Forbes publisher Rich Karlgaard sits on the board of a wireless startup in Silicon Valley. He says the entrepreneurs are brilliant but they see opportunity everywhere. It’s the job of the board to get them to prioritize and focus.
He’s right about that, but figuring out what to focus on is really the bigger, make or break problem for any enterprise. Finding the right solution to a critical market need - that you can actually build a successful business around - now that’s what separates the cream from the crop.
Some entrepreneurs make brilliant business people, but they’re a rare breed. The rest just can’t connect the dots between ideas and products that customers may actually want to plunk down money for. Those entrepreneurs lack the business gene. It’s not an insurmountable problem, but one that needs to be addressed, nonetheless.
Examples: Bill Gates was the former type. He instinctively knew what kind of deal he wanted to cut with IBM for the PC’s first operating system. I’m not saying that turning Microsoft into a technology powerhouse was a walk in the park, but with a little help, Gates was up for the task.
As for the latter type, well, Steve Wozniak needed Steve Jobs. We’ve all seen the difference between Apple with and without Steve Jobs. Make sense?
I’ve worked with both types of entrepreneurs, but I seem to attract the latter type. This started way, way before I became a consultant.
An engineer at Xerox - one of my customers in the late 80s - tried to get me to help him take his invention to market. I’ll never forget it; it was “the perfect paper clip.”
Another engineer had an idea and a design for a handheld, digital book reader … in 1993. It was too soon for that sort of thing, but he didn’t know that. Fortunately, I did.
Look, I don’t care if you’re an engineer, a marketer, an inventor, a CEO, an academian, or an enterprising opportunist. Every successful idea has to satisfy certain criteria for the business case to make sense. When I evaluate a concept, product, or service for business potential, I ask five questions. The answers essentially make a business case.
Five Questions to Develop a Business Case:
- What’s the market need? What critical customer or market problem does it solve?
- Is there a big market opportunity? Is it big enough to build a company around and interest investors?
- What’s the business model? Where does the company fit in the food chain, who will its customers be, and how will it make money?
- What’s the value proposition? What’s its competitive differentiation with respect to competing ideas, technologies, products or services?
- What are the competitive barriers? How defensible is it? Patents, know how, trade secrets, trademarks, or just time to market.
These are loaded questions, to be sure. But if you can’t build a compelling 2-pager and 10-20 slide presentation around the answers, you’re going to have great difficulty building a successful enterprise.
Of course, the knowledge, strength, and commitment of the individuals involved are critical, as is the timing of the enterprise. That goes without saying. As for focus and prioritization, well, once you know what to focus on, then you’ve got the whole execution thing to worry about. That’s a post for another day.
