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What is your Core Business?

15.03.2010

“Do you want to sell sugar water for the rest of your life, or do you want to change the world?”— Steve Jobs, CEO Apple

I am a big fan of knowing what your company’s role in the marketplace is.  You can call this your Mission, Vision, USP (Unique Selling Point), Evangelist Role, Cult Mantra, or even your Entrepreneurial root story.  They are all variations on the same idea: your company exists to do something other than the dreary “increase shareholder value through retained profits” thing.  Now, hopefully you do increase shareholder value, but that is the byproduct of doing something else that is more fun and more meaningful.

Most of us want to change the world, but only some of us have discovered how we will do it.  When two people in the company agree on how they want to change the world, then you have the environment for real greatness in ways that bonus plans or supervision can never duplicate.

I work a lot with companies that are started by engineers.  In a recent BVIU conference in Vienna, fellow speaker Gabor Bojar talked about how his Hungarian 3D cad software company became a success by focusing on what could be done with their available desktop PCs.  He noted that in the early years, it was engineers wanting to impress other engineers and their way to change the world was measured by advances in technology.  He recounted how their second breakthrough happened about five years later when the teams saw that they were changing the world through the buildings that were being constructed using their products.   He thought this transition from the engineer-to-engineer based goals to an engineer-to-customer’s-based goals as so important yet so difficult that he is now using his own money to build a university that focuses on just such an idea.

Another related trend that I see is how people define their core business.  If you know why you exist, then it should be relatively easy to understand what you must do “in house” and what can be done by others (suppliers, partners and resellers).  In the early years of most computer industries, software development was their core capability.  They would allow partners and resellers to sell the product, install it, customize it, and do the front line product support.  The trend I now see is that most mature (yet still gaining momentum) technology companies are turning this around.  They recognize that profoundly knowing their customer is the the most important thing in defining their product lines.  They now want to do first level (first contact) support and are willing to outsource third level (bug fixes and patches to the code).  They personally want to see how customers use the product so that they can create the enhancements the customers need for their success.  As a result, these customer-oriented companies are now willing to subcontract coding and testing of the core product, activities they once believed were their core capabilities.

I never want to sell sugar water to children– yes, I could make more money and work with other successful people, but I am for changing the world and it looks like I am not alone.

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