This is not a trick question; the longer you have been in business, the harder it is to answer this question.
When you started your company you had a specific idea. But along the way 3 things happened:
1-
You needed cash, so you took on business that perhaps diverted your original focus
2-
The markets changed and you responded
3-
You learned more about your customers, their pain and how to contribute great value.
Any and all of these impacts ensure your business is constantly changing.
Right now I’m writing this blog from a Starbucks location near my office. What business is Starbucks in? When Howard Schultz joined this sleepy coffee shop in Seattle, they had one store and great coffee. Is Starbucks a coffee house? Actually, Starbucks exploded into prominence and dominance when it created “The 3rd Place” — a casual location that isn’t home and isn’t the office. Many people conduct business or use that 3rd Place to meet and chat with friends, read, or do homework. I regularly use Starbucks for writing books and speeches.
Knowing what business Starbucks is really in helps its management prioritize opportunities to position themselves for profitable growth. Early on Starbucks added food offerings for customers enjoying the 3rd place at all hours of the day. With the addition of wireless Internet, many road warriors spend hours in Starbucks working on their laptops (and buying drinks and food). Recently I’ve noticed Starbucks adding music and books for sale, all the while expanding its accessories of mugs and toys as Starbucks sells its “brand”, just like Harley Davidson does.
A clear understanding of what business you are in ensures you capture your best opportunities, consistent with what you do best.
So what business would you say Amazon is in? Clearly Amazon began as a channel of distribution for physical products—initially books, magazines, DVD’s then expanded out to electronics, home, garden, sports and plenty more. But Amazon quickly laser focused on their expertise as “data collectors” of what people buy and Amazon quickly added recommendations of new purchases based on your pattern of historic purchases. That shift in business has meant billions of dollars for Amazon as it left its book-selling competition behind.
What business is Google in? Not sure I have an answer for that yet, but it will be fun to watch how this plays out. Google’s initial focus was to organize information on the net, provided for free. Google has been making a killing with its Adwords sale (helping users heighten their visibility with info seekers) suggesting an advertising revenue model. Based on recent acquisitions, Google is moving its role from “organizer” to “provider” on the net as it makes available applications to use the information it organized from any computer in the world, not just the computer where you’ve happened to have installed your personal software. Now you can use free Google processing applications and free gmail accounts as a complement to its free information flow. Now Google is committing to open source software platform for internet services on next generation cell phones.
In today’s fast changing global economy, the most important thing you as a business owner can do is focus – and refocus– on what business you really are in. And be prepared to be surprised! The best companies do not necessary start out with brilliant category killer ideas but they are supreme at noticing how the market wants them to behave and accommodating their loyal customers. A combination approach of suggesting a novel business model and then being willing to tweak it in real time seems best for today.
So what business are you in, really? The answer will determine how you will act day to day to sustain your profitable growth in a dynamic global marketplace.
Stefania Aulicino is founder president of CapitalLInkUSA. For 20 years Stefania has helped business builders uncover the right capital for their optimum growth strategy so you get cash and keep control to build the business you really want. www.CapitalLinkUSA.com
