I’d like to talk about how to build a 100m company.
There are 5 parts to this process, which we share as a 5 part series
Each piece will look at the 5 layers of value a business owner needs to build across and through their company. We will also look at these layers across 4 stages over time. Each stage takes around 3-5 years, depending on your skills, history and experience, relationships, and access to funding.
The layers include:
Positioning – to compete and win
Building a System of Delivery
Securing a Purposeful Team
Value – ensuring you have a transferable, premium asset
Across each layer, the 4 lifecycle stages include:
Starting up, Scaling up, Ramping up, Value up.
It is all about starting with the end in mind—why do you do what you do and the difference between a Job and Asset. We will cover that.
This article unpacks layer 1 – Positioning. How do you start, scale up, ramp up and secure your value through positioning and how does it affect valuation and saleability?
You can listen to the discussion from The Money Show or read on.
This is all about how you set yourself apart in the crowded, noisy, competitive market. It is all about how you define your business and purpose. It is all about how you find, win, and hold customers, and it is all about why you exist!
Getting it right takes time and getting it wrong leaves you stuck in a world of operational noise and slog.
So, let’s get it right by looking at why we get it wrong first.
In 1774, we learned from Emerson that success comes from “building a better mousetrap.” He was right because very few products worked and functioned like they ought to, and it was all about winning on the back of a good product.
Then, in the late 19th century, Taylorism came about. It culminated in Ford claiming that you could have any Model T you wanted for so long as it was black. This was all about winning on price, and the production line came about to make that happen.
Then, in the late fifties, Herman Kotler, arguably the doyen of advertising and marketing, said it was all about segments. The theory was that birds of a feather stick together and understanding which birds you serve best would allow you to find and reach them more effectively. You would have seen the early stages of this industry emerge in the series ‘MadMen’.
Today, everyone in business has all three criteria in play – a good product or service, a competitive price, and an effort to market them to a segment of people they believe will buy them.
MBA completed. So why does it not work?
Ask yourself, “Why does my business exist?”
The purpose of any business is to solve a problem for a customer. If you cannot name the problem you solve, you will fail in your business.
Naming the problem is not enough. Understanding how the problem comes about, the cost of the problem, and ensuring that you, through your products and services, can solve the problem at a lower cost than the problem itself is a start.
To get this right, you need to know whom you are solving the problem for. This is more than a segment as defined by Kotler; it is a group within a segment. For example, blue-chip corporates are a segment. Within that segment are the mining businesses. Within that segment, there are deep miners. Within that, platinum. Within that, multinationals and nationals. Within the nationals, junior miners, It is like unpacking Matryoshka Dolls. You want to get to the niche within the segment that will act, behave, engage, and think alike. That is the elixir of your business, since understanding your customers on that basis unlocks how they experience the problem you solve and how they buy and behave around getting the solution to that problem.
Leading this element of your business changes over time too.
Starting up—sell to anyone and everyone, discarding your business plan but starting with one until you understand the segment and niches within it.
Scaling up – say no to everyone and anyone outside of the niche segment that you want to become an expert at serving.
Ramping up – you are marketing and selling into that original segment and also looking for a new niche within that segment that has an almost identical experience around the problem and solution.
Value up – lock in the niche segments you serve through increasing value for them, be it in how you reach them, serve them, and keep them This is the DNA of your business. It is why you exist. It sets you apart and distinguishes your business from your thousands of competitors. It is hard to see and copy once you get it right, adding a whole multiple to the valuation you would otherwise get.