What makes a business tick?
Fundamentally, it is about matching a culture to the needs of customers – I did not say anything about the product here. Yes, you need a product but it is about assembling the right people to obsess about something and create something as a result that people will pay for. If you are not profitable then you are not obsessive enough about what customers want.
For e.g., if you see a chef (e.g., Massimo Bottura) talking about how much he enjoys his stuff, then you will want to pay a lot of money. His pasta, in a blind test, may be the same as other good chefs but you will pay more..it is because of his passion and obsession.
That is what people are paying for..it is not a ‘premium’ product, it is about obsession. Almost all great companies, e.g., Apple, were built on obsession and people are willing to pay. Profits will work themselves out. Hence, it is asking whether the team has the culture to obsess about what customers want..,if not, they will not be successful.
I know of a group of engineers working on a product for children. The question is whether they are obsessive about what kids want? If not, even if they are the best engineers, they will not create the most successful product.
Is this why ‘good ideas’ fail…maybe the founders or the culture was not obsessive enough. Can this explain success and failure in business or which one of the competitors succeed?
People are buying into the culture, not the product – Howard Schultz spoke about how they invited parents to retreats, how they created critical health coverage for parents in China – this is obsession about his ‘people’ – why do we go to Starbucks? Is it about coffee? Or do the people and atmosphere give us what we need and crave for? A semblance of home outside of home.
Be obsessed about people. Product is just a choice in between you and people.