I get asked for business advice a lot. It comes with the territory when you’ve created companies that have earned hundreds of millions of dollars. I’m not complaining. In fact, I do enjoy helping people out with their business ventures by imparting a bit of hard-earned wisdom. One of the things I tend to notice is that the questions I receive often miss the mark of what I think is important in business. People tend to focus on details that are only really important after you’ve found success, rather than building that success, to begin with. To help illustrate this, I want to give the example of my new vehicle history venture and show how it can be used as a model for other business ideas.
Power of the internet
It’s no secret that the internet is a powerful component of modern business. If you know my story then you know that the use of the internet has figured heavily into my businesses over the years. My early efforts in targeted marketing helped to capitalize on the technology’s ability to tailor buying suggestions to people based on what they’d likely find interesting. Lots of people do it today, but when I first started it was somewhat of a revolutionary advance in the field.
So, that begs the question as to why the internet is so powerful for jumpstarting modern businesses? Well, if you think of business as a problem-solving endeavor at its core, then we can better understand how the internet helps carry out those goals. By connecting to unprecedented amounts of people and accessing huge amounts of data, modern companies can tap into the problem-solving capabilities of business better than ever before. In other words, more connections and more information equal a better ability to solve problems which in turn creates more successful businesses.
Central problem identification
With that in mind, we can begin to think about how some entrepreneurs fail in their endeavors. Rather than fixing a laser focus on how they can solve problems for potential customers, they’re often more inclined to play with the bells and whistles of their product or marketing campaigns. Bells and whistles are fun. Marketing is key. But if the pursuit of these goals gets in the way of your central value proposition, you’re likely to be in trouble.
To take the example of my new vehicle history endeavor, the central problem we’re solving is that customers want free information that can help inform their buying choices when purchasing a new car. The more information we can get into the hands of our customers, the better able we are to solve that problem. If we spend too much time focusing on, say, the look of our site without first getting that information to customers, our risk for failure goes up.
Revenue stream
Of course, since we’re offering our vehicle reports for free, the question can be asked as to how we make money. This points to the second key issue that I see with many modern businesses. Some companies, especially those whose products exist primarily on the internet, become so focused on solving problems that they neglect to figure out a reliable revenue stream. Solving problems is important, but if your company goes out of business because it can’t make money, then you’re not going to be solving many problems at all.
To address this issue, I’ve gotten a lot of mileage out of turning to existing successful business models and seeing how I can emulate them. In this case, I’ve worked to emulate the model put forth by free credit report providers. I’ve long admired how these providers have been able to serve customers by giving them access to free information and then supporting the venture through sponsorship and advertising. In the same way, we seek to provide free vehicle reports to our customers supported by advertising and sponsors within the auto industry.
Consider the big picture
Once you’ve got your ability to solve problems and develop a revenue stream figured out, you’re well on your way to finding success with a business. At this point, one final thing I’d highlight is the need to maintain your focus on the big picture of your business. This can help enable long-term growth and allow you to shift your offerings and structure as needed. Lose sight of that larger vision and you may lose what it is that makes your venture special in the first place.
That’s a snapshot of the wisdom I tend to offer novice business professionals who seek me out. It may seem simple in concept, but I promise you the complications can easily come when trying to put it into practice. It may be worthwhile to take a long hard look at your business venture and see how you’re satisfying each of these points en route to eventual large-scale success. If you’re falling short in one of these areas, it may be time for a change.
