What The Customer Really Wants

Passionate people prioritize their principles! That’s great – when it’s what the customer wants. But most of the time, the customer just likes simplicity. It never ceases to amaze me how many times world class companies and their entrepreneurs just don’t get this.

I get to spend a lot of time in airports these days, and most of all at Amsterdam Schiphol, where we are launching a world class new service for frequent flyers. The great thing about airports is that they are such an amazing opportunity not only to people watch, but to watch mankind – imagine all that amazing talent from all over the world and from so many different cultures. It’s an opportunity not to be missed.

A weakness of mine is my coffee and so I get to spend a lot of time in the Starbucks queue at Schiphol. They know me well by now. So, the other day, I was performing my perfunctory queue duty at the height of the airport rush hour, and I made note of the following: 6 different spoken languages, 12 different orders for coffee, and 12 moments of insistence….and the conclusion?

Bearing in mind the wide cultural diversity, not one single traveler mentioned “venti”, “tall” or “grande”. To them it was simple: small, medium or large. 12 points of denial on behalf of the “barristas” who insisted on using the language they were trained to use, and 12 points of insistence from the customer….”NO, I WANT IT SMALL. Don’t you get it????” Starbucks creates a world class experience for some of us who like coffee. But they didn’t change the world for any of us with a tongue in our heads. People like it small, medium or large. Period.

Likewise I see many entrepreneurs embark on a journey ground-breaking, world-changing, top-of the curve, bells n’ whistles, super-particle accelerating, record-breaking product that will change peoples’ lives forever. Truth is, it hardly ever does. Never over-engineer, keep it simple and humble, and ensure ALWAYS it’s what the customer wants.

The Creativity Principle

Creativity is a great thing – when it’s needed. And that’s the problem, sometimes we only get creative when we have to. And that’s often too late.

Take the example of raising investment funding for early-stage start-up companies. You start out in good times with a ground-breaking product idea that is going to change the world. You evanglise it, and hey presto – you’ve attracted a bunch of investors. The valuation is high, but the investors doesn’t seem to mind – after all, it’s good times and you’re onto a good thing.

But then, the world changes. Now you’re at the bottom of the economic curve and times have gotten tough. Guess what? New investors are laughing you off at the sheer audacity of your valuation proposal. Remember Murphy’s Law – the other queue is always shorter. There’s always another company who is MUCH further along than you are – AND has a better valuation. “Thanks, but no thanks. Next”.
So you cut a deal to stay alive – and the valuation is a fraction of your previous round – then you’re busy trying to keep your current investors happy….”hey, why didn’t I get the same deal?” There’s no way back. Now you’re in a recession, and investment funds have dried up and your cash burn rate has gone through the roof! Goodbye party time. Hello fight or flight.

OK, so you’re an entrepreneur, and all entrepreneurs fight, right? So, big nasty sabre-tooth tiger is at the entrance of your cave and your defensive instincts are kicking in. Nothing like a bit of adrenaline to keep you on your feet. The creative juices start flowing – and fast…with traditional sources of finance out of the window, you’re looking at innovative new ways to raise finance – crowdfunding, partnering with your clients, etc, etc. Ah, so you’re in bootstrapping mode all of a sudden huh? Hold on Mr. entrepreneur wise guy – you gave equity for a ridiculous valuation in the beginning and raised all this money that you probably didn’t even need. Dream On* Isn’t it a little late to start being creative?

The traditional venture capital model for early stage companies is dying – fast. Use this as an opportunity. Build half a product, with a few simple bells and whistles, then go get revenue. Stop spending time and investors’ money over-engineering a product that customers might not need. Forcing yourself to be creative in the beginning will bring 3 advantages: (i) it really WILL be your own company, (ii) you’ll spend less time chasing money and more time creating value, less time planning and justifying to investors and more time selling, and (iii) bootstrapping in this way will help you manage your finances a whole lot better.

The Thin Red Line

OK, so I end the day by sharing with the world a dirty little secret.  The other day my company went into temporary unauthorized overdraft. It was the first time in the company’s history that his had happened, and, as always, an “oversight”.  I was about to call the bank with the usual “sorry, I won’t do it again”. But I didn’t. I waited….and waited….and waited….for a call.

You see, I am the CEO of a start-up. And for once, times are sweet. Any day now, a rather large sum of money is about to hit the bank account….the result of  years of sweat and patience, working with investors to finance a rather large project at Amsterdam airport that will change the travel world forever….but that’s another story….

You see, I didn’t call because I wanted to test a reaction and this is the reason why:

Here I am, probably one of several hundred thousand CEOs and Managing Directors, watching for any potential red lines on their bank statements. On the other hand, the major banks are all about to publish their year end results, and with huge city bonuses being paid out, memories of huge government bail-outs this time last year are still rather fresh in the minds of business owners.  Why? Because the apparent government pressure on the banks to start lending more to business doesn’t seem to be working. But that’s another story too….

The call came! He introduced himself as Mr. so and so from “Collections” and he wanted to know about the red line. I explained the mistake, reminded him of the imminent arrival of a rather large sum of money, and of course, that it “wouldn’t happen again”. He blurted out some technical garbage suggesting he wasn’t paying a blind bit of attention to what I, the customer, was explaining, so I raised my voice with the words, “Listen, this if the first time in the company’s history. It is an oversight. And besides, why am I getting a call from “Collections” rather than my “Relationship Manager”, who by the way , I have never ever met during the entire history of my company”. I knew I had hit a nerve.

The best opportunity for any organization to establish and reinforce a relationship is during a momentary period of pain. It doesn’t need to happen often, and at the end, there may be no successful outcome. But sometimes, it’s not the outcome, but the moment itself that is memorable, and gives the customer a reason to maintain the relationship.

You’d think it was human nature…but some organizations do not possess that gene.  Great entrepreneurship is about spotting thin red line moments like this, and doing something about it.

To Be Or Not To Be

FailureWith all the self-help, management and leadership material out there, one would think that the phrase, “it’s ok to fail” would sink in.

It doesn’t.  Parts of the world embrace failure as a necessary rite of passage, other parts of the world shun it. It’s easier to hide behind the fear of failure rather than change the world. A lot of people want to change the world, BUT….they prefer others to do it for them….4 legs good, 2 legs bad, that sort of thing.

There is a vast ocean of “great ideas” that get talked about at the water cooler, in restaurants, on tops of mountains, in bed with partners.  But the amount of energy to transform that electrical pulse into something is, well, just a drop in the ocean. What a waste!

Fear of Failure is a Freakish Fad. Its time is done.  If the question is to be or not to be, then ask yourself this? Is it better to sit in mediocrity and have done nothing at all about changing the world or go into battle, knowing that if you do fail, at least you have done it for something worthwhile, and had a ball along the way.  D.O.

Who Cares About The Brave New World?

You’d think that entrepreneurs might have learned from Columbus. Most of us haven’t.

When trying to convince people the earth is round, you’re facing two groups of sceptics. First there’s the bunch of total non-believers who will sneer at you with the words: “Go on, make a fool of yourself. Oh, and take a parachute with you. You’ll need it when you fall of the edge”.  Forget this bunch…they’re just an itch on the skin!

Then there’s the much tinier rag-tag bunch of wannabees.  It’s not that you’ve convinced them, but the faintest possibility of life on Mars is so exciting that you’ve made them dream – at least for a while. They’re explorers, up for the adventure. They can sail, cook, clean the decks and see the North Star through the thickest of cloud.  You’re all in the same boat and it’s plain sailing for while, until you get to stormy seas…..then the waters get choppy, you’re tossed about in high winds, you struggle to maintain a course, and it’s taking a lot longer to reach your destination. Before you know it, the sailors are questioning you, doubting you, they’re cutting corners, they’re jumping ship and they’re even inspiring a mutiny.

But what do you expect when you’re a heretic? You want blind faith, trust, a loyal following and a bunch of ass-kissers? For what? Did you really think it was all going to be plain sailing? Did you have no idea about the storms that might batter you about? And did you really expect a loyal bunch of kiss-asses to follow you to the ends of the Earth?

If truth were told, 99% of the world aren’t heretics. Only you are. 99% of the world cannot turn their dreams into reality. Only you can. And 99% of the world NEVER sees the world in the way you see it. Only you possess that insight.  And until you hear those words  “land ahoy”, it is your job to inspire, lead and gain a loyal following as much as you can. But when you lose people for whatever reason, can’t convince them, can no longer make them dream, and no amount of carrot or stick works, then MOVE on. The world doesn’t owe you anything. D.O.

On Yer Bike

One morning about 6 months ago, I remember an agonizing pain in my feet as I was getting out of bed. For the runners amongst you, I am sure you’ll agree – we don’t like to be reminded we’re getting old, and so I tried running through the pain. But the more I tried to grin and bear it, the worse it got.  Doc told me it was a common runner’s (and apparently ballet dancer’s complaint) called planter fasciitis, also known as runner’s heel. The cure was remarkably simple: get some rest, and don’t run for 6 months.  “On yer bike…” I was literally told.

I hear of many entrepreneurs who start something new….and then, text-book style, they wake up one morning with an enormous pain. They try to manage through it. Sometimes, the pain goes, but most often it doesn’t. When it doesn’t go, the only remedy is time itself.

Time stands still for no-one, least of all the entrepreneur who has given it all for the business. Passion gets most entrepreneurs out of bed in the morning, but if you start to feel a constant and recurring pain during your first waking moments, it’s really time to take stock. Better to save yourself the time by moving onto something new and afresh – than to persist on slogging though something that gives increasing pain and injury.

It’s The Experience, Stupid

I have heard on several occasions now that the old fashioned sweet shop (candy store) is making a comeback. I’m not surprised. Globalization may have brought many advantages, but it has also wreaked havoc on the customer experience.  Marketers are great at super-segmenting the product, but as soon as it is on the shelves, well, it’s just another standard product….bland, super-xxl, and with a “buy-one, get one free” tag.

I remember those old-fashioned candy stores well, and so my rather large O’Hara ears have become homing beacons these days….surely word of mouth would point me in the right direction. But no such luck on this occasion. Just silence.

And then, yesterday, as I was dropping my brother off at a major London airport for his return trip to Ireland, I had my Eureka moment. There they were, on the horizon, the familiar sight of those old-fashioned candy jars, stocked 4 shelves high, and 20 jars across, each jar jam-packed to the brim with color… For a second, I didn’t really care whether my brother missed his flight – I knew I was in for a perilous moment, as I succumbed to the temptation of the enchanting call.  I changed my course, and headed for the song of the sirens, not caring whether my sweet tooth would be my fate and have me crashing on the rocks of momentary decadence.

And when my crash came, it came hard! What was that profound instinct that made me break so suddenly and give way to the voice in my head, shouting: “On second thoughts”. It was an easy revelation, as excitement turned quickly to anger and sheer frustration. I was thoroughly and utterly dejected, and this was the reason why:

For me, the whole point of purchasing anything is the sheer sense of anticipation leading up to the purchase, the ease of the purchase itself, and the memory of the purchase experience that counts. In other words, it’s the EXPERIENCE.  It’s the packaging, it’s the customer service, it’s the way the goods are laid out, it’s the opportunity to taste something, maybe a freebie, and a call to action to come back.

On this occasion, this experience was entirely lacking.  As I entered the store and got up close and personal, there was no such experience. Bland, dusty shelves, impatient and impolite staff, jars that were full of, it so transpired, candy that already exists in any supermarket today and had just been pushed into a different plastic container, and packaging that was really nothing special at all. I felt cheated. Here was a brilliant example of how a perfect business idea can quickly turn into “average” very quickly.
Oh well, at least my dentist will be happy.

A Tap On The Head

Everyone remembers his or her first car. Mine was a Renault 18 and I was in love with it. Forget the fact that it had over 100,000 miles when I bought it as a student, and it kept breaking down in the most inopportune moments. For me, that car was freedom and dreams.

Every now and again, a friend or associate will look at me, and with a glint in their eye, they say something like, “Oh Trevor, I would love to do what you do. I’d love to set up my own business”.  That’s the moment they paint freedom and dreams on their faces.

I have heard this sentence so many times now that I have become accustomed to counting the seconds before I hear the qualifying sentence. And it normally comes fast…”The problem is…I’m still waiting for an idea”.

Oh dammit! Here comes my Proustian moment. This is the sentence that makes me remember the love-hate relationship I had with my Renault 18 and the countless moments my dear symbol of freedom and dreams would simply decide to  throw a sparky on the spur of the moment – usually on some highway in the middle of nowhere.

But necessity being the mother of all invention, a short tap with an iron bar and a hammer to the starter motor and we were on our merry way again. You do this a couple of times, and you soon become quite the artist at getting the pistons going again.

I’m not exactly saying that we all need a short tap on the head every now and again to get the creative pistons going, but nothing riles me more than a sorry excuse for not doing something.

Opportunity is everywhere! You are in the thick of it. If you can’t see it, it’s because you are not frustrated enough with the way a good or service is being delivered. Get angry at the world from time to time. Do more than complain. Do it yourself. After all, there is usually nobody who can do it better than you, right? Think this way, the pistons will start firing, and the opportunities will start to flow. D.O.

Crystal Balls

A colleague once made an observation that business plans are akin to lamp-posts. Drunks lean against them, dogs urinate against them, but properly utilised, they can serve as illumination. I laughed, and shrugged it off – besides, I was slightly under the influence, and after all, I was in the height of my strategic planning days.  20 years later, as a battle-hardened entrepreneur, the phrase still haunts me.

I remember the days at Nortel Networks in the late 80s very well. The walls were crashing down all over Eastern Europe, and everything was up for grabs.  I was based out of the satellite office in the top floor of the Hilton Hotel in downtown Vienna, Austria and was covering the new “Eastern Europe” as Head of Business Planning for the region. I remember poring over the long-term political and economic forecasts from the Economist Intelligence Unit, trying to figure out what the market will be like in 10 years in the fledging new democracies of Poland, Hungary and the then Czechoslovakia.  And I recall my youthful naivety – applying what I had just learned in business school about long-range planning and long-term forecasts. Everybody had crystal balls back then.

The problem with possessing the natural arrogance of an MBA grad and a background in strategic and business planning is that you start to think you have a head start. In reality, you don’t, and here’s how the cookie normally crumbles:

First, you do the consumer research. After all you want to impress the investors you’ve done your homework, right? So you make it nice and quantitative, talk about margin of error, 95% confidence level, market size and so on. Then, you take the percentage of people you have proven are interested in your product and say “ah, ok, so let’s be conservative – even if we only take the percentage of the population who are very interested, that will give us a penetration rate of 5%”.  Penetration leads to demand leads to customer numbers, to orders, to revenue and then cash flow. Oh, and by the way, it’s all a “conservative estimate”.

And then finally, you’ve convinced an investor to put money into the business plan.  But what happens then?  She’s going to hold you to the numbers. Guess what? Either you falter, because you’ve just realised you’ve duped yourself, and you’re no longer sure of your own numbers, or even worse, several quarters later, you under-perform and find your shareholding is diluted because your performance plan was tied into the guesswork you produced in the first place.  Tail wags dog – enter stage left, big kick in your veritable crystal balls.

Business is all about making things and selling things. Period! Business planning is all about fooling yourself with a huge amount of guesswork, or at best a lot of procrastination.  Here’s the test: put two savvy investors in a room. Provide one with a pile of beautifully presented documentation with statistics, research and financial forecasts, all backed up with an experienced team, and provide the other with a half-baked product that is already generating cash, but with substantially less documentation and management team members, you can guess on who is going to place their punt.

If you’re in an early stage start-up, forget the planning, and focus on getting your first order. Murphy’s Law: Things are never as good as you plan, and never as bad as they appear to be.