That’s the real-time R&D we can all drive in the midst of our speed economy. However, when we pick things to commit to and miss the cost of discontinuing something, you expend money, time, attention and credibility that could have been avoided with a little thought on how things might play out.

How can you be more discriminate in choosing tools and projects to take on?

Everything is an Experiment

 

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Here’s the simple strategy for keeping you from getting washed away in the tides of innovation all around you:

  1. Observe what’s happening around you in your world and see what people are buying.
  2. Come up with 3 ideas that get people to buy.
  3. Build a solution and sell it to one customer.
  4. Observe their reactions carefully.
  5. Iterate and tweak the customer experience with your offering.
  6. Keep experimenting with new ideas and repeat.

If you are a person that needs the sure thing, go into working for the government or accounting. The marketplace is not the place for you.

With the ease of creating what we want, connecting with the world and trying out our ideas, your ideas will obsolesce at a rapid rate.

But, it’s an exciting and low risk time for entrepreneurs. The tools are there. We just need to see your ideas play out and you have to be committed to the process of idea generation and experimentation.

Some of those ideas will materialize into enterprise plays and exit strategies. Very few will, however.

Most of the ideas you experiment with may materialize into microbusinesses that cash flow and build an audience. From there, you can segue your offering by experimenting further and watching your tribe carefully to meet more desires.

The strategy is not hard to implement. Having the vision and focus to see your ideas through is the hard part. That’s the catch with innovation and uncertainty. While everyone else is waiting for something to happen, you can get the lion’s share reward by making something happen. Then invite those along that are waiting to be part of it.

What idea can you experiment with today? How can you put forth a low risk approach and see what people do with your idea?

Growth Hacking Approach to Avoid Stupid Selling

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Manners matter. We know that interrupting people face-to-face is rude and can be quite embarrassing. Our social norms make it too risky to attempt to force our agendas and wills upon people we encounter in person.

However, with distance and virtualization, there are still the unimaginative souls who persist in trying to violate basic manners. Playing a numbers game, trying old school approaches such as cold calling or other forms of spam gets knee-jerk blocking from recipients. As buyers, we have the power to block out those who invade our attention space pretty easily.

Selling without imagination is a waste of everyone’s time. Instead of trying to force your will on others, how about working on your personal sales process first? Think about how to earn someone’s attention.

Earning someone’s respect, attention and business is hard work. You have to think long and hard about how you are perceived. Then think about the touches that make sense and who will pay attention. Each step has its own intrinsic ratchet down ratio.

Testing what you have in your head and how people actually react to your overtures and gestures takes quite a bit of vigilance.

Ultimately, you can shape a sales funnel that makes sense for those you who can say, “Yes.” You can attract the right people, start conversations, and keep attention towards a path to doing business together.

You have to do this while competing with the entire world. The great thing is that if you are creative and persistent, you have the opportunity to have your own personal flowing pipeline of opportunities and deals. You can differentiate and have an asset by designing and staying consistent with your custom approach to selling and making connections with those that you can bring value to in this noisy world.

Yes, it’s strategy. It takes time. But it’s much less wasteful and more efficient to do business by figuring out what scales.

How can you design and test a better, more human approach to connecting?