Overnight Success in Business?
It is an interesting time in the world. We have information spewing itself at us from all angles, every minute of the day. Internet and TV constantly boast “overnight success” stories in business. It would seem that an idea is all that it takes to make millions. That couldn’t be more wrong.
Now, it is important to know that I am not only discussing overnight success in the context of massive Silicon Valley tech companies boasting hundreds of millions, or billions of dollars in company valuation. I am discussing how ANY company can increase their growth and valuation to become their OWN “overnight success.”
The 3 keys to setting your business up to get to that sensation level are Scale, Barrier to entry and Buzz
But, before we get to those steps it’s important to remember a few things…
The first step for a company…stop assuming that you can just have a Cinderella story. You’re owed NOTHING. The business world doesn’t care about yesterday if you aren’t innovating for tomorrow.
The second step for your company…Stop thinking that an overnight success actually happens overnight. Ideas don’t get invested in. Ideas that have been cultivated are the real success stories. Just because I have the idea to build a self cleaning blender that doesn’t make a lick of sound doesn’t mean anything. I have to build a prototype, I have to patent that prototype and, at a bare minimum, I have to show how that prototype can be produced and distributed to the masses.
It is NEVER just an idea
The video below shows how Gary Vaynerchuk worked himself to the bone for 15 years just to receive 15+ emails per day congratulating him on becoming an overnight success in the wine industry.
Let’s examine some of the the key pieces that can get a company into that elusive “overnight success” category.
Scale
Unless your business can reach a larger client base, return higher profits, or add a valuable component to an already established “player” in the industry, you won’t have, or grow, the success of your business.
I work with business owners on a daily basis and they constantly wonder why they aren’t worth more. Quite frankly, their business is designed in a 1:1 ratio. That means that for each dollar they put in, they get a dollar (or sometimes less) in return. That dollar may come in the form of actual currency, it may come in time, or it may come in creative resources. But, a dollar is a dollar is a dollar. Company value is determined by what the return on investment is today combined with what it COULD be in the future.
Companies that have the distinction of being called an overnight success have a business that when they invest 1 dollar they get 10, 100, 1,000, 1,000,000 back on it. So, want your business to grow? You need a structure that allows for the time and money you put into it to yield a larger return on the back end.
For many small businesses they have to spend so much time on execution that they never have time to build their business. Believe me, I am a believer in doing what it takes to succeed. But, when you have a proven product or service AND you actually want to grow your business (some do not), you have to add infrastructure to grow it. That infrastructure is often a few key components:
1. People — You cannot do everything on your own. You need a support staff. That may be sales people, customer service reps, or front facing execution (coaches etc). Understand how much these roles cost, smartly project how they will benefit the company knowing that it may not directly lead to higher sales, and then make sure that you track how well these folks are doing for you. As iconic as Steve Jobs was, he brought in a hugely powerful team of employees and board members to build Apple.
2. Technology — No, I don’t mean millions like large scale companies. I mean hundreds or a few thousand on products that will boost productivity or provide a much better user/customer experience. A game changer for increasing quality and quantity of marketing for small businesses has beenInfusionsoft and Sales Force.
3. Marketing — part of this may fall into the technology category but it is critical that you build out your marketing platform. Building your company brand, putting the social media platforms into play, making sure your website has a specific plan for how your customers will move through it and ultimately lead to a sale. I love the first viral video from Dollar Shave Club. They instantly got under my skin in a good way. Why? Because I am their exact target market (in my opinion haha)
The example to hit home is that of Instagram. People constantly discuss how IG sold to Facebook for $1 billion in 2012. What they fail to think about is that that sale took place almost 2 years after IG launched. But, prior to launching,Kevin Systrom began working on IG in early 2009. Do the math. It took IG over 3 years to be considered an overnight success. Mind you, success was relative as IG hadn’t brought in a bit of revenue when they sold to Facebook. The video below shows two very clear ideas
1. Kevin Systrom was highly educated, highly motivated and highly connected before he even began to build IG. That is part of the equation of why he was able to scale
2. IG recognized, via a first product failure, that their product wasn’t scalable because it was too complicated for a huge market. What did they do? They threw out the bad, kept the good, and created IG. Don’t be afraid to scrap the bad ideas!
Barrier to Entry
This is a deep topic if you allow it to be. For the scope of today’s post, we are going to narrow this into a very simple idea
Growth and success comes much more quickly when you offer a product or a service that cannot be reproduced easily
Businesses that created goods/products have a few large places that they need to consistently build on in order to be on the correct side of needing a barrier to entry
Technology and patents — simply stated, if you have a product that hasn’t been built, or isn’t legally able to be built by another company, you have a massive advantage. Think about the drug companies like Pfizer or Merck. When they have a patent, the world is at their fingertips.
1. Economies of scale — who do you think has the advantage, the company who produces each unit for $100 or the company who produces each unit for $25? Often economies scale are reserved for larger companies but it needs to be discussed even when you are early in your business. Costco, need I say more?
2. Process innovation — assembly line approach. When your company is innovative with the process of product creation you create barrier to entry for smaller players to enter. When Henry Ford created the assembly line approach to making cars he solidified Ford Motor Company in the history books
Certainly the list goes on but you can see that as your product’s brand grows you still need to design the business around the brand
Businesses in the services sector also need to be on the right side of this barrier to entry creation but often their components are a bit different
1. Brand — this is certainly within the product business sector but it is so valuable in the service sector because it is all about customer trust. The service business that has a great brand can yield better margin and still sell more. Think of the branding power the lululemon has created around their mission statement: “Creating components for people to live longer, healthier, fun lives.”
2. Business tactics and strategy — from advertising funnels, through the sales process, all of the way through the user’s experience during the fulfillment to of the service, and then through the nurturing of those clients after fulfillment so that those customers return over and over again. Tactics that are researched and highly tested are very valuable and create barrier to entry. Southwest Airlines pushed very hard to become a viable competitor, price wise, to ground travel. That required website innovation, logistics reinvention that made me tired just thinking about, and being steadfast in the mission of bettering the customer experience without increasing their price.
3. Investment requirements — Often, young industries are cheap to get into but long term economics always catch up. When there is “free” or cheap money to be had, smart businesses come into the industry, put money into it and move the economics to a more costly environment. Think of the investment that it would take to ever compete with the company FedEx. Physical locations, trucks, and people in many of the cities in the world. HUGE DOLLARS. Look at the graphic from FedEx if you want a serious eye opener in terms of the scope of what FedEx does around the world.
Buzz
It goes back to marketing 101. Who is your perfect customer? Are there enough of those customers to support large and sustained growth? How have you spoken to them in the past? And, how are you going to speak to them in the future?
Buzz doesn’t have to be multi million dollar add campaigns like Apple orBudweiser. Sometimes buzz is boring to the naked eye. Buzz may be B2B (business to business) in terms of presentations to boards about the effectiveness of a raw material or productivity gain of a proprietary service process.
Buzz is a combination of changing the market landscape and ensuring your audience can hear you
No product or service has ever emerged in a large way without creating excitement at the customer level. Even small businesses, such as gyms, are no different than the 50 other gyms in a 5 square mile radius unless they are able to create and sustain their client’s and prospective client’s interest. How does a business create buzz?
1. Great products and services — businesses often forget this. If you have an amazing product or service you will gain huge intangible value by word of mouth, referrals, and free advertising from people. Instagram fits into this brilliantly because they didn’t do any marketing early on. People simply loved the product.
2. Believing in something — Do you want to hire military veterans? Maybe your product helps to keep more people healthy or safe. Maybe your service gives hope to people. You don’t have to change the world but you do need to decide what is deeply rooted in your and your company’s beliefs and authentically bring that to the surface. Theranos, and owner Elizabeth Holmes, has built an empire in the blood testing market with the belief of “Our mission is to make actionable information accessible to everyone at the time it matters.” That belief (as of Nov. 14, 2015) has built the platform that has many believing that Theranos is well over a $10 billion company.
3. Actual marketing — too many small businesses rely on word of mouth until the bitter end. It is very rare that small business wins for more than a few years without employing a real marketing strategy. You determine that marketing strategy based on your business’s core values, who your target market is and what that market listens to or watches. Then, based on that information you craft how to get in front of that audience OFTEN with smart messaging building that trust. The company Lead Pages comes to mind here. They market like crazy but they keep that marketing based around useable and helpful content in the form of digital media and videos so continue to consume it so that I can continue to see what’s new from them. Why? Because I believe that it will help my business.
It is no secret that Red Bull is a masterful marketer. Whether it is the huge extreme events that they put on or the cartoonish commercials that are unmistakeable, you cannot argue that they are unbelievable at creating buzz around their products. What is a very simplistic structure of that strategy? “To live with wings.” There are no barriers with Red Bull. What you desire you can go get. Red Bull constantly shows this. Perhaps one of the best “buzz” videos was when Red Bull sent a man into space. Seemed normal…until he jumped. He broke 3 world records and Red Bull had the world talking about it. Does your company have to spend millions to create a buzz? Absolutely not. Instagram got millions of users before they put money into marketing. They did it because their product struck an emotional cord in a very simple (and scalable) way and they entered an internet market that had no barrier to entry in place. Imagine creating buzz around another mobile phone picture sharing technology and not having it compared to IG now? Wouldn’t happen. The market is maturing in front of our eyes.
It is not often that a company doesn’t have all of these components in place when it miraculously called an overnight success. So often, companies experience fast growth immediately following those three components coming to fruition. It takes work and it takes time to build this out but so get that overnight thought out of your mind and get to work. You’ll get their faster!w the people and topics you care about most.