Tag Archives: business model

Want to Build Your Business?

This is how it starts. In the beginning, the founder has an idea. This could be a hare-brained concept or even a hobby. (Some hobbies should stay hobbies.) But, the founder, not being able to resist, transforms the hobby into a business.

Admittedly, it is a little business, and who is doing all the work? The founder, of course. Is there work left over? There is always work left over.

So, the founder hires the first employees, mostly friends and family, because no one else will work for those paltry wages. And, what do these people do? A little bit of everything. The founder organizes the work around the people, asking what each employee (friend or family member) does well. “What do you do well?”

Indeed, there is some of that work to go around, and around. The work is organized around the people (scarce resources). Is there work left over? There is always work left over.

The strategic focus for this startup organization is all about sales. Without sales, this fragile organization dies. And, in the beginning, these don’t have to be profitable sales, because in the beginning, the founder puts all the expenses on a credit card, line of credit, whatever it takes to get the company off the ground.

This is proof of concept time. Is there a customer out there, anywhere, willing to buy our product or service, at any price. Why would a customer buy? There must be an angle, something unique. Oh, it must also be cheaper.

All of this requires energy and hard work. Success depends on it. The problem is, the just dessert for hard work is – more hard work.

The Source of Organizational Pain

Sometimes people on your team don’t fit. Culture is that unwritten set of rules that governs our required behavior in the work that we do together. Some people don’t fit. It doesn’t make them a bad person, they just don’t fit.

Some companies hire for culture, assuming the company can train the technical stuff. Some companies require the technical stuff assuming the candidate can adapt to the culture.

Organizational structure is the way we define the working relationships between each other. Organizational structure is culture.

Based on your product or service, your business model, what is the relationship your customer wants with your organization? The Discipline of Market Leaders documents three types of relationships (why customers buy from us).

  • Product Superiority (Quality)
  • Low Cost
  • Customer Intimacy

This narrative set the stage in 1995, and, now, there are more ways to define the customer relationship. (I would like to hear how you describe yours.)

Your customer relationship platform drives everything else, specifically your structure. It is the basis of your business model. When your organization structure (your unwritten set of rules) gets out of sync with your customer relationship, you will experience pain.