What Matters In Business For Successful Start-Ups?

by Richard GourlayBusiness mission, Dumfries and Galloway, Innovation, opportunity, start-up advice, Strategy, VisionPosted on Comments are Disabled

What makes a successful company in a market? Is probably the single biggest question a new start-up team must be able to answer. What factors make a successful business has always been a difficult question to answer. So what matters In business for successful start-ups?

The answer has always depended upon who is asking the question!

Unicorn Start-Ups

Dreamers look for unicorns with unique protectable offerings, such as Intellectual Protectable rights, a Unique Selling Proposition (USP).  These dreamers will invest in big step start-ups, market disrupters which will change the markets they wish to operate within. Step changing start-ups such as unicorns (are rare hence the name unicorn), but can reshape markets towards these start-ups. Think about Apple and Amazon and what they have done to the markets they operate within. Today these two are the largest (by value) companies in the world today.  

Unicorns need a unique angle, a technical platform angle, a defendable IP, or a unique (and defendable) operating platform. Even small start-ups can be unicorns if they can identify and control a unique position. Inside Apple’s early technologies was the British made ARM microchip, which propelled it into be a unicorn.  But unicorns are rare, and their window to get established is getting shorter and shorter as competitor awareness and responsiveness is constantly quickening.


Funding Start-Ups 

Traditional funders, such as banks want high returns with low risks, and owners who will take all the risk directly, or being prepared to 100% underwrite the banks so called investment.  Banks do not like, or take risks, which is uncertainty.  Which is why they avoid taking them, unsecured risks are not what banks generally do. So they may support a start-up with a loan based upon a sensible fully costed and robust business plan. 

Banks, who are most start-ups first point of call, often provide a poor place for people to start a conversation with about a business start-up. Start-ups looking for financial support, ideas and how to get a business start-up off the ground often left disappointed by the support which they receive.   

The risk reduction by definition reduces opportunity; in essence if you remove all the risk you also remove all the opportunity a start-up can achieve.  Start-ups often overstate their growth, understate competitor defensive activity and the challenges in getting established. Often start-ups can find better funding through self-funding options, alongside friends and family as stage one seed funding.  It is always best to start small, prove your concept and then go out to market for stage 2 funding with a proven pilot under your belt.  

Start-Up Entrepreneurs Solve Customers Problems

Entrepreneurs genuinely look at solving an emerging problem, the old adage is:-

“The secret of success is to find a need and fill it, to find a hurt and heal it, to find somebody with a problem and offer to help solve it.” – Robert H. Schuller

While the logical approach of bankers is to ride an existing market wave, true entrepreneurs look to create the wave. They are looking at a problem and identifying the ideal innovative solution for that problem’s resolution.

 

Researching Successful Businesses

So what makes a successful business model includes a whole variety of factors including the core idea, the experienced team, the market opportunity, market access, competition, scalability (the list goes on and on, depending upon who you are talking with) and what resonates with key stakeholders and target audiences.

Recently Bill Gross, CEO of Idealab decided to research this using his extensive range of business start-ups; 100 of his own, and matched by another 100, across a whole range of sectors.  His assessment started by analysing what makes successful businesses. He came across 5 key common factors and he cross-referenced those compared to businesses which have succeeded.

Bill Cross’s 5 keys for a successful business include:-

  1. The Idea: defined and coherent.
  2. The Team:  skills, experience, energy and how well connected.
  3. The Business Model:  comprehensive worked through covering the business need.
  4. The Funding – access to the right amount of money to achieve its core goals.
  5. The Timing – identifying the market timing to meet target audience needs.

The research results contradicted what many thought would be the results across the 200 companies he and his team analysed. This survey included global names such as Airbnb, Youtube and LinkedIn amongst the 200. His analysis showed that of all the factors which can affect success or otherwise of a business, success really came down to these few key ones. They key factors which are common across all markets, sectors and over time  are the defining characteristics for a successful business. But of all the factors one stood out throughout the survey.

Success in Business Start-Ups Relies Upon…

Timing is THE common factor in a successful business at 42%. It is the most common trait of successful company start-ups.

Team came in 2nd, with 32% and the Idea only came 3rd in importance with 28%.  The business model, upon which so many advisors focus their attention was 4th at 24% and the funding came in 5th at 14%.

Timing Is Everything for Start-Ups

The quality fo the idea is not as important as timing. Timing, the driving strategic factor can be identified initially through a thorough PESTEL analysis. Timing is the bottomline performance criteria in driving the success factor for a business.  PESTEL factors set the macro landscape a business operates and defines the timing of its launch. If the landscape is favourable then a business can succeed. I not, then even if everything else looks great then your chances are far lower, than if you get your timing right.

This shift from build and they will come, the old motto of every good idea, qualifies that statement by saying if the time is right then if you build it they will come.

What Matters in Business for Start-Up Success is therefore Timing

If you look at all  successful business over time, then it is always timing that matters. Knowing what to do when really matters for leaders to focus on. The world is full of ideas launched at the wrong time. But get your timing right and the world is your oyster.

From the launch of the internet and the creation of Apple, to the development of low cost airplanes to the launch of low cost holidays, timing is everything. 

The Importance of Research for Start-Up Leadership Teams is Vital

Leadership teams need to focus on answering the question their target customers ask, now. Timing is offering the solution the their customers will pay for today, not waiting for it or putting up with second best. If you can answer their needs when they need it, with what they need, then you are on the first rung to find success. Without good timing you are creating products and services no-one (or not enough people want). Timing is equally important for leadership teams to assess if your product / service can be accessed by the target audience.

Successful companies work with their markets to get their timing right in launching products and services that fit within a market. They can challenge existing customers perceptions but they must be the right product at the right time for the right customer if a business is to succeed.

See Bill Gross, CEO of Idealab Ted talk here:-

https://www.ted.com/talks/bill_gross_the_single_biggest_reason_why_startups_succeed

Like to know how Richard Gourlay can support your business to succeed, then contact Richard here or below.

values in business matter to customers and employees

Values matter in BUSINESS more than ever before as Ikea have just found out

by Richard GourlayBusiness culture, Business Identity, Business mission, Business Values, competitive advantage, Dumfries and Galloway, Strategy, VisionPosted on Comments are Disabled

In today’s information driven world, how you do business matters as much as the business you do, as Ikea the iconic Swedish furniture retailer, has just found out. Ikea’s green credentials have been dealt a massive blow in consumer’s minds. Ikea’s failure to support sustainability in its products leaves customers questioning its real values as a business. Heres, why values matter in BUSINESS more than ever before as Ikea have just found out to their cost!  Here’s why you cannot just talk about values, you must live them! 

 

Ikea only uses 16% sustainable wood! 

 

Ikea’s failure to achieve its own most modest target of 30% of its wood products to be from certified sustainable wood, will damage it its credibility heavily with its key audiences. The fact that it only hit 16%, has a massive blow on the values it professes as promoting sustainably sourced materials and to its environmental positioning.  Compare that with Homebase (78%) and B&Q (77%), which won the best green award 2010.

 

The excuse given in its defensive press statement is that it has sacrificed the values of sustainability for rapid growth and protecting its profitability (£2.3billion). But short term greed like this can cost dearly on both growth and profitability over the long term.

 

Ikea’s staff not telling the truth 

 

This corporate failure was made worse by staff telling customers in store that its products are from sustainable sources. When in fact they are from illegal logging in places such as Russia. This insatiable drive for growth, which so often undermines trusted names, may damage the Swedish brand’s position as the leader in the flat pack market significantly.  This expose means that Ikea will now undergo microscopic environmental and customer scrutiny.

 

Greenwash Marketing is NOT acceptable

 

Ikea’s soft “long term” aspirational statements on their website with links to the Rainforest Alliance are unlikely to be seen as enough in the modern world where green wash marketing such as this are quickly exposed and penalised. When the spotlight of the green world is turned on, it is difficult to hide in the shade.

 

The World Bank suddenly in the late 1980’s promoted its ‘green credentials’ by promoting itself as having employed ‘an environmentalist’, to offset its image of chopping down forests for cash crops.  This green wash story was quickly exposed when it was pointed out the World Bank employed some 5,000 economists, what difference would/could one environmentalist make?

 

Values matter in business by Richard Gourlay

 

Business Values must be transparent

 

 

The way you provide your product or service and to whom, says more about you than how much business you do. Being a big turnover company in a highly segmented world is no longer the determinator of success.  How you do your business now determines your current credibility and future success.  Credibility is as much about your values in becoming successful as about the success you have.  The question of size as measured by turnover raises questions about how you do business.

 

Real Business Values Recognise Real Carbon Footprints

 

Too often businesses have slick marketing messages, from slogans and statements, rather than understanding what impact they are making on the world in everything they do, their carbon footprint. As Carbon footprint becomes clearer so businesses must adapt to reducing it throughout their entire impact upon the planet and reflecting that in the values they actually demonstrate.

 

Your values as an organisation as demonstrated by everyone inside your organisation matter to both existing and potential customers in choosing to do business with you. People have choices and they can now exercise them more freely than ever before, and that means customers can access information instantly to make choices that are more informed. Ikea’s staff misinforming undercover Times reporters about their sustainable and certified sourced products at a number of shops are one symptom of Ikea’s rapid growth boardroom culture.

 

Vision Mission and Values in business Strategic Planning Workshop by Richard Gourlay

 

Values Must Live In The Moment 

 

Almost everything in life is in real time and instantly communicated to circles of influence and beyond. A restaurant having  bad night can have a poor reputation before the starter has even been cleared away as customers post live feed back to sites such as Qype or Trip Advisor . Therefore, before the waiter, maitre d’ or chef knows what’s happening the world outside already does by Twitter and Facebook and are cancelling their reservations in their droves.

 

Why clean lavatories matter?

 

The old adage that if you want to know how clean the restaurant kitchen is, inspect the lavatories. This is because they tell you how the restaurant values cleanliness, is a great example of modern customer awareness. Do you live your values or just post them on your website? Is the question customers want to know in establishing and experiencing trust with you and your brand.

 

You can spend as much as you like on your website, Google reviews and trip Advisor comments, but simple first impressions such as the state of lavatories matter more to customers.

 

Rail companies are learning fast

 

The recent story of the man on the train talking too loudly causing enraged customers to Tweet  complaints about his behaviour which was picked up by a duty manager hundreds of miles away who then contacted staff on the train to track down the loud caller and asked him to quieten down.

 

This story is very much testimony to the growing demands of customer expectations, immediate online response, not waiting for passing train staff to react. This story is part of the reputation shift that train companies are actively pursuing.

 

 

Values are in the detail

 

Values matter, they define the real differences between companies. How British Airways treats its customers through the values it embeds in its entire organisation is what makes it different to other premium airlines and distinguishes it from them, and from the bucket providers such as Ryanair.

 

However, as everyone de-layers in response to changing business models, cost and modernisation requirements, values can be lost in the rush to modernise and compete in new ways. BA’s changes to its premium dinner menu, introducing exotic main courses such as crocodile and ostrich sounded good but simultaneously cutting the After Eights, so there was not to go around 1st class passengers was a classic example of getting its values wrong in its customer’s eyes.

 

 

Values Must Involve Everyone in the organisation

 

If you value your customers then remember everyone needs to smile in their role, if you believe in providing excellent customer service then don’t cut your front of house staff numbers.

 

Too many companies’ ideas of communicating values are to place a statement on a website, brochure, at reception and on the induction training programme. How many companies look at the strategic advantage of values and embed it into people’s roles, asking staff to define their role by those values by redefining their role to live those values?  How many companies review those values as outcomes in winning and retaining customers?

 

Business Values as seen by Employees and Customers

 

Customers, potential and existing, are drowning in choice.  What makes you stand out to them is the values you own and can demonstrate as a business. Statements on walls and websites always sound good, (possibly, because they are written by marketing people who do not work there) but unless the company lives them, then they do more damage than good. Over promising and under delivering is a growing experience for everyone today.

 

Whether it is a London hotel, stating it’s exclusiveness, as evidenced by its 5 star, pretty pictures on the website of its presidential suite and over the top statements such as “sumptuous 5 star accommodation” the jaw dropping price tag. When you turn up and find a broom cupboard with not enough space to turn around in let alone swing a cat, and you are one of 500+ rooms filled with bus loads of tourist on a package holiday then company values are under pressure.

 

The same is equally true for staff. Why should people stay loyal to you if you don’t live those values and enshrine them in every one of your people. Do they live it or lip service it?

 

New company’s leadership must create and live their true values 

 

New companies have the unbridled opportunity to define their values from the start. By building them into their business model throughout the entire process from the beginning, providing value and clarity with every new role and new person, they can use their values to maximum leverage for attracting their chosen customers and staff.

 

So Googles’ “DO NO HARM” value won many plaudits, breaking down the concern about the is was then rightly questioned by their policy in China of being seen to be supporting censorship (try typing Tienanmen Square Massacre into Google in China it never happened!).  Now there is a good argument that rightly says any Google is better than no Google, but the contradiction against their stated values upset many Google Supporters elsewhere in the world.

 

Your values should come from within. What do you stand for? What does your company do? How should everyone do it? What does excellence look like? Some classic questions to understand the values you offer. I often ask people to think of an animal or car which best describes there organisation

 

Keeping Values Alive       

 

Established companies inherit values, often without realising they have them in place, “its how we do it around here” type phrases are often values hidden inside everyday activity. Keeping values alive is often hard in rapidly changing under-pressure environments. Changes in leadership, particularly when cross industry leadership is introduced or when new pressures are introduced from changing ownership for example often end up throwing out the hidden value of a brand in the race to achieve short-term results.

 

Everyone entering a company, particularly top executives, must understand the core heritage values any organisation has, how they are owned and expressed. The best way to achieve that is for new people to present those values back under peer group review and add to them with the changes they intend to introduce. New products / services need to incorporate core values and learn to demonstrate them in new ways as new channels of communication are opened up. Here is a simple checklist for business leaders to use to answer honestly and thoroughly about where you are with your business values.

 

Values Check List 

 

  1. Are your values visual to your team and customers? 
  2. Does everyone know your core values, have you checked?
  3. Can all your people translate them into their daily role?
  4. Do people see the company values in other people’s roles within the organisation?
  5. Do customers comment on those values in their dealings with your company in formal and informal feedback channels? 

 

If you can only answer confidently to points one and two then you are not living your values as a business. If you cannot hand on heart even answer those two, them it’s probably time to look at your values in a lot more detail.  Spend time to think through what you and your business stands for and get in touch if you need any assistance in creating values which matter to you.

 

Leadership Strategy

 

Learn more about strategy and leadership and how as a leader to create your strategy, with all the steps to build your own strategy, click here to buy the book now:-

 

Values matter in business more than ever before, red more in Strategy The Leader's Role by Richard Gourlay is a book about business strategy for leaders to grow and develop their strategic plan for their business.
Learn more about business values and cultural impact in Strategy: The Leader’s Role by Richard Gourlay .
Mentoring using teh GROW model to mentor directors

Do you have a vision or are you just a dreamer?

by Richard GourlayBusiness Identity, Innovation, sheffield, VisionPosted on Comments are Disabled
Vision statement by Brian Tracy

 

Do you have a vision or are you just a dreamer?

 

No matter how big or small your business is without a clear vision of where you are going owners and directors often fall into the classic trap of just managing from day-to-day.  Do you have a vision or are you just a dreamer? Is a simple question which I ask leaders, and for many it is just a work in progress, in their head. But every business needs great leadership, and for that they need to create a clear business vision, which will make and deliver long term leadership success.

 

Creating a vision of the Future

 

Leadership is about investing time to create a clear vision the future. Putting in the effort and resources to see into the future and imagine how things could be. This is as important for success as having real passion for the business today and the determination to create something new for the future.

 

These three personal qualities of leaders are vital for successful companies and a vision statement, sometimes called “a picture of your company in the future”, but it’s so much more than that.

 

Vision Statement

 

Your vision statement is your inspiration, the framework for all your strategic planning. A vision statement may apply to an entire company or to a single division within that company.

 

The vision statement answers the question, “Where do we want to go?” What you are doing when creating a vision statement is articulating your dreams and hopes for your business. It reminds you of what you are trying to build. A vision statement is for you and the other members of your company, not just for your customers or clients.

 

Visionary goals should be longer term and more challenging than strategic goals. Collins and Porras describe these lofty objectives as “Big, Hairy, Audacious Goals.” These goals should be challenging enough so that people nearly gasp when they learn of them and realize the effort that will be required to reach them.

Most visionary statements fall into one of the following four categories:

 

  1. Targeted – quantitative or qualitative goals such as Nike: “To bring inspiration and innovation to every athlete in the world” “If you have a body, you are an athlete.”
  2. Common enemy – focused on overtaking a specific firm, becoming the number one in that sector, such as Amazon: “Our vision is to be earth’s most customer centric company; to build a place where people can come to find and discover anything they might want to buy online.”
  3. Role model – to become like another in a different industry or market, the mirror role, Victoria Beckham (Posh Spice) “Right from the beginning, I said I wanted to be more famous than Persil Automatic”.
  4. Internal transformation – creating internal vision, GE set the goal of “Becoming number one or number two in every market it serves”

 

While visionary goals may require significant stretching to achieve, many visionary companies have succeeded in reaching them. Once such a goal is achieved, it needs to be replaced; otherwise, it is unlikely that the organization will continue to be successful. The second most dangerous place for a company is to have achieved its only goal, the most dangerous place is never to have had one.

 

Creating Your Business Vision

 

Simple steps to creating your vision, ask some simple questions:

 

  • What will our business look like in 3 to 5 years from now?
  • What new things do we intend to pursue and how?
  • What future customer needs do we want to satisfy?

 

Write the answers down and focus on developing them into a coherent, motivational and purposeful message which can connect with everyone.

 

Then Question Yourself To Answer:

 

  • Does our vision statement provide a powerful picture of what our business will look like in 3 to 5 years from now?
  • Is your vision statement a picture of your company’s future, which everyone can interpret into their role?
  • Does it clarify the business activities to pursue, the desired market position and capabilities you will need

 

If your statement answers these questions then you have a vision worth owning and sharing. A vision must be motivational to everyone inside an organisation.

 

DO you have a Vision?

 

The classic apocryphal story to demonstrate the effectiveness of great visions is about the time President Kennedy visited NASA. During one trip he came across a cleaner sweeping the warehouse floor, and asked him what his job at NASA was. The cleaner replied “My Job is to put a man on the moon, Sir.”

 

Now I don’t know if this story is true, but it’s inspiring. In a facility full of high-powered individuals and great minds, even the cleaner was completely on board with the strategy. While you may not be planning to put a person on the moon, we can learn a lot from the story. It may sound ridiculous, but every business needs to be a little like NASA.

 

A great VISION can create an unstoppable company

 

Every organisation needs to have a clear vision, owned by everyone inside and outside it. An owned and shared vision creates and sustains great morale and internal strength for companies, which can become a powerful and unstoppable force in any market no matter how competitive.

 

At Cowden we focus on ensuring companies can successfully compete in their chosen or desired market.

 

Like to learn more? Then get in touch with us at Cowden.

 

Or learn more about creating your vision and how to lead your organisation with a clear strategy, but my book: click this link or the book cover below 

 

Strategy The Leader's Role by Richard Gourlay available from Amazon click this link