There’s a favorite book of mine, for anyone interested, Look Back to Get Ahead: Life Lessons from History’s Heroes, by Michael Anthony Jackson. It’s a great read. The author uses stories from historical figures like Alexander the Great and Genghis Khan to illustrate lessons to live by. More importantly though, it reminds me that history almost certainly repeats itself, especially in business, and that we should keep looking back when planning for the future.
My MO when writing these articles usually follows a ‘news you can use’ theme. Hopefully my retrospective of 2016 can help you guys get ahead in 2017!
Image: successful entrepreneur Mark Bouris
Managing growth: In any year, growth is always a double-edged sword. Grow too slowly and your investors become impatient; grow too quickly and you risk blowing up. In the book I mentioned earlier, there’s an interesting story about Alexander the Great’s travels through Phrygia and the city of Gordium (modern day Turkey). The story details the origin of the phrase, ‘cutting the Gordian knot’, commonly used to describe solving a complex problem with a bold action. The story goes: that instead of untying a rather complicated knot attached to an ox cart, the impetuous Alexander instead severs it with his sword.
I saw a lot of businesses this year, impatient ones and slow ones too. The slow ones drove me nuts, taking forever to make decisions and even longer to execute. The impatient ones equally frustrated me, overspending on big ticket marketing, raising capital too early and diversifying into new revenue streams before even getting their first product right.
I’ll admit, it’s a tough act to manage, but my takeaway from the guys doing it well, is they seem to hold on to the small business mentality, even well into maturity. They keep their cash flow tight and make decisions quickly!
Xero was my pick in this category for 2016. I caught up with the Aussie MD not long ago and listened to what the company has been able to achieve this year. He said the company’s ethos and operating philosophy is the same as when they started, just 10 years ago. The business is now a multi-billion dollar enterprise, running circles around the incumbents.
Brand: Staying on brand or having a brand that’s aligned to the product offering is important, but building one from scratch is expensive, and takes time. I saw businesses this year run just one brand and others launch two or three new ones.
When deciding, I noticed two prevailing principles: size of the existing brand, and remoteness from product. If you’re Uber, of course you’re going to name your food delivery service UberEATS, just as Alibaba named its payment service Alipay and Amazon its content streaming service, Amazon Prime.
Contrarily, if your brand isn’t ubiquitous, then launching a new one can make sense too. The perception of expert skill or know-how in a particular product or service can go a long way with customers. Just the other day I noticed a popular clothing brand now making watches and eye-wear. An inherent feeling of distrust came over me, knowing the product was produced outside the brand’s core competency.
Sales: Big, small or somewhere in between, sales is a critical function in any business. This year I observed problems on both sides of the fence. I saw startups build amazing products and raise tons of dough, but not hire one trained sales specialist with the proceeds. On the other hand, I saw other businesses go crazy with marketing and outbound sales, but lose most of the work won because they couldn’t service the demand!
It’s another balancing act, but a business I’ll be taking notes from this year is right where I’m writing this article: LinkedIn. Earlier this year, I heard people scoff at the takeover price paid by Microsoft – US$26.2 billion, a 50% premium to the last closing price. Sure, it was a lot money, but LinkedIn isn’t your average social media network. These guys, if they haven’t already, are on track to owning the global jobs market. They’re a B2B business, selling enterprise software to recruiters and corporates on every continent, and they do it via a highly trained and effective sales force. They don’t sit and wait for the market to come to them, they go to the market!
Technology & Staff: Another consistent hallmark of success I noticed this year, was awareness and use of technology. Software is so cheap and accessible these days that there really isn’t an excuse anymore. It should probably come as no surprise that the guys I noticed using services like Xero, HubSpot and MailChimp were young entrepreneurs, but it shouldn’t be their exclusive domain.
I’m an older guy and I’ll admit to not knowing a great deal in this area, but I always try and learn, and if I just don’t get it, I’ll make sure there’s someone in my organization that does.
Even if you’re a small business, having just one youthful staff member who understands social media and can navigate the digital landscape, is invaluable.
Hopefully you guys have benefited from my thoughts this year – stay safe and have a Merry Christmas and Happy New Year!
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