Each month in this column I ask a different question to you, the ExitEvent Entrepreneur. Thought provoking questions that are meant to get you to sit back and think. Each month I offer insight into the question, along with common mistakes made by (us) entrepreneurs, and a key take-away for you to think more about. My goal – to increase your self-awareness as an entrepreneur and a leader.
Insight: When we decide to become an entrepreneur, we are driven to come up with a differentiated solution. We see an opportunity in the marketplace where a gap currently exists or we decide that we have a better solution than is being provided by our soon to be competitors.
We open up, sell our first widget, sell some more and we are off to the races. When we hit $100,000 in sales, we have proven that our product/service can actually sell to multiple customers. When we hit $1 million in sales, we have proven the market really wants/needs our widgets. When we go over $10 million in sales, we have transitioned from being “under the radar”, and our widgets become a much higher priority target of our competitors’ sales forces and the new startups in the market. We become the company to beat!
Common Mistake made: Customers. They are the ones who buy our widgets. Employees. They are the people who make our widgets. Leadership Team. They are the people who are building the teams and processes to grow our company to make more widgets.
Once we have developed a widget that sells in the marketplace, and we have created a company with employees and a leadership team to help us grow the business, we tend to become internally focused. We focus on questions such as: How do we get better at making widgets? How do we keep our employees motivated to stay with the company so we can continue to grow? How do we incentivize our leaders so we can grow even faster? How do we organize ourselves better so we not only sell well but have operational excellence as well?
So what’s the mistake?
We forgot what got us here. Developing a differentiated solution, filing the gap or creating new solutions. We forget who our # 1 is…the customer. We focus on people and processes at the expense of the customer.
Key Take-away: I was a founding partner of two fast-growth companies that are now 27 and 15 years old. We have never lacked for people and process challenges over those combined 42 years and will always be dealing with more in the future.
There will always be internal problems to fix, always. The more you grow, the more your infrastructure will be challenged to keep up, the more your processes will stop working efficiently, and the more your organizational structure will change. This will happen, and you will have to deal with it. But not at the expense of the customer.
I now work as a writer, coach and consultant to leaders spread throughout the world. I have to share a story about one of my clients. It is a leading product company in its field with over $20 million in annual sales and the reputation as being highly innovative with its customers. So when I asked the leaders how many times they talk to their customers—how many times they survey them, what do they learn from them—the answer I got was not what I was expecting. They didn’t do any of the above. They had gone internal, completely. Thankfully, they listened to their coach and have now gone external too with great results.
Don’t lose sight of the customer. In my book The Second Decision, I cite the top reasons for failure or underperformance in businesses and I will highlight one of them: The math just doesn’t work – there is not enough demand for your product or service at a price that will produce a profit. Focus on your customers, stay relevant, lead your industry…stay external too, always.