We hear all the time that sales are the biggest obstacle for business development. Many companies go under because their products fail to make a mark in the market.
Products fail because business is not focusing on its core goal. A goal of business is to deliver effective solutions. Many cringe at the idea of selling. People are afraid of experimenting, they want an easy out. Every entrepreneur I have spoken to wants to follow what I call straight line marketing. It means they simply follow what works. The mentality "what works for others will work for me too" is self-sabotaging. It is the delusion that provides hope that things will eventually work out on its own.
Many companies simply work on the assumption that product positioning can be figured out at a later stage. This is the reason many companies get their market research wrong. They are suffering from confirmation bias. How many people would admit they erred in decision-making? People hate admitting mistakes.
The product doesn't fail because of design or features. It fails because businesses don't want to admit the faults. I have yet to come across one entrepreneur who conducted extensive viability tests before launching the product. This is how companies are built-in 21st Century. Everybody wants to build something that is easy to flip. This is the crux of the problem.
As mentioned above, a vast majority of entrepreneurs suffer from confirmation bias. Each one thinks he is offering something that has no substitute. Finally, things begin to go wrong and the company struggles for survival.
Successful companies understand this and spend considerable time and money to collect information. They avoid the straight-line approach and prefer to take complex, zigzag route. They dive into data which helps them make informed decisions.
People ignore the realities of the market. Sometimes even the precedents can be misleading. Perhaps somebody genuinely tried to walk a zigzag line and failed. This blinds the vision of other entrepreneurs who prefer to take the simple route. After all, nobody likes to fail.
Each failure tells a story. It is important to view it objectively. Maybe one can find the missing piece of the puzzle. But the problem is people do not value failures, so they avoid learning from them. This failure continues to manifest itself in different forms.
The truth is businesses need not fail. Failure can be avoided provided one is willing to learn, to view things objectively, and to remain free from confirmation bias.
Ask Elon Musk, how much money it takes to make innovation commercially successful. A genuine innovation just doesn't have a commercial market. If it was that easy every innovator would be a huge commercial success. Companies like Tesla are successful because they received the right funds at the right moment.
Every entrepreneur claiming to be the world-changing innovators must introspect their idea. They must allow their idea to pass through the fire. Leo Tolstoy rightly remarked, "Truth, like gold, is to be obtained not by its growth, but by washing away from it all that is not gold." An idea must pass the test of fire, if it is pure it will shine, else it will be washed away suggesting it wasn't a good idea at all.
Innovative companies succeed because they are born through visionary and nurtured by capitalists. A vision alone is not enough to change the world. Entrepreneurs would have to do more than just come up with the idea. They must find a delicate balance between innovation and capitalism. An entrepreneur, though innovator, must think like a banker. He must develop a complete understanding of the product. He must be able to answer complex questions related to the product. He must have an understanding of product application, it's features, uses, and support required to create a market within a market. A vast majority of businesses ignore product positioning. Wrong positioning means sending the wrong message to the wrong consumer. If the product does not appeal to its target market, it has a very slim chance of success.
Instead of trying to conquer the market, companies would do well to identify one segment of the market. And only after firmly establishing itself in one segment, it should consider stepping on the next segment. An entrepreneur is always in a hurry to change the world, but such enthusiasm can jeopardize his chances of success.
A business possesses a complex personality. Its variables should be carefully balanced. A strong focus on market share can dent the financials. Similarly, obsession with costs can create a bumpy ride for marketing, and so on.
The real trick lies in identifying the variable that is sinking the ship. However, as a solution provider, a business must focus on identifying the customer's needs and satisfying it in the most innovative way.
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