A real entrepreneur is someone who builds a business of something that the world needs – not vice versa.
Originally published in www.annunieminen.com/startwithwhat.
As proper members of a market economy, we are used to thinking that if someone is willing to pay for X, X “creates value” and is worth doing.
Respectively, if no one wants to pay for Y, Y must be pretty useless and is not needed.
As a consequence of this logic, the job of the entrepreneur is to come up with stuff people would like to buy. Preferably something that is a little bit new, so that folks have a reason to buy it, but not too new, so that they still recognise it as stuff they’re used to wanting. This is what in business bullshit bingo we call solving the customer's problems.
More often than not, we are quite far from problems and even farther from solving. What is actually happening is that we're fashioning little minor-to-mediocre needs, and crafting new toys to cater for them. To make this seem rational, we love to say “the customer is always right”.
What happens if we only optimize what sells easily? If we look for stuff where the threshold for people to buy is as low as possible?
We end up producing a lot of adult pacifiers to our varying cravings, insecurities and fears. Not only the obvious ones such as cigarettes, nicely branded organic candy bars, cozy micro-brewery beers and easy solutions to minor newly invented problems. But also more subtle stuff: Ways to feel good and mindful at work even when your company is doing meaningless or even harmful things. Ways to distract ourselves from the overwhelming big problems by engaging in tinkering around small things we can still control - such as cool new bikes, artisanal coffee and restricting our diets to match with "what cave men used to eat".
The prevailing thinking in business (“the king is he who manages to sell a lot of stuff to people”) has not only led us to be pretty boring in marketing and produce a lot of more of the same. Its more significant consequence is that by using our limited resources (time, intelligence, passion, the planet’s resources) for this kind of short-term pleasing, we fail to create and market products and services that bring about big, difficult and needed changes - that are significantly harder to sell but critical to the development and/or survival of humanity.
But things are changing. It is all part of a bigger transformation happening in business value creation: the special role of business as an agent free from the boring restrictions of ethics has come to an end.
The reason is simple: Just a century ago, almost any type of business did add some value in the real world. When a farmer in a village grew more crops and made his business grow, most likely that had a net positive impact on the whole village (more dudes employed on his fields, more knowledge on what crops grow where and how, more food on the table for everyone, tax dollars to build a school building, etc). When increases in our material wellbeing had a positive correlation with our wellbeing and development overall, monetary business profit was a pretty good proxy for whether some activity created net value or not.
However, things have changed more than just a bit in 100 years in terms of what really creates value in the real world. We don’t need a whole lot of more toys, gadgets, and other crap. Almost all of us reading this sentence right now could theoretically eat, drink and entertain ourselves to oblivion any day. Some of us do, I guess. Consuming more isn’t making us happier anymore.
In a world where we don’t need that much more stuff for individuals, but rather solutions to really big problems where we are jointly owners, who is the entrepreneur?
The Most Amazing Type We Should All Want To Be (MATWSAWTB) is not he who manages to sell a lot of stuff tapping into some existing weakness/craving/addiction of ours. That’s simply an opportunist.
The MATWSAWTB is he who asks himself what the world really needs, starts to relentlessly do that thing - and manages to make people want it and pay money for it.
For me, that’s the heart of entrepreneurship. At least of the kind we actually need. Harder? Yes. The only way for us to move forward and for business to be reborn to serve 21st century challenges? Hell yeah.
There are essentially two big blocks preventing many of us from transforming into MATWSAWTBs right away:
Some things are significantly harder to sell than others. Anyone who has kids, dogs, cats, husbands, or boards of directors can testify to this. Try to get a 2-year-old to eat a meal when he’s hungry, use the toilet instead of pooping under the sofa or go to sleep when all he has energy to do is scream.
Same is true in business: a major part of today’s business activity is not aiming at making humanity thrive, but to cash out on our less attractive characteristics - such as pettiness, laziness, greed and jealousy. Think how much harder it is to market a product that encourages for example honesty than one that utilizes, let’s say, our will to gossip (such as the countless sites and magazines for learning about the marital problems and poor choices of clothing of random famous people)?
The fact that it’s hard doesn’t mean you shouldn’t. You should. You really should. The real hard sales happens for things worth fighting for.
One of the biggest pitfalls we fall into is the “customer is always right” mantra used wrong. We let the “the customer will pay for this, but not for that” thinking guide our decisions, as it’s easier. It allows us to skip block #1, which can be a real bitch.
All of this sounds hard. So if I'm just a businessman, why should I bother?
Here’s why: Trends in consumer, employee and even investor behaviour are powerful. The companies that will be the winners of global competition in 10 years are the ones who have found a way to align their EBITDA with their (net positive) impact on something that matters.
The competition for the best doers is getting more and more fierce, as a smaller and smaller percentage of the global workforce is creating a bigger and bigger percentage of all value (money). If your company needs talented people to do great things, it's time to start thinking about your impact. At the same time, consumers are becoming increasingly aware of what they buy and why, and finally the technology is there for us to start effortlessly use transparent facts in purchasing decisions, instead of just anecdotes and marketing stories.
There already are many companies that think and act this way: energy companies that put enormous amounts of work into figuring out how to make renewable energy business cases work; mining companies that are creating new technologies to extract stuff out of the ground in a much more environmentally friendly way and make that profitable; behavioural change service companies that are fighting like crazy to build their business around making it easier for people to actively execute the changes they want and need. A certain MATWSAWTB who has made solar roofs cheap not because it was easy, but because it was pretty necessary for our planet.
I believe it is crucial for the future of both business and humanity that we start to make the difference between these companies, or rather business models, transparent. That’s why I’m building a quantification system that allows us to see what companies really do and what follows from it. Capitalism needs new tools.
The lesson for all of us as marketers/entrepreneurs/CEOs/action women? Simple. Before we ask the customer does he want to buy our product, let's first ask ourselves: What is the product I really believe in selling?
Annu. Founder of The Upright Project. Engineer and action woman who thinks it's time we update our way of measuring value creation of companies.
What is this blog?
Start with WHAT - why action eats intention for breakfast
Introducing the new entrepreneur
Spoiled young people and the myth about meaningfulness
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