Get the Business Frame Right!
Lots of start-ups come with an “idea” to be developed into a Business Model. The model describes the opportunity, the solution and a way to generate revenue from the customer. Almost all folded up within the first couple of years. Why? Most failed because of a lack of demand or they never did get the “right” product going. Either way, they ran out of money and were not able to raise more.
How did Microsoft, Amazon, Google, Facebook get it right? In our research, we found two reasons for their success:
The founders built on their competence and capability
The business remained flexible, adapted and grew with the market.
The founders start with specific competencies, an idea of where demand would come from, a lot of haziness about who and how much customers will pay – none had the complete picture. Founders acknowledged the need to acquire skills and competencies as they evolved. Bill Gates from Microsoft called on his college friend Steve Ballmer who had big-business experience with Proctor & Gamble.
What about the vision? Typically, the founder has a fuzzy idea of how the company will evolve, but there are so many moving parts that it the model needs to stay fluid. Take the case of Larry Page, who was a 22-year old grad-student at Stanford. His vision was that the entire Web could be downloaded and presented in an entirely new way. What Page wrote down that night became the basis for an algorithm, he called “PageRank”. The rest, as they say, is history! You will note that clarity of the vision comes later, with the benefit of success and hindsight.
The combination of a general direction, with competence and a conviction to continue developing new solutions, is critical for success. New people, new technologies and time will be required to be successful in your journey – either as an entrepreneur or a company seeking to stay relevant in the VUCA world.
Your Leadership team needs to have an Entrepreneurial mindset, who collectively put together and articulate your Business Frame; “A broadly defined frame that brings together hitherto unconnected capabilities, talents, and opportunities, at the right time, to form the foundation of an enterprise’s exponential growth.”
“A chance encounter, a stray conversation. An article you read which somehow stays with you. These are the unexpected turns on the journey of life. Which lead to a destination.” – Rashmi Bansal, Author, Connect the Dots