By Glen Hellman, Dingman Center board member and angel investor from his blog Forward Thinking
Creating a startup is often compared to building an airplane in real-time while in flight. It isn’t easy. There are so many things that can go wrong; so many different ways to make it work or sink that ship.
In my experience, there are 3 critical attributes common in great companies that will not only improve the odds of making a safe landing, but make it more enjoyable and profitable. The first two involve developing a strong foundation and the third involves setting a destination.
1. Value Axis
Pick your value axis. According to Michael Treacy and Fred Wiesema in their book The Discipline of Market Leaders, companies compete on 3 axes. Think about the following three companies that basically sell the same product yet they all compete and deliver that product on a different axis. The axes are:
- Operational Excellence – You can buy sneakers at Wal-Mart, and they compete for your business based on a well-oiled logistical system that insures they have the right product at the right price in the right place at the right time. Customers know they will find the products they want at a good price and expect few surprises during the shopping experience.
- Product Leadership – Hanging your hat on innovation. You can buy those same sneakers at Amazon.com, not leave your home, and have them delivered. Amazon, started as a book seller, branched out to virtually competing against almost all brick-and-mortar operations and has evolved into a premiere technology innovator where retail is only a small part of their overall product offering.
- Customer Intimacy – Knowing and taking care of your customer like no one else. When you buy your sneakers at Nordstrom, you know that the sales person will take good care of you and even if you bring the product back a year later without a receipt they will accept the return.
Companies need to compete adequately in all three axes yet you can’t be best in all three. You’ve got to pick the axis in which you will hang your hat.
2. Core Values
What are the 3 or 5? Hire people who personify them. Review and reward people who adhere to them. It’s easier to create a culture from the start so think about those core values and be intentional about creating a culture around them (See: 5 Signs Your Core Values Are Rotten to the Core).
Some Core Values to Think About:
- Customer Centric
- Work Hard/Play Hard
- What Ever It Takes
3. Pick a Destination
Now that you know who you are and what you stand for, it’s time to pick what you want to be when you grow up? Are you building for a quick flip? Do you want to sell, go IPO, create something that is disruptive, change the world, have an impact? What’s your time frame? What’s your number? What’s your target?
It’s important to have a target to judge your progress, create goals, and drive the organization (more on this in Three If’s From a Maybe: Just-In-Time Strategic Planning).
Your destination, the understanding of the target combined with your value axis and core values creates an environment for your team to work independently, be creative, for your company to be nimble and excel.
Spending more time on foundation and target will free up your time from developing rules, procedures, and micro management.
Do you have a clear vision of these 3 operating imperatives? What are you waiting for? Go do it. Get them done.
Glen Hellman helps exceptional entrepreneurs figure out what to do and gets them to do it. He’s an angel investor, serial entrepreneur, and has worked for venture capitalists as a turn-around specialist. He’s a principal at Driven Forward, board member at The University of Maryland’s Dingman Center for Entrepreneurship, a Vistage coach and a mentor at the Founder Institute which is a good excuse but not the reason he is such a horrible hockey player.