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Why you should not not over-complicate business

3 Mins

Businesses don’t exist to test ideas; laboratories do that. They’re not there to stretch the boundaries of our imagination; leave that to books. In the end, business is about sales.

Lord Sugar got abused when he told businesses to stop moaning about bank lending and look after their own shop. But he was right, albeit his delivery was characteristically blunt.

Over the past decade, too many organisations have lost touch with this essential truth. As Harvard Business School guru Rosabeth Moss Kanter, puts it: “Who wants your product, why, and are you satisfying them?”

In the dot-com era, companies invented the “pre-revenue” business so they could spend venture capitalists’ money and didn’t have to sell stuff. Pre-credit crunch banks got out of serving customers by making their “products” so complex that no-one had a clue what they were buying, selling, or borrowing. The absence of an understood “contract” in the public sector means that customers like you and me are made to feel guilty about expecting decent service.

Thanks to the digital revolution, many of the things we used to charge lovely fees for (music, news, software, books, consultancy services etc) can now be acquired for free. For those companies still making “real” things like protective workwear and bird baskets, the Vietnamese can now make them for a tenth of the price (damn you, globalisation).

The conference-hall response is that Britain must focus on core strengths in innovation, design, creativity bla. Which, of course, is true. But don’t expect multi-millions of clever Chinese graduates to be content pressing the start buttons on the production lines; they, too, want part of the exciting new product game.

For the UK, it comes back to customers – what they want, how we look after them, what price they’ll pay and, important, when they no longer want what you’re trying to sell.

I met a terrific young entrepreneur called Alicia Navarro recently. She started an online news business and worked ferociously to build good traffic levels. When targets weren’t met, she shifted her model to providing white-label community sites to customers. Again, the proposition didn’t quite work out.

Within her business, however, was some code they’d developed that enables customers (usually publishers) to make money when their link to a retailer’s site drives a sale. Alicia never anticipated it, but this now-patented code is now the centre of her already-profitable company, Skimlinks, and she’s raised £1m to drive its sales.

Simple, ish.

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