Business ideas and wishful thinking
When starting a new business, whether selling services or products, whether B2B or B2C, it always start with an idea and a worldview.
Innovative ideas can come from market data or simply from your personal observations and experience as a consumer—as in the case of Sara Blakely who started Spanx.
A worldview is exactly what it sounds like—the way you perceive and understand reality based on your personal experience, culture, ideologies and education. Business ideas often span from the personal worldview of an entrepreneur, a far more emotional territory than data.
Here’s the problem. You can use data intelligently to make informed decisions about the validity of your idea in terms of market opportunity and business model, or you can use it to confirm your worldview and make it tell you what you want to hear. That's called wishful thinking.
The other problem is that social science data is mostly based on asking people questions rather than making measurable observations. You just need to watch how often political polls are proved wrong to see the problem with that method. Rather than watching to see if you’re cheating on your wife, polls ask you if you are. Then they treat your answer as a fact rather than just the bullshit it is.
For a new business idea to have a chance at being successful, it requires three main ingredients:
- Enough empathy to understand the worldview of your target market. This requires more emotional intelligence than business acumen because you need to accept that your worldview might not be shared or may not accurately reflect a profitable market opportunity.
- Enough reliable data based on measurable evidence rather than hearsay, personal opinions, poll results, or wishful thinking.
- Creativity, or an innovative angle at solving an existing problem.
That’s when being able to play devil’s advocate can prove useful at the startup phase, or better, granting people you trust that privilege.
Principles and brand culture
A principle is a value you stick with even when it might lead to unfavorable short-term outcomes.
Principles are by definition an investment in a long-term view.
It’s really hard to build a brand on trust if you let your business principles slip when things get tough and you accept to compromise them for the pursuit of short term goals—or immediate profit, or pleasing shareholders.
Brand culture is only as strong as the principles it's built upon.
Principles are the foundations of our reputation. This is true in our personal lives and in business. Unless you infuse those principles in every aspect of your business culture that potentially impacts customer experience, you cannot claim to have a brand.
Brands, products and marketing bullshit
According to Allison Johnson, Apple’s VP of Marketing, Steve Jobs hated the word “branding". The CEO of the world’s greatest brand always stated that Apple was first and foremost a product company. Jobs’ closest collaborator at Apple was Jony Ive, who was...guess what? An industrial product designer.
In Jobs’ worldview, being a product company meant obsessing about customer experience. Apple was transformed by this obsession—not by whatever you want to call branding.
In the bestseller "How Brands Grow", Professor Byron Sharp demonstrates that "Most of what we call brand loyalty is simply habit, convenience, mild satisfaction or easy availability."
Let’s translate this for New Age Marketers who believe in such pompous bullshit as customer engagement, brand authenticity, and socially responsible storytelling: Unless you make a great product, easy to buy and good value—and you live up to the promises that you make—branding is just useless verbiage, and brand loyalty is delusional.
In the Pandora’s box that is Social Media, instead of fans you can find disgruntled customers shouting about the mistreatment they get at the hands of companies whose CEO fell asleep during Marketing 101.
The only brand strategy that works is to deliver what your customers want, and to do it consistently. Needless to say, you can’t expect to be taken seriously in any marketing organization if you suggest that the basis of consumer behavior is so blatantly obvious.
A bad answer to the wrong question
In the past two years, I have met with a number of real estate developers who were in dire straights. Projects stuck in the pre-sale phase with disappointing numbers, projects almost completed and unsold, projects that ran out of money.
These developers were convinced to have a great product They blamed low sales results on the "market", on salespeople, on government policies, on the competition, or on random Black Swan events like pandemics.
On one occasion, I candidly asked a developer what his market was. In reply I got a puzzled look and a laconic “I build luxury houses”.
There are two reasons why this answer is interesting.
The first is that "luxury houses" is not a market. At best, it’s a vague product category. I asked who the customer was, he answers product.
The second is that the term “luxury” hints at a very limited demographic view of marketing. In the luxury market, what differentiates customers most significantly are psychographics—or psychological attributes. People who buy a Ferrari Portofino, a Rolls Royce Ghost, or a Tesla Model S are all in the market for a luxury car, but they also have very different lifestyles, values, opinions, and attitudes.
Perhaps the problem is in the question. A better one to ask would be “what is the worldview of the group of people you chose to build houses for? "
If you don’t make the deliberate choice of designing a product for a selected group of people who share a specific worldview, you are bound to struggle with product/market fit.
Why strategy isn't a luxury
Any time we decide on a long term goal and invest resources in achieving it, we are strategizing. It’s about maintaining a balance between ends, ways, and means. A strategy needs a Why, a How, and a Worldview or perspective. Tactics, on the other hand, are the steps to achieve it.
Without tactics, a strategy is as useful as a Lamborghini with flat tires.
The problem is that in this day and age of marketing gurus, social media influencers, bad men advertisers and digital hustlers, businesses end up pissing money away on tactics that only succeed at making richer the people who are paid to implement them.
If only businesses could abandon their addiction to short term-ism and focus first on the long term imperative of building their brands.
The contradiction is that for a majority of business owners, surviving this week is a more compelling prospect than the promise of a great brand three years from now. Brand strategy is viewed as a luxury they can’t afford.
But without a strategy you might as well give your platinum credit card to marketers, designers and advertisers, and tell them to go shopping.