Article as published in The Economic Times.
Standards is another great way to create a foundation for something that is sustainable and dependable. In simple words, standards is something that can provide a universal way to understand, measure or use something. Standards have been around for ever. Currency is a standard for doing monetary transactions, kilogram is a standard for measuring weight and meter is a standard for measuring distance. In technology industry, standards are basically Key Performance Indicators or KPI. The popular ones are Google page rank to measure the popularity of a website or Nielsen TV rating to measure the success of a TV show (or MavenMagnet Magnet Score to measure the impact of the elements of your campaign).
The most fundamental element of standards is trust. The way you are measuring something should be fair for mass adoption. Just like it takes a while to build trust, it takes a while for a measurement to become a standard. Another key property of standards is that it should be easy to understand, test and use. The way you calculate the KPI can be as sophisticated as you want, but it should be transparent enough to test and easy enough to report.
Like platforms, standards depend on adoption. The success and failure of standards is dependent on how widely it is adopted. For good or for bad, displacing a well established standard is as hard as anything can be creating yet another competitive advantage for the business and a great barrier to entry in the market.
In the space of technology driven business, it is really challenging to have a sustainable impact. The barrier to entry for a new competition to come up and take your place is as low as ever before. The cost of creating a new product for a bunch of smart engineers is peanuts thanks to the advent of cloud computing and open source resources. In such an environment, I think there are two good ways you can develop a business that is sustainable — develop a platform or create standards.
Platform in very simple terms is an infrastructure that forms the foundation. It’s a foundation of operations. It’s a base that provides enough opportunity to develop applications on top of it. The more common platforms we use every day are Windows, iOS, Android, Facebook, etc. Others being cloud computing platforms like Amazon AWS, gaming consoles like Xbox and PlayStation, and web browsers like Firefox.
It is really hard for a standalone platform to survive. The success of the platform like any other product depends on how many consumers adopt it. Consumers adopt a platform if there are applications for them to use on the platform. The more the applications for diverse community, higher is the adoption.
There is somewhat of a chicken and egg problem here — independent developers creating applications for a platform and consumers adopting the platform. To circumvent this, the platform developer should create the initial applications for mass consumer market. Be it Office for Windows or Safari for iOS.
Platforms have a unique ability to generate a network effect. More applications on it and more consumers adopting it provides a platform great competitive advantage and creates strong barrier to entry.
Entrepreneurship and sanity don’t go well together. Who in his or her sane state of mind will go after launching a company instead of joining some established business or taking a job with great prospects? It is like riding a roller-coaster every day without knowing if today it’s going to be a high or a low.
You don’t become an entrepreneur for the money. If you are well casted for the world out there, you can make lot more money being a corporate executive. You don’t do it for the comfort. Believe me, the life out there could be a lot more comfortable doing a 9-5. Why then? I think the only real reason is the passion and drive to do something that you absolutely love and believe in.
The thing that you require to succeed is to really stick to it. It’s that roller-coaster. You cannot quit if there are one too many lows in a row. Persistence is the key element here. Stick to it, take tangents and get better. You cannot be an overnight success (someone wisely said–it takes three years to be an overnight success, sometimes more).
Success is a funny thing. It is very subjective and relatively hard to measure. You can be successful by being happy or by being independent or by being rich. But if and when you end up “succeeding”, things change dramatically. All of a sudden, you become the sane entrepreneur!
I recently bought a new laptop. It was something I have been pushing out for about six months because I was so used to my 5 years old laptop which had everything I needed set the way I wanted it from the software to the auto fills and what not.
So as I start installing software and using the new laptop, I was pleasantly surprised by Chrome. As soon as I logged in Chrome with my gmail account, it auto populated everything from bookmarks to history to auto fills making my life so much easier.
I have a similar experience every couple of years I upgrade my iPhone. As soon as you log on using your Apple account, all your apps and notes and contacts just gets auto set to your new phone seamlessly.
The essential thing here is to understand what would make the life of your customers easier. I didn’t select to use iPhone because of its seamless upgrading functionality nor did I select to use Chrome because I can transfer my personal information across computers and make browsing experience easier. But after experiencing that, I am quite sure that I going to stick to iPhone and Chrome respectively. So here’s a small thing that might not be of that much help in customer acquisition, but can really be worthwhile in customer retention.
Next time you are at the drawing board adding great features to your product, think what can you do so that the customer sticks to your product even if there are a zillion alternatives out there.
Apple, Trader Joe’s, Ikea, Starbucks and brand X.
Being brand X is the dream of every other brand, or in other words, every other brand wants to be called in the same breath as these brands. So what are the essential elements to be part of the “cool pool”?
One of the biggest factors that differentiate these brands from their respective competition is trust. Trust is something that makes or breaks a brand. If your customers trust you to serve them in the best possible way, you create a stickiness factor for your brand like nothing else.
A key characteristic of these brands is that they are intensely customer-centric. From great in-store experience to product development to even product packaging, the idea is to delight the customer. These brands put customer at the center and revolves everything around them.
To be a great brand, you need to define it around a niche and focus on that. You should do a particular thing and do it better than anyone else. You should be the ultimate authority in your field of expertise and keep innovating in that niche to remain ahead of the competition. You can of course do brand extension, but keep it adjacent to your niche and leverage your brand.
Another idea of niche is to appeal to a niche audience. Niche appeal is a great asset for a brand. When companies market their products to a niche market, these people consider themselves member of the company’s cult. I am not suggesting that the product should not be for the mass market. The idea is to start from a niche market and then expand the reach to the masses. In the process, you will generate support from a group of mavens who will add to the company’s capacity to target a bigger and broader market in the long run.
You can never be a great brand if you imitate some other brand. You can of course learn from them and apply that in your industry. In order to be a cool brand, you need to focus on your customers and gain their trust, be an expert in your niche, and out innovate your competition.
Or for that matter the next Starbucks or the next Amazon or the next Facebook.
The key characteristic of these great companies is their distinctiveness and focus on their customers. The moment you start thinking in terms of being the next Apple, you lose focus on what you are and start following a path that neither distinguishes you from your competition nor serves your customers. There’s no harm in adopting best practices, learning from their mistakes, and being ambitious. But the focus should be on how you can do the best to serve your customers.
There are many examples of companies out there in different countries which follow the business models from some other countries and implement it in their own market. Many of these are acquired by the companies they end up copying, but there is a certain distinctiveness in the ones that survive in the long run. These companies are smart enough to adapt themselves in their specific markets. Whether it’s the payment plans or service agreements, these companies modify them with focus on their customers which leads to long-term sustainable success.
To sum it all up…hold your distinctiveness and focus on your customers. Find your own spot in the cool pool.