Connect with us

Performance & Growth

Which Type of Entrepreneur are You?

One size doesn’t fit all. There are several different paths to entrepreneurial success.

Greg Fisher

Published

on

3 Seedlings

A few months back one of my students visited me. He had recently read the best-selling book, Blue Ocean Strategy. I had strongly recommended the book in one of my classes and, on my recommendation, he had purchased it and invested his time in meticulously working through the concepts. Yet on finishing the book he felt lost, despondent and overwhelmed.

He and his older brother had recently bought a struggling independent coffee store which they wanted to transform into a viable, thriving operation that would enable them to pursue their passion for music with a sustainable income. He complained that concepts in Blue Ocean Strategy seemed foreign and unrealistic and he wondered why I would recommend such a ‘pie in the sky’ book. Just a few days earlier I had met up with a friend from my MBA class. She was involved in launching a new social networking application that has the potential to transform the way we interact online. She explained to me how the same book had helped her create a practical and relevant blueprint for designing and implementing her new innovative product. She described in great detail how it was the “most valuable and insightful book” that she had ever read.

Why does one entrepreneur interpret Blue Ocean Strategy to be ‘pie in the sky’ while another interprets it to be the most valuable and insightful book that they have ever read? The answer lies in this simple statement: Not all entrepreneurs are the same. The term entrepreneur is used to describe any person launching and managing his or her own business, but in reality there are many different types of entrepreneurs. The ingredients for entrepreneurial success are very different depending on what kind of entrepreneur you are. It is hugely valuable for a person launching and managing a business to understand what kind of entrepreneur they are and to align their actions with the principles that govern that kind of entrepreneurship.

So what kind of entrepreneur are you and what does that mean for the way you manage your business? Some of the research that I have done would suggest that there are four broad categories of entrepreneurs: survivalists, lifestyle entrepreneurs, growth entrepreneurs and revolutionaries.

Survivalists are in business merely as a means of economic survival. They operate micro enterprises to feed themselves and their families. They create very little long-term wealth in their operation; they are merely keeping the business afloat while living on the profits from one day to the next. Examples of survivalist entrepreneurs can be found all across South Africa – they are the basket sellers on Durban beachfront, the people selling sunglasses on the corner of William Nicol Highway and Republic Road and the person selling Stormers flags outside Newlands Rugby ground.

Lifestyle entrepreneurs get into business as a means to a particular lifestyle. Being in business for themselves means that they can live in a certain place, have the freedom to pursue another passion (such as music, sailing, writing) and the autonomy to dictate when they do and don’t work. They tend to engage in higher value activities and use more infrastructure compared to survivalists. They therefore usually need to make a larger upfront investment in the business than survivalists but they get better returns. In most cases these people are forgoing the certainty of being an employee in an existing business for the freedom of autonomy and choice that goes with being an entrepreneur. The owner of a thriving guesthouse in Plett, the coffee shop owner who needs time for his music and the local nail parlour owner who wants afternoons off to spend with her kids are all examples of lifestyle entrepreneurs.

Growth entrepreneurs are driven by the competitive nature of business. They get into business for themselves to create something of long-term value and they continually seek to make the business bigger and more competitive. They usually need to make a larger investment in the business than lifestyle entrepreneurs, both in terms of upfront capital investment and the time they invest in managing the business as it grows. They often take on more risk than lifestyle entrepreneurs but that risk comes with financial rewards if the business succeeds. The consultant who keeps hiring more associates to service more clients, the media entrepreneur who is continuously launching new products to sell more advertising space and the estate agent who is franchising her operation to facilitate growth are all examples of growth entrepreneurs.

Revolutionaries create a business as a means to change the world. They are driven to disrupt and reshape markets. They look to make big bets and if these pay off they usually become famous. Globally, Steve Jobs, Richard Branson and Bill Gates have left indelible marks on the industries they entered. In South Africa, Raymond Ackerman reshaped the retail industry, Adrian Gore disrupted the healthcare sector and Gidon Novick turned domestic airline travel on its head. Such entrepreneurs often need to invest substantial amounts of capital in their businesses to facilitate growth; with that comes high expectation. They are notorious for working hard and for demanding much of those who work for them.

These four kinds of entrepreneurs can be represented in a simple diagram (see figure 1) which depicts the investment required and the revenue generated by the different categories of entrepreneurs. As can be seen in the diagram, survivalists invest very little in their business but they barely operate above the ‘breadline’. Lifestyle entrepreneurs make an investment in their business – usually their own money or money from family and friends. They use that money to create a business that initially grows but after a period of time it reaches a steady state and they are able to live on the income. Growth entrepreneurs typically need to make larger investments in their business and often rely on capital from external sources to facilitate growth. They push hard to grow the business and keep pushing for growth, even after it is making more money than they need for their chosen lifestyle.

Revolutionaries usually need to make very significant investments in their businesses to disrupt a market – Fred Smith of Fedex raised US$100 million in 1971 to create the infrastructure for his overnight delivery service. Adrian Gore ended up owning only 5% of the company he created because he needed to access significant amounts of external capital to get Discovery off the ground. Revolutionaries invest this capital in ventures that have significant potential. If the business takes off it will generate substantial growth and will probably keep growing for a number of years.

The questions every entrepreneur must answer:

My research indicates that there are two key factors that determine whether an entrepreneur is likely to achieve success with their chosen entrepreneurial trajectory.

  • First, does their chosen trajectory – lifestyle, growth or revolutionary – align with their personal values and subconscious entrepreneurial desires?
  • Second, do they have the skills to deliver within their chosen trajectory?

People subconsciously have a desire to be a certain kind of entrepreneur. This desire is driven by their underlying values – the things that they hold most dear.

Those who recognise how their personal values are driving their subconscious entrepreneurial desires, understand what kind of entrepreneur they want to be and act in accordance with that choice, are more likely to be successful.

Those who fail to recognise how their personal values are driving their entrepreneurial desires risk getting on the wrong trajectory which can have catastrophic consequences. Such people find it hard to align their individual actions with the actions demanded by the business. Being a successful entrepreneur takes hard work, effort and energy, no matter which trajectory you are on. To sustain that hard work, effort and energy, the entrepreneurial journey needs to fit in with the entrepreneur’s life. If your entrepreneurial journey fits in well with your desired life, you will have the energy to sustain what you are doing. If your entrepreneurial journey is out of sync with how you would like to live you are likely to run out of energy.

If your values and desires align with your chosen trajectory, you need to have the skills and knowledge to deliver within that trajectory. If you have the desire but not the skills and knowledge, you may work hard and do everything in your power to try to succeed, but you will continually come up against barriers. Such a person would do well to first develop the right business and entrepreneurial skills before pushing too hard down their desired entrepreneurial trajectory.

So what does all this mean for you?

If you wish to be satisfied, fulfilled and successful on your entrepreneurial journey, follow these three steps:

  1. Recognise which entrepreneurial path you subconsciously wish to be on – lifestyle, growth or revolutionary.
  2. Assess if you have the skills and knowledge to be effective on that path.
  3. Assess if the path you are currently on aligns with where you really need to be and make the necessary adjustments.

1. Assessing your desired entrepreneurial path

Assessing your desired entrepreneurial path involves being brutally honest with yourself. Many people automatically assume that they wish to be revolutionary entrepreneurs – “Wouldn’t it be nice to transform a market and become incredibly rich and famous?” they think to themselves. But when pushed to think about what they really desire, they don’t want the risk, the stress and the endless hard work that goes with building a revolutionary business. You need to go beyond your surface level desires to understand what kind of business will meet your long-term desires and align with your personal values.

10 by 10

One way to do this is to engage in what I call the ‘10 by 10’ exercise. This requires you to get a blank sheet of paper and write down ten sentences describing the kind of life you would like to be leading ten years from today:

  1. What work do you want to be doing?
  2. Do you want to be living in a specific location?
  3. How do you want to spend your days?
  4. How do you want to spend your weekends?
  5. How wealthy would you like to be?
  6. What other aspects of your life do you wish to nurture?
  7. What would you like to have achieved in the past ten years?
  8. What assets would you like to own?
  9. How do you want to divide your time?
  10. What role will family play in your life?

Be thoughtful and deep in answering these questions. Don’t sell yourself short – write at least ten sentences to create a full picture of what you desire.

Once you have ten sentences outlining your life ten years from today, consider the kind of entrepreneurial trajectory necessary to get you there and whether you are willing to embark on it. Living out each entrepreneurial trajectory has very different implications for your life and you need to figure out if your desired life and your desired entrepreneurial trajectory are compatible. Are you are willing to tolerate the stress and risk that go with being a revolutionary? Are you prepared to put in long hours and hard work that go with being a growth entrepreneur? Are you happy to forgo business growth for control if choosing the lifestyle trajectory? Table 1 provides insight into important elements of each entrepreneurial trajectory. This table can be used to assess if your chosen trajectory is likely to align with your desired life path.

2. Assessing your skills and abilities

The second order of business is to assess if you have the knowledge and skills to execute within your desired trajectory. The knowledge and skills needed to run a lifestyle business are very different from those required to build and grow a revolutionary or growth business. Lifestyle entrepreneurs need basic business management skills accompanied by the specialist skills of the business they are building. Growth entrepreneurs need skills and knowledge related to strategy, marketing, operations and human resource management to be able to find and create new markets, and hire people to manage their business in those markets. Revolutionaries need to innovate and disrupt. They must have the charisma and vision to sell a crazy idea; then, they need to surround themselves with experts who can help make that vision a reality.

3. Assessing your current trajectory and jumping trajectories

The third order of business is to assess if the path you are currently on aligns with where you want to be and to make the necessary adjustments. By carefully interpreting the outcomes of the 10 by 10 exercise and assessing your knowledge and skills, you can ensure that there is alignment between your skill levels, your desired career outcomes and the entrepreneurial trajectory you are currently on.

If there is alignment, you need to strive to be as effective as you can within your chosen trajectory. If there is no alignment, you should identify what you need to change. Do you need to shift your trajectory or develop your knowledge and skills to create alignment? Developing knowledge and skills may require work experience in an industry, attending a business course or doing some deep reading and research. Changing your trajectory involves realigning expectations and taking on the risks and work practices that are associated with a new trajectory. If you want to move from lifestyle to growth or revolutionary, you may need to bring on new partners, spend time crafting a strategic plan to set goals for the business or invest in the skills of the people in the business to create a platform for growth. If you decide to scale down and transition to a lifestyle business, you may need to simplify things, scale back on the risk within the business and realign expectations and work habits.

Understand your needs

Two years ago I shared this framework with a friend of mine. At the time he was trying to create a high growth organisation in the medical supplies industry. He had hired a number of sales and operations people, he was endlessly looking for new markets, new channels and new suppliers, yet he constantly came up against roadblocks. Early one morning as we were driving out to a triathlon together, we chatted about some of these challenges. I asked him what he really wanted from the business he was creating. After some thought he said that he was trying to create an organisation in which he would be in control and through which he would be able to make a good living and provide for his family.

Through this discussion, he realised that he had not properly thought about what kind of organisation he was trying to create and whether that would align with the life he desired. It dawned on him that the only reason that he was pushing so hard to grow his business was because “that is what is expected if you get an MBA.” Over the past two years he has scaled back his operation, reduced the amount of debt in the business, cut the payroll and changed his expectations. He is now taking home more money than before, he is less stressed and he gets to swim, bike or run much more than when he was pushing so hard for growth.

Aligning your deep personal desires with your entrepreneurial trajectory is one of the most valuable things that you can do to enable entrepreneurial success. Start now.

Greg Fisher, PhD, is an Assistant Professor in the Management & Entrepreneurship Department at the Kelley School of Business, Indiana University. He teaches courses on Strategy, Entrepreneurship, and Turnaround Management. He has a PhD in Strategy and Entrepreneurship from the Foster School of Business at the University of Washington in Seattle and an MBA from the Gordon Institute of Business Science (GIBS). He is also a visiting lecturer at GIBS.

Advertisement
1 Comment

1 Comment

  1. HUBERT WERE

    Apr 26, 2013 at 21:31

    Great work Mr. Greg. i found your article very interesting and i hope to implement what you have advised me. I have a business that is not doing very well. I now have an answer with me. Thank you

You must be logged in to post a comment Login

Leave a Reply

Performance & Growth

Why Growth Could Be The Worst Thing To Happen To Your Business

Focus on the next customer and the next level will take care of itself.

Paul Jarvis

Published

on

growing-a-business

We’re constantly fed this idea that if our business isn’t growing, it’s failing. Fortunately, like anything in business, one rule doesn’t always apply.

This is where business advice and reputable studies differ. Rapid or unchecked growth can end up being the downfall of a business, instead of its guiding light. It’s not that growth is bad or should be avoided at all costs, it’s just that it should be questioned before proceeding.

Growing our businesses could be the worst decision we make for the longevity of them. Let’s look at five reasons why growth may not make sense for our companies.

1. Resilience

As Dean Becker, CEO of Adaptiv Learning Systems, told me, the amount of resilience a person has is the most important part of their ability to succeed – and accounts for more than even their training, education or experience.

Luckily, our ability to be resilient is not just an innate trait we’re either born with or not. Being resilient requires that we focus on and work towards developing three traits:

  1. Having a greater sense of purpose for why we’re doing what we’re doing, even if things go wrong or aren’t currently working out.
  2. Recognising that we cannot control everything, and recognising accepting reality for what it is – something we can steer but not fully be command of at all times.
  3. Developing an ability to adapt as things change, so we can pivot with differences in the market, in customer requests and shifts in technology.

Being resilient as a business is much harder for a large organisation because there are simply too many resources at play, too many moving parts and too many shareholders making decisions to move quickly enough to adapt.

Smaller businesses, at their core, have less resources, less moving parts and less decisions makers, and can therefore be nimble enough to move with changes that could negatively affect a company.

Related: 3 Strategies For Growing Your Online Business Fast

2. Autonomy

Companies of one are becoming more popular because people want more control and autonomy in their lives, especially when it comes to their careers. This is why so many people are choosing this path: staying small (or even working for ourselves) lets us control our own life and job.

Smaller companies also set up Results-Only Work Environments (ROWEs), in which employees don’t have set schedules, all meetings are optional, and it’s entirely up to employees how they spend their time working. They can choose to work from home, they can work from 2:00 AM to 6:00 AM if it suits them, and they can sculpt their job however they want, as long as the results benefit the company as a whole. Cali Ressler and Jody Thompson have defined and then studied ROWE implementations for more than a decade, and they found that in these kinds of autonomous environments, productivity goes up, employee satisfaction goes up, and turnover goes down.

3. Speed

Companies like Basecamp have a four-day workweek during the summer (no work on Fridays) because it helps them prioritise what’s important to work on and what they can let go of. The key for their employees is to figure out how to work smarter to accomplish tasks with the time they’ve got, not just harder. Smaller companies are afforded the same opportunity. We can question our systems, processes and structure to become more efficient and to achieve more with the same number of employees and in less time.

Speed is not merely about working faster. It’s about figuring out the best way to accomplish a task with new and efficient methods. This is the concept at work in the ROWE method: Employees no longer have to work a set amount of time, but are rewarded when they finish their tasks faster. By being smarter at getting more work done faster, we can create a more flexible schedule that fits work into our life in better ways.

Another aspect of speed in a company that questions growth is the ability to pivot quickly when a customer base or market change. As a solo worker or small company, this can be much easier to do, because we have less infrastructure to cut through.

4. Simplicity

Typically, as companies gain success or traction, they grow by taking on additional complexities. These complexities can often detract from a business’s original or primary focus, resulting in more costs and the investment of more time and money.

For a company at any size, simple rules, meaning simple processes and simple solutions typically win. Adding complexity is almost always well intentioned, especially at large corporations, where, as complicated processes are added to other complicated processes and systems, accomplishing any task requires more and more work on the job and not toward finishing the task itself. It can be a slippery slope. One step is added to a process without increasing its complexity too much, but then, after a few years of adding steps here and there, a task that once took a handful of steps now requires sign-off by six department heads, a legal review and a dozen or more meetings with stakeholders.

5. Durability

The current business paradigm teaches us that to make a lot of money or to achieve lasting success, we need to scale our businesses – as if larger businesses are less prone to fail or to become unprofitable. Before our imagined businesses are even off the ground, we need to create them with the sole purpose of growth – and possibly eventual sale for a huge profit. This paradigm, however, isn’t rooted in truth, nor does it hold up against critical investigation.

Although contrary to most popular business advice, growth as a main goal or performance metric can actually be quite dangerous to the long-term operation of a business. In 2012, researchers from the Startup Genome Project looked at data from more than 3,200 high growth startups and found that more than 70 percent scaled prematurely through rapid growth and ended up failing – closing shop, selling off the business for cheap or having massive layoffs – because of it. The findings in this study where echoed in a similar study done by the Kauffman Foundation, where they found that 5 to 8 years after starting, more than two-thirds of high growth companies had to shut down due to the same reasons as the first study.

Related: How to Grow a Small Business into a Big Business

With these reasons in place, it may make sense to not grow and instead focus on where our business can do things better – instead of just in a bigger way. Let’s start to consider the idea that perhaps the byproduct of business success isn’t always growth and scale, maybe it’s just being able to have the freedom to make decisions that are best suited for the longevity of our business, the happiness of our customers and what makes the most sense to improving our bottom line.

Staying small doesn’t have to be a stepping-stone to something else, or the result of a business failure – rather, it can be an end goal or a smart long-term strategy. For businesses that question growth using the Company of One mindset, instead of assuming growth is always beneficial, we can think about what we can do to make our businesses better instead of just bigger.

This article was originally posted here on Entrepreneur.com.

Continue Reading

Performance & Growth

Local Study Reveals Formalized Boards Drive Growth

Sirdar Group study outlines the key elements of high performance boards in South Africa driving SME growth.

Nadine Todd

Published

on

carl-bates

One of the key differentiators between high-growth companies and listed businesses, and SMEs that do not grow beyond a certain ceiling, is whether or not the business has a formalized board structure in place.

Sirdar Group, Africa’s leading educator, appointer and guide to high-performance boards of privately-held companies and family businesses, has long held the belief that in order to truly scale, businesses need high-performance boards.

A new study conducted by Sirdar Group has focused on the value that high-performance boards offer companies in a bid to encourage SMEs and family-run businesses to follow best-practice in order to realise their growth potential.

Carl Bates, founder and CEO of Sirdar Group unpacks the key lessons from the study, and how SMEs can use these to drive growth.

1. What value do independent directors bring to boards? Why is this particularly important for privately-held companies and family businesses?

Ensuring you have an independent board member on your board is tantamount to ensuring your company makes use of an independent auditor. It’s imperative to have an independent perspective of the current performance, strategic direction and operational strategies of the business, not one that could be swayed by power, being a family member, job status or seniority on the board.

Let’s define what independent means in this scenario. An independent board member is not a director, shareholder, or employee, nor do they have any capital invested in the business. They are essentially paid consultants that are intellectually involved in the success and growth of the business.

Based on our recent survey, statistically it is shown that boards that comprise of at least one independent board member outperform those that do not have any. It therefore goes without saying that the more independent board members on a board, the higher the impact the board will have on the company performance.

When asked about the various directors and the value they add to the board, Independent Board Members were the least likely to be removed as the contribution they add is vital. Along with higher performance, the survey showed that boards with Independent Board members are more likely to implement a performance evaluation process, which is strongly recommended in most African governance codes.

2. Boards with independent directors are more likely to result in improved business results. Why is this the case?

Boards with independent directors tend to be those who have embraced the value of a third-party independent perspective. Whether they be family-owned or privately-held, they recognize the fact that they hold a shareholding in the company does not mean they have all the answers.

In turn, independent directors tend to have engaged in understanding what a high-performance board is, more so than where the only directors are also shareholders (and therefore not independent). Independent directors therefore understand the value of self-evaluation and taking time to consider how the board is actually performing.

The old adage ‘you manage what you measure’ comes to mind here. If a board is not measuring its own performance, what is its driver to improve? An annual board evaluation ensures this focus on a board being, as we would say at the Sirdar Group, ‘exceptionally critical’ of its own performance.

3. Do strong performing boards lead to businesses that perform well? Why?

Both the research and our own anecdotal evidence suggests that businesses with high-performance boards performance better. Internationally, the research also reinforces this. First, it is about understanding that a high-performance board is not one that is driven by compliance to codes and standards, it is one driven by ensuring increased performance for shareholders and other stakeholders. An effective methodology enables this to happen.

The reason businesses with a high-performance board perform better, in our view, is because they are being truly challenged by an independent party about the performance of the company. People who are removed enough to stay objective, yet involved enough to understand the business and its true indicators of performance, can add huge value to high-level strategic discussions and decisions.

4. Why did you conduct research into non-listed African board practices, particularly relating to privately-held company and family business board fees?

Remuneration and performance of boards of directors has been the subject of extensive conceptualisation and empirical research over many years. Internationally, most of this research has dealt with European and American-based companies. Alternatively, and particularly in Africa, it has focused on listed companies and public entities. We decided to fill this gap. Specifically, we want to support the achievement of meaningful economic impact by companies across the continent by supporting their ability to have truly high-performance boards. This research is one aspect of enabling this to happen.

Continue Reading

Performance & Growth

How Matt Brown Quadrupled His Business By Becoming A Niche Player

Matt Brown turned down a high-six figure deal the week he made the decision to become a niche player in his industry. Here’s why you need to learn to say no if you really want to grow.

Nadine Todd

Published

on

matt-brown-digital-kungfu

Vital stats

  • Player: Matt Brown
  • Company: Digital Kungfu
  • What they do: Storytelling production company for tech businesses
  • Launched: 2015
  • Visit: digitalkungfu.co.za

In today’s highly competitive B2B landscape, growing market share requires a business to be a low-cost provider, the differentiated option, or operating in a niche market.

For many businesses, low-cost is not an option, either because it’s difficult to maintain value while driving price down, or because if you’re selling on price, you will always lose to a provider who comes in at a lower price point. It’s a race to the bottom.

You therefore need to differentiate or dominate a niche. Matt Brown, founder of Digital Kungfu, a storytelling production company, has focused on doing both. The business is focusing exclusively on helping tech companies with their marketing needs. The week Matt and his team made this decision, they needed to turn down a high six-figure deal with a company that didn’t align with their chosen niche target market. It was a painful decision, but it’s paid off. Within six months Digital Kungfu had quadrupled in size.

Entrepreneur chatted to Matt about making the decision to become a niche player, knowing when to say no, and the art of developing differentiated products.

1. What is the business case for focusing on a niche instead of a broader – but bigger – market?

You can’t be everything to everyone. If you try, you’ll just end up being invisible anyway. Take the Cloud services space for example. There are thousands of software resellers offering similar (or even the same) products to SMEs. Everyone is flooding the market with competing messages, trying to show their target audience the value of their product or service, and why customers should buy from them instead of their competitors.

The only way to combat this flood of information that your customers are receiving – and to differentiate yourself – is through positioning. Positioning is all about framing your scarcity and dictating your value.

People want to know that you understand their pain. It builds trust. Focusing on one sector helps you to become laser-focused on the problems that players in that sector face. When you become a niche provider, you’re immersed in your customer’s industry, needs, problems and solutions. You understand their problem best, and they accredit you with the solution.

2. Why does saying no to some things open new opportunities in others?

For three years Digital Kungfu was positioned as a storytelling production company for any client who wanted help telling their brand or product stories to their customers. When we looked at our client base though, we realised that over 90% of our portfolio was technology companies.

There was clearly something we were doing that aligned with technology clients, but we hadn’t made the decision to focus exclusively on this sector, which meant we were still trying to be everything to everybody. Our messaging and product offerings weren’t clear as a result.

The realisation that we were predominantly focused on tech companies made us step back and evaluate why. What made us different in this space? We started asking the companies we worked with and discovered that it was our agile approach to delivering branded content solutions that was really resonating with them. Our storytelling, branded content and agile marketing approach aligns extremely well with the way tech companies work. We’re fast, we’re affordable and we’re effective. In the technology space, speed is everything. Once I understood that, it made sense to focus all of our energy on this one sector. Yes, it means saying no to a lot of other sectors, but it also opens the opportunity to dominate this sector.

We made the decision that if we can’t own a market or an idea, we won’t do it. By focusing on tech clients, we’re becoming intimately involved in their business challenges, needs, language and how the sector as a whole works. That expertise is driving better solutions and engagement from our side, which only serves to add greater value to our clients.

3. You had to turn down a six-figure deal once you made this decision. How did you do it?

It wasn’t easy. Saying no to money when that is what your business does is incredibly difficult. Within a week of making the decision to niche down, we had to turn down a high six-figure deal with South Africa’s largest SME investment fund. We knew that if we didn’t make that choice however, that we would never be able to focus on our chosen niche. We wanted to go after a much bigger pie, and that begins with the right focus. It’s not what you say yes to that makes your business grow – in many cases it’s what you say no to.

4. Was there any lesson or advice that influenced the decision to become a niche player?

The book Play Bigger by Christopher Lockhead has been instrumental in shaping the way we approach category design thinking for our technology clients. I realised that we were utilising this methodology for our clients, but we weren’t following it ourselves at Digital Kungfu.

The theory behind category design is that companies that own their categories (the Category Kings), don’t sell better than their competitors – they sell different by introducing the world to a new category of product or service.

Uber, Amazon Web Services (AWS) and Salesforce all did this. They own the markets that they play in because they marketed a different problem that the market didn’t know it had yet and when they did, they were accredited with the solution to the problem. They then gobbled up all the economics in their category, instead of feeding off the scraps of available market potential. To put this in perspective, Uber is valued at $120 billion, an eight times high valuation than their nearest competitor, Lyft which is valued at $15 billion.

I was already a big believer in this methodology; we just needed to implement it in our own business model and strategy. By focusing exclusively on a category, defining its problems and delivering a solution that is tailor-made for technology companies specifically, we are aiming to own the economics in our market.

I’ve received validation for our strategy from Christopher himself, who I interviewed on the Matt Brown Show. He literally wrote the book (Niche Down) about how to become legendary by being different. Most of us are tricked into believing that achieving personal and professional success means fitting in. What it really takes is the courage to stand out.

Choosing to become a niche player can be daunting – particularly if you’re an entrepreneurial business that has always said yes to everything – but when you become the niche player, you also become the expert in your category, and that will drive growth.

Inside B2B Lead Generation 2019 is a white paper and interactive webinar researched and produced by Digital Kungfu, a purpose-built lead generation company for tech businesses.

Continue Reading
Advertisement

SPOTLIGHT

Advertisement

Recent Posts

Follow Us

Entrepreneur-Newsletters
*
We respect your privacy. 
* indicates required.
Advertisement

Trending