Business has always been a hit or miss venture. According to conventional wisdom, the first thing every founder must do is create a business plan—a static document that describes the size of an opportunity, the problem to be solved, and the solution that the new venture will provide. The assumption is that it’s possible to figure out most of the unknowns of a business in advance, before you raise money and actually execute the idea. So entrepreneurs have to write a formal business plan, pitch it to investors, assemble a team, introduce a product, and start selling as hard as they can. The pressure and stakes are extremely high. You either go big or go home in tears.
But in more recent times, a new method has emerged to change the rules; one that makes starting a business less risky than it used to be. This method is the first of the 7 new rules of business you must understand if you want to succeed in business today. The first rule is this; fast is the new big. While the News Corps, the company that acquired MySpace, was busy holding strategy meetings and engaging in bureaucratic inflexibility, a college student, in his dorm room was busy taking and quickly implementing user feedback and forging the Facebook we know today; proving that the customer, not the corporation, now has the control. Before we go further, remember to subscribe to After School Africa for more insightful videos like this.
1. Fast is the new big
This is the method called, “the lean start-up”. This method of starting and growing a business favors experimentation over elaborate planning; and customer feedback over assumption. Instead of engaging in months of planning, the entrepreneur takes their idea to the customer, get real feedback, adapt their product and business model based on continued customer feedback, and only go full scale once the business model has been proven. The emphasis is on speed. Failing fast and learning quickly.
The lean approach helps new ventures launch products that customers actually want, far more quickly and cheaply than traditional methods, and makes start-ups less risky. And it has emerged at a time when other business and technology trends are likewise breaking down the barriers for businesses. The combination of all these forces is altering the entrepreneurial landscape. Businesses are using this method to improve their chances of success by following its principles of failing fast and continually learning.
2. Niche is the new shape of Demand
In the past, running a small business was highly risky. It was the era of mass production, hits, and bestsellers. If you were an author, you needed to write books that will appeal to a mass market. If you were a musician, Heal the World would be a preferable song to something like Agony of a nurse.
Today, the rule of the game has shifted. Our economy has shifted from a few mass markets to millions of small niche markets. Consumer demand is moving away from a relatively small number of hits, towards the demand for a variety of niches. Businesses are more able to serve a niche market, stay small, and highly profitable. Authors can write books targeting a specific audience, musician is creating songs for targeted audiences. Businesses are creating products meeting a specific need for targeted audiences. What this means is that the field of business has grown bigger to accommodate more entrepreneurs. And that you don’t need a mass market to succeed in business. Instead of trying to appeal to everyone, you have a higher chance of success to appeal to a target audience who are more likely to patronize your service.
3. The Era of invisible products
Have you ever wondered how businesses like Google, Facebook, Whatsapp, and such companies make money? A few years ago, while at a meeting at Google, two Google employees asked how my website makes money or whether I was running a non-profit organization. Unknown to them, my business actually makes money from the company they work for. This wasn’t as confusing decades ago. You could easily tell what product a company was selling and how they were making money. But this rule has changed. Welcome to the era of invisible products.
Today, businesses are selling software licenses, downloadable digital products, user-generated data, advertising space, commission on the sharing economy, and several other business models. Today, technology has made it easy for businesses to make money selling invisible products. Most online content creators do not sell any tangible product. They just focus on creating content their audience wants, while an advertising network takes care of dealing with advertisers. Understanding this will expand your thinking when thinking about business.
4. The Infinite Shelf-space effect
In the past, if you were in the business of selling T-shirts, you had to print a bunch of T-shirt designs and market it as hard as you can. The amount of product you can have is limited to your physical space. Today, you don’t need to print a single T-shirt. Just create as many T-shirt designs as you want, upload the pictures online, and only print when you get an order. You are not limited by space, only limited by your imagination. This is the infinite shelf-space effect. There is no limit to the variety of products you can have.
The traditional retail business model can only stock a limited number of products on expensive and limited shelf space. So they stock the likely hits and best sellers to maximize stock turnaround and sales. Online retailers, on the other hand, can stock just about anything; and the variety of products has no shelf limit. This has drastically reduced the cost of doing business. As an entrepreneur, think about how you can leverage the infinite shelf-space effect in your business.
5. The era of Toolmakers and the Producers
WordPress was created and thrown at writers; they created the blogging industry. Facebook, Instagram, Twitter were created and thrown at us; we created social media careers and professions; YouTube was created and thrown at creators; they disrupted the entire media industry. There are many toolmaker-producer business models all around us today, disrupting businesses and industries as we know it. These toolmakers drastically lower the cost of media production, storage and distribution; or rather, they democratize the media. Today, every business is in the media business, whether you like it or not. Businesses need to be present and creating content across relevant digital media platforms. The entrepreneurs who understand and embrace these tools enjoy an unfair business advantage, while those who resist them get to endure catastrophic decline into obscurity.
6. Money is just a click away
People are money. Wherever people gather in numbers, there is money to be made. That is why big brands struggle to sponsor reality-shows, UEFA leagues, world cups, and Olympics. They understand that people are money. As objectifying as that may sound, but it’s the reality.
Today, people are just clicking away; which means that money is just clicked away. Your customer is everywhere and very much within your reach. This also makes it easier for businesses to start lean because you get to easily reach your prospects to test your business idea before going full scale. Regardless of what you sell, you have Whatsapp, Twitter, Facebook, Instagram, and other media platforms to reach your customers. It’s an outdated business practice to set up shop and wait for people to work into your business premise. If you want to grow fast and make a lot of money consistently, you have to meet your customers where they are and help them to find you. Businesses need to break away from the old pattern of sitting and waiting for customers to come.
7. Building Systems is easier
Focusing on building a system has always proven more profitable in the long run than focusing on profit. For instance, a business with a team of people occupying key roles is more likely to succeed than a one-man hustle. You are more likely to succeed in the long run when you build your business around an idea or concept than just hunting for what’s new and appealing. But how systems are built around a business has evolved.
Today you hear a lot about passive income; a type of revenue generation model where the owner’s presence or effort is not required for the business to continue generating revenue. In fact, this is increasing the goal of many business owners; to build a functional system around their business that doesn’t require their presence to continue growing. Today, with the right tools, businesses of any level can achieve passive income status.
The rules of doing business have evolved in many ways. If you want to succeed in today’s business world, you must understand how things have changed, and adapt to that change. If you found this video helpful, like and share it with someone. If you are yet to subscribe to this channel, now is a good time to hit the subscribe button. Until next time; YOUR SUCCESS MATTERS!