This morning our MD Mitchel posted a video sharing his own personal experience around the “What’s the point?” question we often find ourselves asking.
Here we want to focus on how the question applies to startups too.
With so many people doing the same thing in business and more entrants into most markets every week – it’s easy to start questioning the point of being in business and how you fit within your market.
Why do businesses exist?
A good place to start seems would be to cover why businesses exist in the first place.
The obvious thing that springs to mind is to create wealth for the person who set the business up.
But beyond that businesses exist to:
- Create employment and nurture talent
- Contribute to the economy through taxation
- Drive innovation with new products and services
But really when it comes down to it most people are in business because they don’t want to work 9-5 for someone else. They want to create their own future and make a bit of money doing it instead.
So, what’s the point of your business existing?
Beyond making money, why does your business exist?
What’s the point?
If you’re just here to make a bit of money you’re more than likely not going to last long in the competitive landscape of modern business and startups.
8 in 10 companies fail within their first year.
There are lots of reasons why businesses fail, but these 3 are perhaps some of the most important reasons:
- They don’t solve a real problem
- They run out of money
- There is no differentiation i.e. they’re the same as everyone else
The running out of money issue is pretty obvious… if your outgoings are higher than your income for a sustained period, you’re going to run into cash flow problems and your business will fail.
But the other two are perhaps a little more complicated.
The problem of no differentiation stems from a bigger problem.
There are too many players in most sectors.
The big boys in each sector account for most of revenue and everyone else fighting for the leftovers.
If you’re not in an industry it’s easy to look in and see the success stories written in the news and on social media. But what you don’t see is the rest of the market struggling to make any money or headway.
Before you enter into an already saturated market, think carefully and ask yourself “do we really need someone else in this space?”
If the answer is yes, ask yourself “What’s the point?”
Hopefully from that you’ll get into thinking about the real reasons you want to get into business in that particular market.
It should come down to there being a problem you have noticed that you can solve better than anyone else is currently.
One where you can really add value to a customer’s life and do it better than anyone else already in the market.
Going beyond product market fit
So you’ve identified your market and the problem you want to solve.
When you’ve proven that a customer will pay you to solve a specific problem you’ve found something called your “product market fit.”
Marc Andreessen, the co-founder of venture capital firm Andreessen Horowitz,defined the term product market fit as:
Being in a good market with a product that can satisfy that market.
Lots of business and startup blogs talk about finding your product market fit but what they don’t talk about is the fact that a lot of founders lose sight of why they started their business in the first place.
When you’re bogged down in developing a product or growing a business it’s easy to forget that problem, so when you’re building your business constantly ask “What’s the point?”
It will keep you aligned with the problem you’re trying to solve and remind you why you developed the idea in the first place.
Going beyond profit
One way to really get yourself motivated and finally answer the “What’s the point?” question is to have a purpose beyond profit in your startup.
The likes of Warby Parker and TOMS are prime examples of brands thriving with social change at their core.
Often founders and management teams run out of steam and energy when they’re starting out and trying to grow with overworked teams who barely make it to the end of the week without burning out.
If you have a purpose beyond profit, the chances of you getting demotivated are a lot lower – because you’re working towards something you’re truly passionate about.
It’s your responsibility to carry on ploughing forward, because you are the person put on this planet to make the change you’re pushing for.
Saving the planet, helping reduce poverty or making lives better is a much bigger motivator than your P&L sheet.
Constantly ask yourself “What’s the point?”
Never ask it in a negative way but in a challenging way to keep you aligned with your goals and ambitions.