RHRT – Radical Honesty and Radical Transparency …
I apologise if the title upsets you, but that’s the truth:
- If your business before Covid-19 (and there will be others) was not viable, then unless you pivot to some other Business Model that is viable, then your business is unlikely to survive.
- If your business before Covid-19 was marginal or viable, it may not be viable anymore, and you will likely need to pivot to some other Business Model that is viable. If you need to pivot or completely replace your Business Model because of our new reality and you don’t, then your business is unlikely to survive.
Let’s recap what every business needs. Every business needs a Business Model – how you make money while selling your solution (your product, service, and experience bundle).
The Seven Factors of a successful Business Model are:
F1 – A Job To Be Done – you are fulfilling a need with your solution.
F2 – A Complete Solution – is provided through a Distinctive Value Proposition (DVP).
F3 – Prospective Customers Agree – their Job To Be Done is best satisfied with your solution.
F4 – Prospective Customers Are Prepared To Pay – the price that you need.
F5 – Prospective Customers Exist – in enough numbers to achieve profitability, for sustainability, and for growth.
F6 – Customers Advocate – because they are so pleased with your solution, they in effect sell your solution for you.
F7 – Enduring Transient Competitive Advantage – is the ultimate goal, as a sustainable competitive advantage is rare long-term.
For a discussion on the Seven Factors above, see Unpacking The Basics, as well as The 1-Page Business Model.
Under the conditions we are facing with Covid-19, it is likely that few of us will achieve the growth we aspire to in F5. But if we don’t achieve profitability, even in a marginal way, then we will be going backwards and whatever we are doing will not be sustainable.
If you cannot cover your costs, you are going backwards and your business is not sustainable. If this is the case then you need help and need to change what you are doing NOW!
Even in this new Covid-19 reality, F5 should always be a goal. This means that you need to have excellent solutions; nothing changes there.
As for F7 – Enduring Transient Competitive Advantage? I’m not banging this drum anymore. We’ll all be doing well if we make it through the next 12-18 months or more.
In summary:
- Customers buy value (via solutions), not products and services as such, and
- It is customers who decide what is valuable to them, not you.
- Be kind, and think of the collective welfare. In the game of life, this is one of those games where it is ok if everyone wins, that is, we all make it through this challenge alive.
