The Basic Entrepreneurship Formula for the Rest of Us…
Tonight, as per my normal nighttime routine, I was perusing through my various social network feeds. It seems as though LinkedIn always provides me the most insightful posts because of the types of things it brings front and center. While on LinkedIn — I’m not limited to reading just the random musings that my connections themselves have written, I also get to see posts that they’ve liked that are popular in work circles and communities that I’m a part of and I can do so without having to ever leave my main feed.
Everything I read on my LinkedIn feed always seems relevant and poignant to whatever is going on in my head; So, kudos to the engineers and product managers over at LinkedIn that produced that magic.
What I read tonight was no exception. It was from a post by an individual named Jesse Randall. I don’t know Jesse from Adam — but that doesn’t change the fact that what he wrote instantly inspired me to write what you’re reading right now.
Here is a brief clip from his post…
If you want to read the whole post I suggest you go to his LinkedIn page. The post is short and well worth the two minutes it will take for you to pull it up and read it.
What struck me about this was the simplicity of the formula. Granted it follows things I’ve read and heard before in other places throughout my life… e.g. Find a common problem, provide a solution, etc… but don’t let that discount the value found here. Let’s break this down.
Instead of saying “offer a service to solve a problem” he used the word “pain.” Whether or not this was his intention and whether or not this seems like an important distinction to you — to myself — right away, this was significant. To me the word “problem” has always seemed large and obtuse and therefore unconquerable. It could mean anything depending on your frame of reference. It’s hard to grasp and know how to tackle; whereas the word “pain” is easy to relate to and quickly reference in our mind’s eye. We all have pains that have hindered and annoyed us in our lives and even though these pains differ from person to person — the emotions inflicted are the same. For myself, the word “pain” almost brings a sense of calm to the challenge of identifying what to work on. Instead of solving some huge, indistinct “problem”, you’re relieving someone’s pain. This is an important difference because it puts you, the entrepreneur, on the ground. It forces you to look for something small that you can fully comprehend and approach as opposed to something gnarly and entirely out of scope for a new venture.
The second line — “Charge a lot for it” — again, to you this may have been simple and straight forward — obvious even. For me though — this statement was bold. To properly understand the impact of this statement — you have to think about what common sense dictates. Common sense says that if you’re going to offer a service you have to offer it at a price that is in line with the market you’re catering to. If Bob only has $5 bucks to pay for your service — well then you probably want to provide that service for $5 bucks or less, right? Also, if there are other people providing this same service to Bob, then you have to consider offering it at a price that is better than theirs or Bob will go with them. This line of thinking is total common sense… but it’s totally wrong if you want to be truly successful.
The argument for this “safe approach” of being competitive in your business model is that winning a customer worth some money is better than not having a customer at all. In order to make our service/product minimally viable we set our prices competitively so that we know will garner interest from our intended demographic. However, I would pose this rhetorical question to you, “What does this really do to the service you’re offering?” The answer — It says “I’m here too.” It says, “I’m the same as these other businesses you’re looking at or maybe slightly ‘better’ because I’m more affordable.” This instantly devalues whatever service you’re offering to an “on par” level. Worse yet, it makes you little-to-no profit which would in turn allow you to bolster your service and further set it apart as something unique to the market. Thus, your own devaluation of your service becomes self-fulfilling prophecy. You stagnate because you become one of many in an over-saturated service market… then you lose interest because 1 — you’re not making enough money to justify the extra work you’re putting in and 2 — the clients/customers you’re getting aren’t exciting you — because they didn’t value picking you — they just wanted what was most affordable… so the work becomes tedious because you’re always getting clients with the same motivation.
You get the point. Let’s move on…
“Get intimate with their needs.” This is probably the phrase that is most in line with what I’ve already heard in the past. It’s about knowing your customer. Let’s be honest — It’s about not being scared to get up close and personal in order to find out what could specifically interest them in giving you more of their money. One difference to note here is that this step comes after the “charge a lot for it.” This suggests that rather then cuddling up next to everyone — we need to get close to the customers that are already looking for the best; The customers that are looking for the premium service experience. It doesn’t make sense to split your time 50 different ways for 50 different customer types. It DOES make sense to focus on two or three customer types to make their experience even better.
“Develop software to take you out of the process. Sell the software back to them.” This last part should be broken down a bit and simplified further. After all, not everyone reading this is getting into a service/product business that could be translated into “software” per se. However, the intent behind the phrase is larger than that. Instead of the word “software” lets use the word “automation.” We develop a method of automation for our service/product and sell the customer on the idea that the automated method is just as good if not better than what we were originally providing them with. Initially you may think, “sure that makes sense, automate your cash flow.” While that’s very true… there is another reason that this should be a step in your entrepreneurial ventures.
If you are a true entrepreneur— then you’re going to get bored with whatever success you achieve. No matter who you are or what you’re doing if you have that drive to create, then settling on doing one thing for the rest of your life isn’t your true motivation. You may think to yourself that you just want that one success; That one breakthrough product or service innovation and you’ll feel complete. However, if that’s the case, I would challenge you on the idea that you’re an “entrepreneur.” If you settle on one success in business, then I submit that you’re a “business person.” Perhaps a damn good business person, but you’re not an entrepreneur in the true sense of the word. An entrepreneur succeeds and then surveys as they move on to the next big thing. You owe it to yourself to go out there and be successful… you owe it to yourself and the world to continually innovate.
