Since the year 2000, I have been mentoring business owners regularly via Day 8 Business Academy, the social enterprise arm of Mansmith and Fielders Inc. dedicated to the micro, small and medium enterprises. One of the most often mistakes they make is supply side thinking.
Supply side thinking is the opposite of demand side thinking or being customer centric. Ask entrepreneurs why they entered a business and many will share ‘they know how to manufacture the product’, or ‘they are passionate about it’. The first is about core competency while the second is about personal preference, while both are important, they have a common major downside — it is dangerous to start strategy, whether corporate or entrepreneurial, from self instead of the marketplace.
Instead of asking for current assets or capabilities, business owners must expand their options. In Market-Driving Strategy of Mansmith, competency is only one of eight lenses to view options in the marketplace. It is about principle of selectivity at work.
Whenever I have time, I would accept invitations to be a judge in entrepreneurship competitions, among others. Only a minority would think of unmet needs and have product criteria before choosing and formulating their product and value proposition. Value creation, that of satisfying needs and wants better than competition, appears to be not in the consciousness of many. On the contrary, self orientation appears to be the norm. Self-orientation is when an entrepreneur pays attention to neither the customers nor the competitive frame available (direct competition plus indirect substitutes), but starts with personal passion– a common mistake. This lack of value creation consciousness will lead to inferior value capture or profitability, worst, the source of his/her business failures.
To align passion to customer centricity, ask existing top customers what they do not like about existing offering, ask target non-customers why they have not been a consumer and if they have any wish list, ask lapsed customers why they stopped using the product and what alternatives they have been using since. Most of the time, you will be surprised what these people are saying. Business owners must be hungry to get insights from their target market as well as their potential market.
The above questions are not just applicable to new product or service development but to existing operations as well. There is no substitute for preparation. Opportunities emanate from unmet needs and pain points of the existing top customers and target non-customers.
(Josiah will share and discuss with audience the ’10 Critical Questions Business Owners and their Partners Should Ask’ Please email email@example.com to know more details.)