I started working for a major insurance company right out of high school. I was only supposed to be there one day. It lasted almost ten years. It was a different time in business. You started at the bottom and worked your way up. The company had a clear vision that if they provided a good product, educated their staff, and participated in the community, they would be successful. They understood the value of all levels of customer service. One of the first things I learned while working there was the focus and dedication to the customer both internally and externally. Say what you want about insurance companies, and I can…and have…said a lot. But their success is clearly attributed to being able to deliver a product their customers want and need.
Something happened in the digital age to change all that. The focus now seems to be on starting a venture, and selling off the assets as soon as possible. I’m reminded of PT Barnum’s opinions on suckers and money. It seems that during the late 90s and early 2000s the focus had been on what idiot you could get to invest in your enterprise long enough so that you can get some quick cash, and retire to an island paradise without extradition.
I have always judged a business by their focus on the customer. If I sit in an interview for a job or contract, and the person talking to me starts to discuss their venture capitalists, or how smart and talented they are, I start looking for the door. However, if they start to talk to me about what they are doing, and what they are providing to their customers, I perk right up. This gets me excited. I could care less if you have the smartest Java developers in the world, or if your VC is a peach, and your free soda machine speaks to you in 12 languages. If you’re not clearly focused on the customer, you’re wasting your time…and mine. Companies that focus internally are short lived. Either they don’t really have a product anyone wants, or they are under so much scrutiny by the guy writing the check that they can’t deliver the product they need to make their business successful.
If you can solve a problem, or provide a service, you have a business. Most companies start out with good intentions, and then forget the customer. Customers drive business, shareholders do not. If you keep your focus on the customer, they will buy your product. Let that drive investor decisions. Selling things makes investors happy. That doesn’t mean that the cost of revenue isn’t important. However, if all you’re doing is reducing your costs, you pretty much remove the revenue.
There’s no shortage of stupid decisions. I once worked for an online university that refused to market online. Think about that for a moment. They refused to market to their primary audience. It was baffling. On September 12, 2001, the day after the attacks on September 11th, I was working for WorldCom. Bernie Ebbers sent an email to every employee stating in effect “Yes…this is sad…but get back to work. We have a responsibility to our investors.” I’m so glad he’s in jail. After that, I worked for a small startup. Within a year the VCs fired the founder and CEO and all the developers. It was cheaper in Ireland and India. They didn’t consider that getting rid of all their intellectual capital might be an issue. They didn’t last much longer.
I have worked with many companies throughout my career. I have found that when companies pat themselves on the back, or are focused on their VC capital, stockholders, bondholders, and not their customers, they are doomed to fail. When I was in graduate school, my business professor hated Amazon. He called them vaporware. I couldn’t see it. In fact, I was buying things on Amazon almost weekly. Where else can you buy a book, an iPad, and a cold air intake for your sports car without leaving your couch? They have a clear focus on what the customer wants. They have some major critics too…mostly their investors. But they stay focused on the customer, and now they are the most successful online retailer in history.
Look at companies like Apple, Microsoft, Google, and wow, Facebook. They are hugely successful not because of their focus on the investor, but because of their dedication to their customer. Facebook went public this year to rave disaster. However, I don’t see the user base going down. They seem to still be making money hand over fist. They aren’t focusing on their investors as much as their users. Sure, they have their critics, but they also have over a billion users. Retailers fall all over themselves trying to market to that customer base. I even hear that they will fail in ten years. I heard that about Amazon too. If Facebook fails, it will only be because they ignored the customer, and focused on the investor.
Make no mistake. Investment is important to business. It’s the money which feeds the innovation. Just ask any pharmaceutical company. However, to ensure ongoing success you need customers. Long term goals, and strategic planning will always serve your business. Once you establish that, look for the investor that will meet your vision. Focus on the customer. To do any less, is to fail before you get started.