Take the Money
TL;DR: If you want to build a healthy business, concentrate all your attention on paying customers.
What kind of company do you want to run? Serious question. Are you doing it for thrills? Some do, and they have a chance at building something monumental (and having some exciting stories to tell). Are you in it for your ego? Many are, and these people look important on the covers of magazines. Are you building something to last? Fewer do this. It’s not flashy or glamorous—but it can be a more fruitful path (for you and those around you).
All the stuff that looks like business
The funny part about business (real business I mean) is that it looks almost nothing like “business.” “Business” involves tailored suits, downtown offices, calculated negotiations, and game-changing deals. It’s what happens at Axe Capital. Real business is more about trying approaches, fixing them, and repeating the process. It’s rarely clear-cut, and often feels bewildering. It also involves dealing with minutiae (like cleaning the office and reconciling accounts). Such things often happen long after your friends have gone home for the day.
I know nothing about “business”, but I can talk for hours about business. I suspect most business owners are in a similar position. They feel like imposters, because what they do looks nothing like what’s shown on TV. Yet, they find customers, sell a product/service, and pay themselves and their staff. This doesn’t make for great entertainment, but it keeps people fed.
If you’re a new founder, “business” and business look similar—but they’re totally not. You must separate the two, and you need to do so fast. Failing to do so might kill your company, before it’s even on its feet.
You’ll spot the surface-level bullshit. These are networking events, Chamber of Commerce luncheons, and industry conferences. Each of these is a business in itself (predicated on selling the idea of “business”). Unfortunately, they’ll do little-to-nothing for your business.
Meetings seem like business, but are worthless if there’s no set agenda. Many other matters are relevant, but overvalued. A memorable logo is useful, but won’t drive sales. A funky workspace boosts morale, but won’t cover payroll. A Vision and Values document can center your actions, but won’t cover the utility bill. That said, these matters often take priority as they’re non-threatening, and easy to work on.
“There is no skill called ‘business.’ Avoid business magazines and business classes.”
Cashflow is your lifeblood
While a logo, space, and vision document are all relevant, they’re non-essential. Many successful startups began without a logo, or with a bad one. Countless companies worked out of a basement or attic (ours does). Many companies don’t even have offices. Instead they allow their staff to work in a remote/distributed fashion. Meanwhile, Vision and Values documents come into play later. (E.g. when the founders have established a clearer vision, and had their values tested.)
While these items can move the needle, they are not your greatest lever. Nope. The only two things you need in business are demand and the ability to fulfill that demand. Most would fare better by identifying the first—and then finding some way to develop the second. (This is rare, though. Most companies start with what the founders can do, instead of what the market is begging for.)
All of this comes down to money. That’s right… Moola. Bacon. Dough. Green. Scratch. Benjamins. Whatever you call it, you need it. Without money, you’re done. You might consider yourself above it. Or, you might claim to have a higher purpose. That’s fine, and it’s your decision to make. Do remember, though, that no staff member will accept your aspirations, or good intentions, in lieu of his/her salary.
I don’t mean to imply that money should be your sole reason for doing business. Rather, I consider it fuel. Without it, you can’t go far. This isn’t an opinion, nor do you have to like it. It’s an immutable law. Only fools will attempt to challenge it.1
Know your customer
Pretending that money doesn’t matter is silly. That said, thinking about money will only get you so far. Like I noted, it’s just gas in the tank. It might be better to ask: “How do I get that gas in my tank?” The answer is obvious: you service your customers.2
I’d like to re-imagine Ballmer’s frantic chant as “CUSTOMERS! CUSTOMERS! CUSTOMERS!” Everyone has a customer. If you sell an app, your users are your customers. (Duh.) If you direct a not-for-profit, your funders are your customers. If you’re an employee, your boss is your customer. If you are a politician, your voters are your customers. And, if you operate a social network, your advertisers are your customers.
If you run a design studio, your clients are your customer. Again, this should be obvious. Yet, it’s easy to lose sight of your customers. This is why design studios often seek awards, and the respect of peers: they forget who their customer is.
Everyone claims to offer good customer service. Most of us realize such claims are aspirational, and far from accurate. I used to be one of those people. I saw myself as the kind of person who offered good service—but did little to define what good service was. I did even less to measure it. I was so convinced that our studio offered good service, that I got distracted by things that didn’t matter. In turn, I lost some clients, who felt underserved—and they were.
“The single most important thing is to make people happy. If you are making people happy, as a side effect, they will be happy to open up their wallets and pay you.”
You can only focus on one thing
As a business owner, many tasks demand your attention. You don’t address these effortlessly. They need investigation, decision-making, and action. Quite often, they don’t work out as as you’d like, and demand even more of your time. A morning task of choosing a staff benefits plan turns into a week’s work. This leaves you feeling like you’re accomplishing nothing.
Sure, benefits plans matter. If you’re out of cash, though, you can’t pay for that benefits plan. Similarly, you can have all the press and awards in the world. But, if your customers leave you, those accolades will amount to nothing.
Maybe let some things slide. In the future, you can upgrade your I.T. infrastructure, refine sales methods, or update the website. Or, you can pick away at those tasks, as time allows. The one thing you can never neglect, though, are your customers. Without them, the rest can’t happen.
Posts like these are easy to read, and easy to forget. Action is harder, and the only way to benefit from the time you put into reading this. So, I have a homework assignment for you.
Clear your desk, and close the open windows on your computer’s desktop. Fire up a text editor, and type out the names of each of your most valuable clients. Then, pick up the phone and call them, one by one. Ask how they’re doing, what problems are hounding them, and how you could service them better.
You might feel intimidated, or consider this tedious. Stick to it, anyway. Some will tell you they’re happy, and appreciate the call. A few might buy something new from you. Others will tell you that they’re unhappy with your company. This affords you an opportunity to fix these problems. It also helps you identify holes in your product/service.
- You might argue that open source projects challenge this law. Fair enough, but people who work on open source projects still need to get paid—but they do so elsewhere.
- A small number of folks read notes like this, and then remind me that what I say is, “common sense”. They’re right. However, I find that we could all use a bit more common sense.
Want more? Check out the full list of articles, learn about this blog, or grab a book. Here’s what I’m doing now, and what I don’t do. I hold free weekly office hours. Alternatively, you can hire me for more involved engagements, via smashLAB.