Assessing the problems you can solve for your clients and the true size of those issues applies to both new and mature businesses. In fact, it is the most critical component of any sustainable business model. In a recent survey, CBInsights noted that over 40% of companies fail because they don’t solve a market need that is great enough to support a business.
So how do you ensure you are building a sustainable business and staying relevant to your current and future clients? First, you have to be honest with yourself about what problems your business is solving for and what it is not. That process then helps you understand the true size of the market that you are addressing and what percentage of that market you will be able to reasonably capture. Research and development of new solutions and products can be very expensive, but as I discussed last month, a great way to fast track that process is to build a listening relationship with your clients and prospects. Asking about their challenges – and listening patiently for the answer – prompts them to freely explain their goals and problems. By not listening, you run the risk that you and your management team are locked in an echo chamber of your perception of the market, which may blind you to the real opportunities that you can solve for your clients.
At ELITE Americas we work closely with our companies to help them establish realistic and achievable targets that are founded on credible assumptions and focused on real client problems, and this assessment forms the basis of all subsequent strategic and financial planning. Moreover it’s not a static state analysis. Client needs and market conditions change constantly - you must be aware of those forces and adapt the strategy accordingly. COVID has forced many business to adapt very quickly to new operating models. Companies that we have seen succeeding in this challenging environment are those that combine a strong client relationships with an critical analysis of the problems in their markets.
The next step is to test your assumptions with an minimal viable product (MVP). Conceptualized by Eric Ries as part of his Lean Startup methodology, an MVP allows you to witness firsthand how a customer actually uses your product or service and its ability to solve a problem so that a more robust approach can be developed as you learn more. This approach also allows you to create a niche of clients for whom you are genuinely solving an issue that no one else can. The number of these customers may be small at first, but delivering 100% satisfaction to them before launching headlong into the larger marketplace leads to a tried and tested solution that will eventually create a larger customer base.
I like to remind the SMBs in our ELITE program that Phil Knight didn’t invent the running shoe. What he and University of Oregon track coach Bill Bowerman were looking for was a sole that would perform on different track surfaces. Knight developed what could be considered an MVP – a running shoe with a sole fabricated in a waffle iron. He experimented with runners, perfected the design, and launched a new generation of running shoe – and the company we all know as Nike.
Nike’s trajectory began with Knight’s solution in the early ‘70s, but Nike remains a leader today because it continues to address real problems of professional and aspirational athletes alike.
Closer to home, Andrew Schiffer recognized a potential business opportunity when he couldn’t book a rental van. His own challenge led him to believe others were as frustrated as he was. He was right. Schiffer’s launch of NEO Van Rentals in Dundee, Ohio, has resulted in steady growth for his company. You can read about this successful ELITE company in this month’s newsletter.
The lesson is this: Whether you’re a giant global competitor like Nike or a small-to-mid sized business in the Midwest, recognizing a problem, and having the vision and ambition to solve it, leads to success.
Explore our website to see how other ELITE companies are putting this philosophy to work.
Tom Tyler, Head of ELITE Americas