Little nightly thoughts
by Business Exploration

Dear Fellow Innovator,

Let's face it:

most of the Entrepreuners, Business Owners and CEOs have no idea why their products and services sell.

Better: they have no "strategic idea" why their products and services sell.

Yes, they know that if they bring certain products and services to certain clients, these clients will buy them. But they do not know "why" this happens.

This is not a problem if you are content of your results and your horizon is shorter then the average disruption period in your industry.(1) But it is a sure roadblock if you aim at a repeatible, profitable and scalable business.

This emerges with all its evidence when you are bringing a new product or service on the market, or the market is - as said - being disrupted by something or someone changing the fundamentals of the game.

If you don't have a "strategic idea" about why your business sells, it is very rare (2) that you can:

  1. repeat business:
    your customer may buy a second time from you, but if you do not know why, it's difficult that you sell to a customer who don't know you.
  2. make it profitable:
    for a certain part, profit depends by price, and pricing it's a matter to understand why customers buy from you.
  3. scale your business: scale means growing your customers base, and your organization. if you do not know why your customers buy from you, it is very tough to align your organization's priorities to your customers' priorities.

Without understanding "why" your customers buy from you all the above it's hard, and even if you are a lucky boy, your business will be much less than it could be.

You will miss opportunities, overlook severe risks, spend a lot of time without seeing a real growth, and wasting money in commercial activities that do not shift the needle of your business performance.

You see this happening everyday, even to giant organizations with more than a 100 years of experience (3)

Can you change this?

Let's start from "should you change this?".

If your horizon is shorter than the average disruption period: do nothing. Enjoy your benefit and be ready to move on. (4)

If instead you are the Business Owner or the Entrepreuner, you may be interested to know that there is a way to inject a bit of strategic understanding into your business model, that don't cost a fortune and can make you live better. (5)

I call it the "Roadmap to Market" and it is a coaching program that helps you dive into the real "Why's?" of your business and emerge with a clearer agenda on where to spend your time and money.

How it works, it's a bit different than classic marketing efforts and more close to a full time Lean Startup accelerator.

The Roadmap to Market

it is made of 4 key steps:

Model, Market, Brand and Funnel.

The first step is about modeling your business "machine".

I use a modified version of Osterwalder's Business Model Canavas, that is better at visualizing the organizational elements and human factors of a business. you can find it explained in this Article: "the Bleu Canvas", that I wrote in 2015 and since then has been read by more than 3000 persons and adopted by Lean startups coachers as far as Australia.

I also use another tool that you can find into the Blue Ocean Strategy Methodology, that helps when you have to define the differentiating traits of your offer (whether it is an MVP - Minum Viable Product, an NPI - New Product Introduction program, or and old faithfull product you want to refresh ). It is the Product Profile, and here I send a caveat about using it: "to look at offer's results and not at offer's features".

The second step is about sizing Market and competition

I spent a life in General Electric creating market models, capable to predict demand on the medium term period ( "on the long run, we are all dead" - Keynes ) . I have assembled a few best-practices about top-down and bottom-up demand forecasting, that proved their effectivenes in various context.

Connecting the demand projections with the business model, helps a lot to define the target market share, after the competition is weighted in.

Most of these models are based on classic marketing theories. The value added here is about the experience in using them. I have used to help several industrial business owners, with some good result:

  • One of them was able to anticipate a market swing and move from the Energy to the Aerospace market, almost doubling its sales.
  • Another was helped to convince investors to bid on the Aftersale side of the business, achieving a 30% increase of sales in a couple of years.

When you have a clearer visibility you can adress your effort better. The contrary also holds true.(6)

The third step is about building a memorable Brand.

Here I issue a sign of warning:

In my coaching methodology, Branding is not about having a nice picture, capable to elicit emotions and push client's buying behavior. Here it is about grabbing a market share and hold it with two hands so nobody can steal it from you.

You can get a better understanding of what this means in terms of choosing the right image, color, message, unique selling proposition... in the classic books of Positioning from Trout, or you can tease your memory with this simplified refresher I wrote about it:

Marketing is a risk taking activity

The sure thing is that your Communication Marketing team will, after this, have much better guidelines and material ( keywords, target's definition, data and information...) to build effective promotion and advertising campains... or at least to shot not its ads in the dark.

The Fourth and last step is about building a Sales Funnel.

It can be on line or off-line. It may involve only you or orchestrate the actions of agents and third parties. But when it comes to selling technology, it cannot overlook Jeffry Moore model described in "Crossing the Chasm".

The only problem with this model is that the details are written on a 250 pages book, that could have used easily twice the pages to explain all its findings into detail.

It took me a few weeks to summarize it in a manageable tool, using my experience to select those pieces that make sense in the context of "Engineering to Order" kind of business.

Here a sample you may find "actionable", when dealing with internal communication.

For all others, and expecially those business that can rely on on-line sales funnels, I have since few years collected the lesson learned into a framework that I call " the sales Carousel", that mixes classic direct marketing and internet portals models. Here a brief description:

The sales Carousel

while if you want to go into the details of opening a new market, you may read this article I published some time ago:

The B2B Sales Funnel

The best part of this coaching program is that it does not take a lot of time to complete it.

In its basic format it's just 8 days. And it is face to face: me and you, the Entrepreneur.

Most of my Clients complete it in a couple of months, using 1 day per week.

If you want to know more about the building blocks of the Roadmap to Market you can get them on this page of my website, where you find also an idea about pricing and hints about how to get it financed.

Or you can contact me directly:

Notes:

  1. the average disruption period is shringking: technology innovation has an exponential path today, and political stability (a.k.a: market stability) is far from the pre-internet world
  2. unless you are a 21 years old boy hitting a nerve on the post-teenage community looking to calm down her hormonal storm, and you exploit it with an on-line faces book.
  3. any reference to facts related to my former employee: General Electric is totally by chance and not intended.
  4. any consideration about CEOs who move from company to company every 2-3 years is out of the scope of this article.
  5. supposedly you are not a masokist willing to work as a hamster in the wheel, neither a scarymovie fanatic who loves bad overnight business surprises
  6. Disclaimer: the fact that my market models predicted the 2009 Crisis 2 years in advance, was not used by GE to change its course of action

To talk about this, contact me at the numbers below.
Happy reading!

Flavio

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