One of the biggest problems that I keep coming back to is that people start their businesses for the sole purpose of earning a lot of money. Now you may say Denis, what are you talking about? Of course, if we start a start-up, we are in it for the money. That is true. To some extent yes. But it is not everything we are in it for.
So let me give you an example of a few people I’ve worked with over the last few years. The first one was a guy, and everything came down to revenue maximization. Which is another way of saying how can I get as much money out of my customers as quickly as possible. He had a good product to start with. But then everybody got nickeled and dimed nickeled and dimed the staff got nickelled. The supplies got nickeled and died. Nobody wanted to work for him. It got harder and harder to keep and maintain relationships. As a result, his business lasted for 17-18 months I believe.
On the other hand, faith inspires some businesses; that is Christians or Muslims wanting to change the world, that God is calling them to devout themselves for the betterment of the world. Their religion gives them a different perspective of seeing and doing things, their faith enables them to create an effective startup that not only generates a lot of money but also creates value for the people, their customers. Their biggest selling point is that they create value for the customers, keep them first, make them the priority.
There is a huge quantitative difference between companies like these where people have got a very strong cultural rock they have got some belief that tells them these are the right things to do. Yes, we need to treat our customers well. We need to make a difference, we want to create good change in the world. While other people say, okay the final arbiter is done. We make money, selling kidneys of kidnapped kids is legal bingo let’s go out and do it. If it’s not illegal, we’ll do it. If it is legal but might not be ethical, we’ll still do it because it’s going to make money.
That is the difference between, say a company like Enron. Enron’s main focus was always money. They led to endemic corruption throughout the organization with massive ethical problems. Whereas companies like Cadburys or other quaker-driven organizations in the UK and North America that said, right we’re here for our customers, first our employees second, and then our shareholders and ourselves third. They believe the fundamental belief is we must do an amazing job for our customers. We do an amazing job that comes first we create value, and then everything else carries on.
Let me give another example. I was talking to a banker this afternoon. One of Asia’s large banks and he was saying we were very conservative and especially with the recession we’re becoming even more conservative. So I saw straight away quick as a spot I saw a quoted mark twain back at here, and he said well, a banker is somebody who lends you an umbrella when it’s sunny and when it rains they want it back. I said fundamentally, what you’re doing here by having a money returns-focused approach on your business.
You’re turning every interaction with a customer into a transaction. What separates every other bank is that they don’t treat their customers as transactions, but actual humans they are loyal to. That is why I have been with a bank for 30 plus years. When a bank starts to look at the financial benefits rather than consumer benefits, that’s when they start declining.
What has this all got to do with startups isn’t this a little bit picture. Well, no really, because when you’re starting a startup, you’ve got to have the idea to start with everything at a customer’s end. And yes, it’s way before vision and values and mission statements. You don’t even really have to sort of say it that much out loud. It must be clear about what’s important to you.
Everyone should be spending a few minutes right at the beginning of their startup. You will come back to this, again and again, spend 30 minutes writing down what your core cultural values are. What you believe. You don’t need to turn it into bullet points just yet, but set a goal and then know where it is going forward because what this does is once you’ve got this place where you can stand it, then has an impact on everything else that you do as you go along. Think about and figure out what your customers want. Understand them, empathize with them and make a difference in their lives. But, don’t forget your culture because that also makes a difference.
Watch me talk more about it here:
