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The secret to many entrepreneurs and investors

I have worked with and for many different companies, and one thing is for sure – companies are established to make money: top-line results, bottom-line results, and profits.

But hold on. Total money orientation is definitely not the model to follow if you want to build your start-up into a huge success. It can actually be the way to ruin any hope of success. When a company is all about revenue, revenue, revenue, profit, profit, profit and hard-number results, it can end up stealing the life and soul of its most important people.

Before you start bringing in investors’ capital and going after the hard numbers, make very sure you attend to the following crucial points. Failing to do so can mean a waste of all your hard work and efforts.

A. A sustainable and healthy economic platform

When you make your business run without any sort of subsidies, you learn very quickly what it takes to create cash flow, and what it takes to build up substantial cash flow. You can see first-hand what works and what doesn’t. This is a good, healthy starting point.

B. A healthy and passionate culture

When you have people working together in the same direction, toward a common goal, you win. If your people are being knocked down, interfered with or invalidated by an investor, the special spirit that should be present in any start-up can vanish.

C. Understand and accept that success should not be measured in numbers alone

Business success isn’t just about the numbers. Emotional success of the team ensures continued success, innovation and creation; all things that make your business thrive! Don’t focus just on the numbers of employees, the amount of revenue, etc. Numbers are important, but in the long run, success is found in the marriage of numbers and emotion. Sometimes gut feelings and a sense of higher purpose are more important than quick revenue you might drum up with a weekly newsletter, or by hard-selling existing customers to buy more by overplaying special offers all the time. (If you overdo “special,” the day will inevitably arrive when “special” is really just standard, in the customers’ eyes.)

D. Understand your product from a to z

Know what you’re actually selling. This may sound strange, but it’s not uncommon for an entrepreneur to be selling all sorts of things, all at once, without really understanding each one of them. They cannot focus, so they end up spraying out products and services like a fire hose – and they usually end up in a mess.

To understand your product to the fullest, you have to work with it day and night. And if you work long and hard enough, you will begin to understand it. This also means working on refining the product before doing a lot of work on optimizing customer flows.

Just keep improving the product until you can say to yourself, “This is definitely the best on the market; I can see it on our ratings, and feel it inside.”

In other words, it’s truly important that your heart and gut are on the very same track as the company’s vision and mission. Fully aligned. If you lose track of your company’s spirit and primary objectives, and begin to focus on money and profits alone, you lose something vital. You lose the Why for doing business at all, and the essence of what its offerings are or should be.

When you know all that – what you’re selling and why you’re selling it, and you manage operations well enough to reach acceptable numbers on the economic side of the picture, then you can begin to optimize the company itself, and its revenues, profits and growth.

I learned all this the hard way. I tried focusing on numbers, numbers, numbers, instead of on product and culture. At Slideshop.com, we reached a point where the only things the owners (including myself) cared about were revenue and profit. Meanwhile, we made these big mistakes:

1. Sending out too many email newsletters, trying to sell more and more and more

2. Putting more and more money into Google AdWords

3. Producing too many new products, with quality that just wasn’t adequate

4. Hiring people who were not truly, highly qualified and skilled at their jobs, willing and able to produce consistent, top-quality results – spanning from programmers to marketers.

I could keep on adding to that list, but what basically went wrong was putting the bulk of my attention on numbers, and neglecting the core business. Too much rational; too little emotion. To get on track again; I actually started firing people and cut the business to its bone. And it didn’t end there. We closed down the Danish office and moved it all to Indonesia to cut the most expensive costs: the designers. Today Slideshop. com is running and it works perfectly from both Indonesia and San Francisco.

And what are the consequences of forgetting your core business, and turning your focus too heavily to numbers? Here are a few:

1. Lost customers

2. Lost focus on the essentials

3. Forgetting what your business is really all about

4. Too many fixed costs (which you eventually can’t afford).

It might sound a little strange to a new entrepreneur, this idea of giving so much attention to the “softer” details, ahead of the money. But you’re at terrible risk if you don’t approach things that way.

It’s very rare that any succussful company can focus just on revenue and cash flow, while neglecting the essentials of products and their delivery – things like quality, customer satisfaction, great team, dynamics and new product development demand your attention.

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