A rifle versus a shotgun — two weapons whose intended impact on a target are significantly different.
Where the rifle with its bullet aims for precision (quality), the shotgun with its spray of buckshot aims for controlled imprecision (quantity). Both have analogies in how startups go about their businesses, but just like these weapons, the choice on which to use needs to fit the targeted opportunity.
Many organizations, in times of relative plenty, enjoy the fruits of business simply because there is more of it. Their marketing decisions could actually be “no decisions,” conveniently the result of serendipity. Unfortunately for these folks, past good luck is not a guarantor of future success and, in fact, if the luck portion is not recognized for what it is, may doom the future.
In this current time of “no plenty,” entrepreneurs need to make some difficult but necessary bets on where they see the best opportunities. Nonspecific shotguns will have to be replaced with very specific rifles.
Many start-ups have been of the mindset that the broader their industry focus, the larger their customer base. Viewed differently, theirs was a strategy that sought to capitalize a little bit in a whole lot of markets. While there was certainly a comforting rationale in this diversified approach, given their limited resources and personal inclinations, specific value-adding functions or services were not pursued. Because the pie was so large, less informed customers purchased their “one-size-fits-all” solutions even if they weren't optimal.
The economy has now marginalized if not completely eliminated many of these less-informed customers.
What have emerged are well informed, very value-conscious customers who are looking for specific answers to their specific questions and requirements. For them, a direct and relatively short path has to be established between what is being sold to them and how it will meet their unique needs.
This is where the critical bets have to be made. As entrepreneurs shift their focus, they need to recognize that their margin of error, their comfort in diversity, is significantly reduced.
A conscious effort should be made to evaluate customers and decide which ones have the best chances of succeeding.
Variables such as financial strength and industry status are but two aspects for this analysis. Other points to consider would be the strength of their suppliers and vendors as well as the solidity of their customers and their customers’ customers (think upstream and downstream dominos). Once this process is completed then every resource has to be dedicated to successfully serving this defined list. For some, an equally daunting task will be mustering up the intestinal fortitude to not pursue those not on the list.
To do nothing in this time of rapid and significant change is a sure bet on failure. This process and the subsequent decisions are not the kind that come without a high degree of personal consternation, sleepless nights, and gut-wrenching anxiety. These are “all in” bets and carry a high risk. But if you bet correctly and implement efficiently, the financial rewards will be there for the taking.
John F. Riddell Jr., director of the Center for Entrepreneurial Growth-Hamilton County, writes each Tuesday about entrepreneurs and their impact on companies and the marketplace. Submit comments to his attention by writing to Business Editor John Vass Jr., Chattanooga Times Free Press, P.O. Box 1447, Chattanooga, TN 37401-1447, or by e-mailing him at business@timesfreepress.com
John F. Riddell Jr., director of the Center for Entrepreneurial Growth-Hamilton County, writes each Tuesday about entrepreneurs and their impact on companies and the marketplace. Submit comments to his attention by writing to Business Editor John Vass Jr., Chattanooga Times Free Press, P.O. Box 1447, Chattanooga, TN 37401-1447, or by e-mailing him at business@timesfreepress.com.
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