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The cold hard truth is , when you start a business, on the Net or off, you never know what’s going to sell and what isn’t until the market tells you, so be prepared to listen.
In The Risk of Assuming the Market wants “A”, when it Really wants “B” – The Entrepreneurial Mind, Jeff Cornwall describes the process:
We enter the market with a plan in hand. It is a plan that we may have agonized over for weeks, months, or even years. We have done our research, created a carefully thought out marketing plan and operating plan that both help justify our financial forecasts.
And then a funny thing happens. We assumed that the market wanted “A”. But, if we listen carefully, we often find out that it really wants “B.”
That’s the critical juncture at which we have to not only listen to the market but act on what it tells us. In many cases, it may just require moving the spotlight from one corner of your display window to another, showcasing a different aspect of what you’ve proven you can do and for which you are recognized. The trick is to look very carefully at what your expertise really is and move in that direction, not away from it.
From the beginning, many successful web sites continued to morph their business models, searching for and migrating to just the right combo of ingredients to continue approaching success. Savvy web businesses who’ve adopted a process of continuous change thrive and prosper, keeping a step ahead of either the slow erosion of changing markets and business models or the savage and tornado-like devastation that sweeps periodically through the Net and elsewhere .
Google started with search and had to have a light bulb moment to connect it with advertising and roar on to commercial success. Ebay.com’s auction site was so successful, it took over Paypal.com, not a big leap since it was already supplying much of Paypal’s revenue through its transactions. It merely moved from making money off being in the middle of one type of transaction to another. Amazon.com started selling books moved into lawn chairs, jewelry books, groceries, and hundreds of other items, then stepped up to a new, possibly transformative model by developing and offering Kindle, it’s ebook reader which allows you to get a book with the click of a button.
An example of somewhat more extreme and for many years continuous morphing is that of Beyond.com. A business to consumer software site, Beyond.com in the late nineties, had already spent $125 million on a TV ad campaign to familiarize consumers with its software. When the business to consumer model seemed to flounder all across the Net, Beyond.com decided to ditch the model and move towards business to business. The question was how?
The answer for Beyond.com, provides a road map as to how a dot com which is either floundering, stalled, or stuck in the wrong business model, can become unstuck and get moving down the road again. Beyond.com took their dilemma to branding experts Barbara Zenz and Stephanie Paulson of The Stephenz Group currently ranked as/ the number one advertising agency in Silicon Valley The course they recommended to Beyond.com management consisted of four essential steps:
1. “Assess the company’s business model and understand where it is today. What is the vision and focus of the company?
2. Look at the brand it has already established…..and translate that into the appropriate message for a new market: the business customer.
3. Assess the audience. What are the business objectives and sales goals?
4. Then build the communications strategy.”
Beyond.com decided to leverage its existing knowledge and experience of selling online by targeting CEOs and executives of manufacturing companies who wanted an online presence to sell their products but didn’t want to undergo a long learning curve developing their storefronts. Instead of selling software, Beyond.com now used direct mail to sell their expertise to manufacturers touting the logic of outsourcing to “e-Stores by Beyond.com”. The pitch to businesses was “Why reinvent the wheel? Let Beyond.com build and manage your eStore for you.”
Beyond.com’s morphing continued. They went on to become what they describe as the world’s largest network of niche career communities, powering thousands of job sites, apparently with success.
Beyond.com recognized, at their core, they were essentially a technology and networking platform. They chose to sell their expertise and the use of their platform to different communities, first those who wanted store fronts, second, those who wanted job boards.
Of course, no direction is guaranteed to be the correct one or to prove profitable. The simple answer to “How to keep up in a demanding and continuously evolving environment ?” is that a business has to look deep inside itself, to know and understand its own culture and capabilities and decide for itself which business model it will be capable of fulfilling and which will bring it success. And, if one model doesn’t work, a business must try to conserve its cash to be able to reach for another. As ITT’s late, great manager, Harold Geneen, used to say: ” Once you understand a business problem, you must keep trying until you find a solution. If you try 47 times and fail 47 times, you must try the 48th time, and if necessary, the 49th and 50th time. You have no choice but to succeed.”
The other lesson to bear in mind, in these expensive Net times, the most critical and succinct business advice of all: “Never run out of cash”. If you do, they take you out of the game and then there is no further opportunity for change, and no possible redemption, except as a phoenix rising from the ashes, as a new business altogether, which is the ultimate change.
