Four Simple Steps to Grow Your Small Business

A few weeks ago I gave to an invited talk at the Workshop of Data Science and Artificial Intelligence Challenges and Applications hosted by the D. Y. Patil College of Engineering Akurdi Pune. The Facebook live stream featured a number of fantastic speakers and reached over 21k engineering students and attendees from multiple colleges. My purpose was not to go in-depth on technical topics, rather the opposite. I was asked to speak to the technically-oriented crowd about gaining a better perspective on how to bring their ideas to the marketplace.

At the conference, I gave the talk a much more boring title, something regarding aligning technology and business. However, I believe the ideas are applicable to a wide array of businesses, thus here I share with you the primary content. So here are the four steps.

Find a Subject Area You Are Passionate About

According to a study by Gettysburg College, the average person spends 90,000 hours of their life at work. This is a staggering number and a good reminder that we should all find something we are passionate about to pursue as our career. Not everyone can be so fortunate to do so, I understand, but if you are able, there are so many benefits both personally and professionally.

Of course you need to balance your interests with economics but what better place to start than something you are highly motivated to work on. I want to call out one key benefit here which is authenticity. If you are passionate about your work, it will show. Your customers will quickly notice this and it will help build trust. They can spot a fake a mile away.

Photo by Mikhail Rakityanskly

The pandemic has forced a lot of people to reevaluate what their interests include, and I was no exception. Having worked at Amazon close to 5 years, I realized that what I really enjoyed doing was different than it was previously. What truly motivated me was communications. Technology was still a focal point, but the combination of the two was the driving factor. It was time to make a change, and I haven't looked back since.

Be Customer-Driven

Now that you found your topic area, identify a problem that customers have in this field. There are two basic models to starting a business, roughly equivalent to the top-down and bottom-up approaches. You can either find a customer problem and solve it. Or you can come up with really cool solutions and then seek out customers willing to pay for that solution or service. It's not a one-size-fits-all, but if you are a small business owner or are risk-averse, solving a customer problem from the beginning can be more appealing.

Amazon uses the approach of "working backwards" from the customer, described here by a product manager at AWS. But the idea goes all the way back to the very beginning. Amazon started in the mid-90s selling books online. In 1998, the second product sold by Amazon online was music. However, even at this time, Jeff Bezos discussed how the goal of Amazon was to help customers find products they needed or wanted to buy. "We're not limited to selling our own stuff," he said.

This is amazing when you think about it. The vision, foresight, and relentless customer focus has helped Amazon become the success that it is. A major reflection of that customer vision is the growth of third-party sales. As of 2017, third-party sellers accounted for more than half of the retail sales on Amazon. Of course Amazon makes revenue on these transactions, but it is the customer who really wins in this case. Even Earth's biggest store leverages a marketplace that includes other sellers to make sure that customers are able to find the things that they need.

Keep in mind as you consider your business plans, your customer is not always the end consumer. Consider an example where we develop a medical chatbot. This chatbot's purpose is to keep workers from being alone and isolated during work-from-home situations, and it is also can diagnose and help provide basic remediation if it identifies signs of depression. In today's pandemic and always, mental health concerns are something we should be on guard for and attempt to catch early. There are multiple ways to provide this service as shown in the diagram below.

In the column on the left, there isn't much of a value chain as we provide the entire service. However, this requires us to build the technology but also market it to customers, manage onboarding, and perform a number of tasks for which we may not be skilled or interested in doing.

In the middle column, we partner with a medical group or organization. Now we are a technology supplier to them and we are better able to focus on our core value proposition. The medical group is now our primary customer. They have the existing customer base and can provide guidance on remediation steps and other knowledge we should include in our product.

Finally on the right-hand column, we decide that hosting and infrastructure are really commodities from our business perspective. Instead of dealing with that ourselves, we partner with a cloud provider such as AWS so that we can focus on the artificial intelligence and machine learning models that are at the foundation of how the chatbot decides to interact with its users and identify signs of depression. We are now a component supplier in the overall value chain. One could argue we are taking on much less risk in these scenarios as we move farther to the right. There is the balance of risk vs. reward to consider, but if we have chosen our partners wisely, we likely have improved our chances of success.

The main point here is to know who your customer is, because you may have more types of customers than you think. In our example above, Amazon has two different customers: end consumers and third-party sellers. They solve a different problem for each of them yet remain consistent to the overarching vision. Third party sellers often don't have the technology capability, visibility, or logistics capabilities that Amazon does and so this problem is solved for them.

Don't OMIT the One Most Important Thing

Eliminate distractions and focus on what is important. This is so important these days as there are so many things that fight to get our attention. It is through relentless pursuit of our vision and solving the customer's problem that we are able to achieve our goals and excel in our field. Solve the problem initially and get it in the hands of customers. Then focus on feedback and iterate until you are one of, if not, the best at helping your customer solve that problem.

The Pareto Principle says that 80% of the results typically come from 20% of the effort. Generally known as the 80/20 rule, this ends up being true in remarkably so many fields. Tax revenue against the base of constituents, software bugs in hotspots within the code, and project management are but a few examples. Apply this then to your own business.

If 20% of your time is generating the vast majority of the results, how much more efficient and productive can you be if you maintain your focus on that 20%. Each day ask yourself what is the most important thing I can do today to further our progress and achieve our goals. I will tackle time management in another article, it is a science (or perhaps an art) all unto itself. In general, however, focus on what is important and don't hesitate to put off what is not.

Launch and Adjust

One piece of advice I gave to the students is widely applicable and in my opinion, beneficial for many of us to keep in mind. That is the following:

  • Don't be afraid to fail

  • Don't be afraid to change your mind based on the data

Photo by Mikhail Rakityanskly

In so many fields, it is only through the journey that you figure out what your true destination will be. You must always consider the facts at hand. Capture and use as many metrics as you can to determine what is working and what is not. This must be balanced against your relentless pursuit of the end vision. It may be the path you chose that needs to change, or simply the method used to get there that needs to be reconsidered. This is where your business sense comes in, and inflection points are reached that require deep analysis. It's what makes business a challenge and fun.

For the students of artificial intelligence and data science, being adaptable is incredibly important. Who nows what your models trained from vast amounts of data will come up with. For those of us not in these technical fields, for better or worse, life itself is also like this. You can never sure the outcome. Even the best ideas and technologies don't make it sometimes (think Beta over VHS), and sometimes timing is everything. A solid-but-not-great technology with the right marketing and customer experience can win the day (I'll let you choose an example on this one.)

In summary then, find your passion and go relentlessly solve a problem that customers have in this space. Don't be afraid to fail or to change your course based on what you learn. Adjust as needed but keep your eye on the end goal and focus on the vision. I can't wait to see what you all achieve!

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