Advices to business starters
Publish Time: 2015-06-15 Origin: Site
This is an article from Fortune China
The first piece of advice the writer would give to anyone starting a new business is to forget everything they learned in business school.
It's a truth universally acknowledged that the fundamental goal of business is to create a hit product. You then sell as many units of that product, thereby spreading your fixed costs over as many units as you can, and you compete on margins. Well, in the writer's opinion that's all worthless, those days are gone.
If you are starting a new business today, it's highly doubtful that you are selling a physical product on a per unit basis. You are probably launching something online in order to deliver great services like instacart, BloomThat, Washio, or PostMates. This is because the world is shifing from selling prducts to selling subscriptions, and in the subscription economy, companies are focused on generating recurring revenue. So it's not about the price of the product and the margin. It's about delivering value to customers, so they don't want to switch services. But in order to manage this effectively, you are going to have to do five things, and answer one very important question.
Define subscriber metrics.
You are going to have to think about measuring annual and total contract values, payments and declines, monthly and annual recurring avenue, and relationship retention.Stuff they don't teach in Accounting 101.
Understanding your consumer
People now expect products to adapt to their specific needs. They expect ongoing value and unique experiences. And they are not as interested in methods as they are outcomes. Stuff they don't teach in marketing 101.
Personalize your services
The product economy is dead-products cant be personalized. A product cant learn your behaviors and preferences. A product can't be constantly upgraded, so that it gets better-instead, it becomes obsolete. Stuff they don't teach in Manufacturing 101
Customize access
People now define ownership as managing the decline of a physical asset. They are opting for access over ownership:ride shares, streaming services, and subscription boxes. Stuff they don't teach in Design 101.
Creat a great expreience
You have to create services that can learn and adapt based on behavior, Services that can improve themselves autonomously. Services that can be truly customized. There's no MBA class for that
And finally, the key question isn't 'what product can I sell" but rather "what do my customers really want, and how can I deliver that as an intuitive servce, rather than a stand-alone product?" Answer that question and you're on your way.
The first piece of advice the writer would give to anyone starting a new business is to forget everything they learned in business school.
It's a truth universally acknowledged that the fundamental goal of business is to create a hit product. You then sell as many units of that product, thereby spreading your fixed costs over as many units as you can, and you compete on margins. Well, in the writer's opinion that's all worthless, those days are gone.
If you are starting a new business today, it's highly doubtful that you are selling a physical product on a per unit basis. You are probably launching something online in order to deliver great services like instacart, BloomThat, Washio, or PostMates. This is because the world is shifing from selling prducts to selling subscriptions, and in the subscription economy, companies are focused on generating recurring revenue. So it's not about the price of the product and the margin. It's about delivering value to customers, so they don't want to switch services. But in order to manage this effectively, you are going to have to do five things, and answer one very important question.
Define subscriber metrics.
You are going to have to think about measuring annual and total contract values, payments and declines, monthly and annual recurring avenue, and relationship retention.Stuff they don't teach in Accounting 101.
Understanding your consumer
People now expect products to adapt to their specific needs. They expect ongoing value and unique experiences. And they are not as interested in methods as they are outcomes. Stuff they don't teach in marketing 101.
Personalize your services
The product economy is dead-products cant be personalized. A product cant learn your behaviors and preferences. A product can't be constantly upgraded, so that it gets better-instead, it becomes obsolete. Stuff they don't teach in Manufacturing 101
Customize access
People now define ownership as managing the decline of a physical asset. They are opting for access over ownership:ride shares, streaming services, and subscription boxes. Stuff they don't teach in Design 101.
Creat a great expreience
You have to create services that can learn and adapt based on behavior, Services that can improve themselves autonomously. Services that can be truly customized. There's no MBA class for that
And finally, the key question isn't 'what product can I sell" but rather "what do my customers really want, and how can I deliver that as an intuitive servce, rather than a stand-alone product?" Answer that question and you're on your way.