4 simple steps to your Entrepreneur Superpower (2 min read)

Gifted entrepreneurs can read minds to deliver exactly what their customers want – no more and no less. 

entrepreneur superpower

Or so it seems…..

Unfortunately, however, this rarely happens.  Let’s review the typical entrepreneur path:

You come up with a great idea based upon a struggle that you or someone you know is experiencing. You are excited.  You begin crafting your solution.  You then show this initial product to a potential set of customers and ask them if they like it and if they will pay for it. They think it is great – just what they need – and would definitely pay for it.  When you come back later to ask them to buy your solution, they seem to have changed their minds.  What happened?

This standard approach creates a problem that has been called The Innovator’s Bias. This is when an entrepreneur falls in love with her product and strongly believes that if she can just get this wonderful solution into the market, all the other problems will take care of themselves.

The Innovator’s Bias affects the way you see the world, the way you talk to people about your solution and their needs.  It is one of the main reasons why your startup or your latest product offering fails.

Conversely, the user suffers from the Endowment Effect – he over values his current “solution”.  He becomes emotionally attached and will only switch when the alternative is significantly better.

These biases contribute significantly to The 9X Effect described below:

9X effect
Here is how you can learn what these so-called “gifted” entrepreneurs have figured out – usually by trial and error, not some innate ability.  It is actually a skill that they have learned over time with practice and the right mindset.

One approach to overcoming the 9X Effect is simple but not easy. If you focus on the four steps below, you are well ahead of your peers giving yourself a much better chance of discovering a problem worth solving.

  1. Identify the problem – This part is the hardest.  The advice, “talk to your customer”, is ubiquitous, however, the optimal way to do this is not.  We have to learn how to interview a customer without bias and/or watch current behaviors to identify the underlying needs that they are unable to express when asked, “Please describe your problem”.  They suck at this. Don’t believe them. Their answers are influenced greatly by existing solutions and are usually unable to tell us more than surface problems.  We need to get to the root problem. There are several approaches to help you get there- Lean Customer Development, Jobs to be Done, and Design Thinking.
  2. Identify the Customer Segment(s) that has the problem.  Pick a group of folks you believe already have this problem.
  3. Identify the Early Adopters – Narrow down the Customer Segment that likely struggles with the problem most acutely and are solving it (or trying to) on their own today – usually by brute force or cobbling other things together.
  4. Identify alternatives – These may be direct or indirect competitors or some home-grown solution. Please note that if you truly uncover the problem (aka – the job to be done), you will very likely find out that your original competitive list is valid but not sufficient.  One book you can read is When Coffee and Kale Compete by Alan Klement for deeper knowledge on this topic. Please visit my Resources page for more book suggestions.

This is just scratching the surface but it you start here you will be far ahead of your peers.  You will begin to create a better user of your product.  If you put yourself in the shoes of your users, your newfound perspective will transform your design and innovation processes.  To learn more about this, Ash Maurya, the author of Running Lean and Scaling Lean, has a great blog and video series.

Feel free to contact me for a deeper dive as I am a practitioner of Lean Customer Development and Design Thinking and am well-versed in Jobs to be Done.


Be Exceptional!

(catalystgrowthadvisors.com; bill@catalystgrowthadvisors.com)

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A simple set of proven questions to see if and how you can dominate your market (1 min read)

Do you have an overwhelmingly high chance of success? A set of questions follows to help you determine if, how and why.

On his website, www.starprinciple.com, Perry Marshall put together twelve questions to ask yourself and your team to see if you have the attributes of a “Star” business (link below).

“A Star business is one with an overwhelmingly high chance of success based on the ingenious formula in Richard Koch’s book “The Star Principle.” Richard used the Star Principle formula to grow his fortune from $4 million to over $200 million in 23 years – successfully picking 8 startup companies out of 16 that were tremendous successes. His 50% success rate is unheard of in a world where Venture Capitalists are thrilled to be at 10%.” – Perry Marshall from Starprinciple.com

I have provided an initial list of key questions that most successful leaders of fast-growing companies ask themselves and their teams.

  1. How do we become the leader in our market niche? What skills, knowledge, systems, and processes do we need to overcome the primary set of challenges to get us closer to our ultimate goal?  (If you already are the market leader, how are you maintaining that position? That is, how do you continue to meet the unmet current and future needs of your customers?)
  2. Does our strategy sharply differentiate us from all alternatives? (Most likely, you have one of two options to build from: You are the price leader OR, You have created a proposition that is more useful and elegant for your market compared to alternatives. That is, your product/service is a “joy to use”.)
  3. Do we have the right team in the right seats to take the fullest advantage of the opportunity?
  4. Have we determined and fine-tuned the key processes that accelerate growth and profitability?
  5. Do we have enough available or accessible cash to support the needs and growth of the business?

While this is a great foundation, there are cascading sets of questions that follow.  Please feel free to contact me if you have further questions.

Marshall goes further himself and provides 12 total questions that can be answered at this website to generate a score to see if your company qualifies as a “Star”.

Thanks for reading.

Be Exceptional!

(https://www.catalystgrowthadvisors.com; bill@catalystgrowthadvisors.com)

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6 lies that stand between you and success

In his 2013 book, The ONE Thing: The Surprisingly Simple Truth Behind Extraordinary Results , Gary Keller reminds us of how often we get in our own way to reaching our potential. Beliefs we have either adopted or that society foists upon us or conventional wisdom dictates or that no longer work for us act like a false ceiling. They keep us from realizing our fullest capacity.  Here are the six lies:

  1. Everything Matters Equally
  2. Multitasking
  3. A Disciplined Life
  4. Willpower Is Always on Will Call
  5. A Balanced Life
  6. Big Is Bad

Everything Matters Equally

In a previous blog post, I spoke of the success of Richard Koch, one of the most successful investors of our time. He has written several books. One of which is a treatise on the 80/20 rule and how applying it has helped him to have a 50% hit rate on his investments. Keller speaks of similar impact by not treating everything the same since everything and everyone are not the same. Most of the meaningful results are generated by a few decisions, actions, and/or people.

Those of us who figure out what The One Thing tend to drive the bulk of the progress and success in our business are usually the ones that succeed beyond expectations. Here is an example I came across last night while watching The Founder about Ray Kroc:

Kroc visited the McDonald’s hamburger stand in San Bernadino because they ordered an unprecedented 8 Multi-Mixers (milkshake mixers) to keep up with growing demand. Kroc drove half way across the country to meet them since this was such an unusual order.  Over dinner, Mac and Dick McDonald told Kroc how they figured out how to run a highly productive restaurant. One discovery was that 87% of their profit came from three menu items – hamburgers, french fries, and soft drinks. They soon cut the menu down to just 9 items from 27.

The other key breakthrough was speed. They redesigned their facility so they could deliver a consistent and delicious meal experience in 30 seconds versus 30 minutes. We call this an X-factor in Gazelles.

A combination of a few meaningful changes made a huge difference, was recognized by Kroc and became the largest and most famous restaurant chain in the world within a relatively short amount of time.


How good of a multitasker are you?  Trick question.  If you think you are a multi-tasker, you are lying to yourself – unless you count chewing gum and walking or breathing and writing. Science has long proved that the human brain can only focus on one thing at a time.

There are many examples of new drivers (and experienced drivers) placing focused attention to their phone and absent-mindedly taking their foot off the brake while at a stop light.  Many drive into the car in front of them as they realize too late that they are moving.  The reason is that the human brain can only focus deeply on one thing at a time. This is why practice pickpockets are so good at their chosen field.  Those of us who think they are multitasking are actually doing “rapid context switching”.  While it seems like you are getting more done, the process is actually less productive over time since it takes us up to twenty minutes to fully re-engage in the previous task.

Bottom line: Don’t multitask, you can’t do it. Here is a video to show you a real-life driving test from National Geographic. Spoiler alert: this self-professed multitasker fails miserably.

A disciplined life

Conventional wisdom says that disciplined people that live disciplined lives are the most successful. As with most conventional wisdom, this does not hold up.

The key to success is to be disciplined at the right time. A great example is Michael Phelps. He is considered a success by many standards. However, he is arguably not someone that has lived a disciplined life. His life has been chronicled publicly showing how his ADHD got him in trouble many times over many years. His Olympic coach, Bob Bowman, noted that Michael could often be found next to the lifeguard chair due unruly behavior at the pool.  His kindergarten teacher stated how he has no focus, can’t sit still and can’t be quiet.

Phelps eventually practiced what is called selective discipline. He focused on one thing – training. He spent 365 days/year in the pool channeling his energy into one endeavor. This focus also spilled over into other parts of his life. Later in Phelps’ career, Bowman was quoted saying that Phelps’ discipline was his strongest attribute. The same guy who made him stand next to the lifeguard chair years earlier!

The key to discipline according to Keller is to be disciplined long enough to create a habit. He cites a study at the University College of London that showed that the average amount of time to create a habit is 66 days. If you are having trouble sticking with something it is most likely that it is not yer a habit.  Give it a try for a couple of months and see what happens.

Willpower is always on will call

“Where there is a will, there is a way.” Lie!

Many of you have probably heard of The Marshmallow Test.

The issue is that willpower has a limited battery life. We consume energy when we use willpower to not do something we really want to do. If we do not replenish that energy by eating well, sleeping enough, exercising regularly, it becomes harder and harder to resist. Here is an excerpt from The ONE Thing citing a Standford study:

Stanford University professor Baba Shiv’s research shows just how fleeting our willpower can be. He divided 165 undergraduate students into two groups and asked them to memorize either a two-digit or a seven digit number. Both tasks were well within the average person’s cognitive abilities, and they could take as much time as they needed. When they were ready, students would then go to another room where they would recall the number. Along the way, they were offered a snack for participating in the study. The two choices were chocolate cake or a bowl of fruit salad— guilty pleasure or healthy treat. Here’s the kicker: students asked to memorize the seven-digit number were nearly twice as likely to choose cake. This tiny extra cognitive load was just enough to prevent a prudent choice.

A balanced life

Making sure you live a balanced life is another myth that comes with the best of intentions. The problem is that if you try to attend to all things equally well, you will do nothing that well at all.

The key is to figure out what matters most and make sure you spend your time focusing on that first. Once that is satisfied, you can move back toward the middle or beyond the middle to the other side of the ledger – work and family, for instance, are on opposite sides.  The key is to counterbalance all the important areas of your life.

I heard Alan Mulally (CEO Boeing and Ford) speak recently and he was asked how he balances work and family. He said that he does not. He sees it all as one thing – life.  While he was busy turning around Ford and his daughter had an event that was in the middle of the day, he left work and attended the event as his daughter (and family)  were and are his priority. He may then find time in the evening to do some work when the opportunity presents itself as he had many people’s livelihoods relying on his ability to turn Ford around.

Keller writes the following: Start leading a counterbalanced life. Let the right things take precedence when they should and get to the rest when you can. An extraordinary life is a counterbalancing act.

Big is Bad

Few of us really know our limits or what we can truly accomplish if we focus our energies in the right areas at the right time.  Here is a great video example from Alan Fine, author of You Already Know How to Be Great, that illustrates the point.

Being growth-minded can lead to extraordinary results. It actually changes our brain wiring and helps us to accomplish wonderful things. There is a study that Carol Dweck cites in her book Growth Mindset. Here is her TED talk on the subject:

When thinking big, most fear failure which is real and compelling. I listen to a podcast called Startup and it is rife with fear of failure stories. The founders that are interviewed constantly talk about how they made promises and strive to live up to them so they do not let others down. One founder was most concerned with what her mother thought when the business was reaching a critical decision point.  She was likely going to lose her mother’s money but even worse was her fear that her mother would be disappointed in her. Growing up, she recalls always being successful at what she set out to do.  This was the first big thing in her life where she was likely not going to succeed and she was not looking forward to telling her mother.

The conversation with her mother went very differently than she thought. Her mother was proud of her for trying, glad that she took the risk and learned so much from it. There was no talk of disappointment. Sometimes what we fear most is all in our heads.

To avoid the fear of failure many compensate by setting their sites low so they can succeed but miss out on extraordinary results. Here are some suggestions from Keller to think about when you find yourself in this situation:

  1. Think big – If your first thought is 10, think about ways to make it 20 or 100.
  2. Think “different” – The way to be so much better than anyone else is to find ways that clearly set you apart.  Think Dyson, Apple, Next, Google, Facebook.
  3. Act bold – Come up with ways to be a breakout success.  Test all the ways you can think of to do so and pick the one that looks like it will work the best.
  4. Redefine failure – Failure is not lack of achievement.  It is not learning from that lack of achievement and applying it to the next challenge.

Pick one of these and focus on it in the next few weeks and see what happens. Please write to me and let me know how it went.

Good luck!

Be Exceptional!

(catalystgrowthadvisors.com; bill@catalystgrowthadvisors.com)

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Playing to win: 5 steps to creating a winning strategy (4 min read; first in a series)

Many people believe that the formulation of a winning strategy is primarily the domain of the management consultant.  However, most anyone can create a winning strategy. According to Playing to Win: How Strategy Really Works by A.G. Lafley, Roger L. Martin, formulating a winning strategy consists of asking five fundamental questions.

  1. What is your winning aspiration(s)?
  2. Where should you play?
  3. How can you win there?
  4. What capabilities do you need?
  5. What management systems would support it all?

I believe a winning strategy originates from:

  • Price/cost basis – The winner is relentless about the removal of unnecessary solution costs that allows the company the opportunity to price it comparably and enjoy greater margins or give back the savings to the consumer thereby picking up significant market share and increased profits over the long term.

McDonald’s originally beat its competition by offering a comparably tasty hamburger for half the price of any other similar dining out option. People were so enamored of the proposition that they did not mind waiting in line, having few choices and cleaning up after themselves.

  • “Joy to use” basis – Others call this a differentiation or proposition-based strategy. No matter what you call it, this strategy drives you to build something so compelling and such a joy to use that people will pay higher prices. Examples are Apple, Dyson, and Nest to name a few.

Each of these companies strives to figure out the true and compelling functional and emotional needs of their customers. They build a product or service that meets the most important and least served of these needs and typically no more. Unfortunately, many products and some companies die because too many extras are added on unnecessarily and the cost burden of providing or supporting them makes the offering less attractive. (Clayton Christiansen offers some great thoughts on this in many of his books.)

For companies like Apple or Dyson, the original offering is usually quite deep and, once it has been perfected to get the job done, then and only then do they begin to go wider and find other markets and industries focusing primarily on their core competencies. For example, Apple has taken its core competencies of elegant design and user-interface simplicity to craft a unique and highly successful retail concept among other offerings.

Strategy is fundamentally about choosing what to do and more importantly what not to do. Starting from a simple A or B choice from above may help you as you start the process. What you end up with will be of your own creation but most winning strategies are later generation versions of the low cost or high-value proposition bases.

I will touch on each of these five “winning strategy” questions mentioned above over the coming weeks starting with:


A winning aspiration a compelling ambition that excites your organization and guides the underlying products and processes that get you there to be meaningful to your team and customers. This powerful combination can act as a magnet to attract both customers and employees.

An example highlighted in Playing to Win describes how Olay, defined its winning aspirations as market share leadership in North America, $1 billion in sales, and a global share that put the brand among the market leaders.

GE’s Jack Welch had a simple winning aspiration to be number one or number two in any market they entered. If they could not be number one or two, they either left the market or never entered.

According to Playing to Win, when crafting your strategic aspirations:

  1. Do play to win, rather than simply to compete. Define winning in your context, painting a picture of a brilliant, successful future for the organization.
  2. Do craft aspirations that will be meaningful and powerful to your employees and to your consumers; it isn’t about finding the perfect language or the consensus
  3. Do craft aspirations that will be meaningful and powerful to your employees and to your consumers; it isn’t about finding the perfect language or the consensus view but is about connecting to a deeper idea of what the organization exists to do.
  4. Do start with consumers, rather than products, when thinking about what it means to win.
  5. Do set winning aspirations (and make the other four choices) for internal functions and outward-facing brands and business lines.


I ask most of my clients to start any engagement with me by conducting a visioning exercise, as the process can be supportive and informative when thinking through your winning aspiration(s).

Visioning is a thought experiment that puts the leadership team into a frame of mind of having already won. I ask them to pick a time in the future many years from today and to describe in writing what they see and what the future has become.

The best version of this exercise I have come across is from Ari Weinzweig, founder of Zingerman’s bakery and author. Here is a link to the Inc. article that provides a step by step process to create your Visioning scenario. In work I do with my clients we do only the 4th step with an option to do Step 3 if they wish.


Starting with an end in mind is a tried and true adage. It applies to many areas in your business and personal life. It is especially useful when you are playing to win. After all, a journey without a destination is just aimless wondering.

I encourage leadership teams to take the uninterrupted time to think through and debate what your winning aspiration(s) is. It will be time well spent and something you should revisit often to check that it is still true and will be for the foreseeable future. If you do this and you find that industry trends, consumer tastes, technology, demographics, etc. are beginning to change, you will have time to make adjustments to remain relevant and out front.

Good luck!

Next time, I will touch on where you should play.

Be Exceptional!

To learn more about building your own One Page Strategic Plan visit https://catalystgrowthadvisors.com or contact me at  bill@catalystgrowthadvisors.com.

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Simplification leads to outsized business success (2 of 2; 4 min read)

What do the following people have in common?

Henry Ford; the McDonald Brothers and Ray Kroc; Walt Disney; Ingvar Kamprad; Herb Kelleher; Steve Jobs and Jony Ive; Akio Morita; Bill Bain; James Dyson; Mitt Romney; Jeff Bezos; Pierre Omidyar; Larry Page and Sergey Brin; Daniel Ek; Joe Gebbia; and Travis Kalanick and Garrett Camp.

They all believed in the words of Antoine de Saint-Exupery:

“A designer knows he has achieved perfection not when there is nothing left to add, but when there is nothing left to take away. “

They built businesses, offered services and crafted solutions that were simple.  In his book, Simplify, Richard Koch, shares the principles behind his successful investment approach.  He looks for Stars. Stars are companies that are superior to their counterparts in many ways: they are great places to work, offer customers the solutions to best meet their needs and, great investments. Koch amassed the bulk of his wealth, achieving a 50% success rate, by investing solely in Stars.  This is impressive since the average investment success rate hovers around 10%. He earned a 53-times multiple on his money investing in only 16 companies over about as many years.

How to Simplify

Koch describes two strategies – price-simplification and proposition-simplification.  These two strategies are quite easy to understand but can be difficult to create.  Let’s take one at a time:


There are three precepts in this strategy

  1. Make something much cheaper both to make and to supply. This must always be the primary objective.
  2. Eliminate what Koch calls “expensive utility” — anything the customer can do without.
    • McDonald’s dispensed with waitresses and originally offered only nine menu options.
    • IKEA provided one style of furniture, reduced variety within each product category, and eliminated expensive shipping through flat-packed furniture and customer pickup.
  3. Increase utility where it can be provided at little or no extra cost. Substitute cheap utility for expensive utility.
    • Henry Ford helped to perfect vanadium steel which made a lighter, more robust car that was much easier to drive and maintain. However, car costs were kept low. Simple design, lighter materials, and an automated production system all contributed significantly.
    • Dick and Mac McDonald provided better hamburgers and fries than were available at the local coffee shop. They created an assembly-line preparation process with well-documented procedures resulting in little to no wait time for hungry customers. The combination of these attributes allowed them to price their burgers at half the cost of their rivals while still being as or more profitable.
    • IKEA takes a necessary but typically unwelcome process and makes it fun. They know their customers and cater to their needs. By providing play areas for young families, inexpensive restaurants and offering those famous meatballs to give us the energy to keep going we stay longer and buy more.  Most important, IKEA turned a dreaded experience into an enjoyable one.

Coming up with the right combination of expensive and less necessary things to take away and inexpensive things to add takes patience and trial and error. However, the results can be spectacular and well worth the trouble. Knowing your customer and breaking free from the conventional thought processes are key to coming up with clever ways to offer just the right amount of value.


There are two precepts for the Proposition-Simplifier strategy:

  1. Make something a joy to use.  Add utility through greater ease of use in the first place; then greater usefulness and/or art.
    • Apple is famous for the relentless pursuit of simplicity.   They have proven themselves as the best provider of simplicity with numerous products such as the MAC interface, the single button mouse, the iPod, the iPhone, iTunes, Apple Pay, etc. They add utility by making things easy to use meeting customers’ needs before they even know they need them.
  2. Use simplicity to make the product cheaper to make; or at least to ensure that the extra utility far outweighs the extra cost.
    • Dyson’s bagless cleaner is see-through, easy to empty, and elegantly designed.  The “art” in the design and use of this premium product commands a higher price.
    • The Nest thermostat with its beautiful and well-thought out design and learning capability can cost up to $300.  The thermostats in my house are 1/10 that price.

Having the discipline and patience to design something that is a “joy to use” is rare. Apple is a good example, Dyson is another, Disney is a third. All of these companies can demand a high price and generate high profit (e.g. Apple has about 14% market share and 70% profit share) because they do three things extremely well:

  1. They make their products and services extremely easy to use
  2. They make them useful and,
  3. Emotionally appealing.

What kind of simplifier are you?

Koch offers four questions that will help you decide:

  1. Do your firm’s attitudes — its policies and culture — make it more disposed to pursue price-simplifying or proposition-simplifying?
  2. Has a competitor already occupied one or both of the target positions?
  3. Can you see the key to unlocking either position?
  4. Does your firm have people with the necessary skills to execute the target strategy? If not, do you know how you might recruit them and from where?

Koch also provides a number of tests in his book, Simplify, to provide guidance on which strategy is best for you and where your business may have gaps to fill.  If you are looking to learn more, I recommend these additional resources:

Thank you for reading!

Be Exceptional!

(www.catalystgrowthadvisors.com; bill@catalystgrowthadvisors.com)

I look forward to your comments. If you found this post useful, please share, comment and/or like.


Be the next Google, Charles Schwab, SouthWest… (1st of 2 posts; 2 min. read)

First, let’s start with some background.

“Star” is one of four terms coined by Boston Consulting Group (BCG) many years ago to describe their management consulting approach – The BCG Growth-Share Matrix. The Star designation is used extensively by one of its former consultants – Richard Koch – to designate a high-growth and high (relative) market share company.  That is, one that has chosen and or positioned itself in a market where it has a tremendous chance to be a runaway success.

Koch has done very well financially over twenty years by investing in a dozen or so companies making hundreds of millions of dollars leveraging this simple formula. He looks for Stars.  He created a 5-minute discovery process to ascertain what businesses are Stars and which are not.  He also provides advice on how to turn your company into a Star in his recent book, Simplify.

Perry Marshall, Koch’s business partner, interviews Richard Koch below. The video is a bit long. If you are pressed for time, skip to 18:00 to bypass Koch’s background.

12 Star questions

On his website, www.starprinciple.com, Perry Marshall put together twelve questions to ask yourself and your team to see if you have the attributes of a Star.

A Star Business is one with an overwhelmingly high chance of success based on the ingenious formula in Richard Koch’s book “The Star Principle.” Richard used the Star Principle formula to grow his fortune from $4 million to over $200 million in 23 years – successfully picking 8 startup companies out of 16 that were tremendous successes. His 50% success rate is unheard of in a world where Venture Capitalists are thrilled to be at 10%. (Perry Marshall from Starprinciple.com)

These are the twelve questions Marshall asks: (I modified the questions for brevity.)

1) How much has your business grown in the last 12 months?

2) Are you THE leader in your niche?

3) Does your Unique Selling Proposition sharply differentiate you from all others?

4) Is your product or service MUCH simpler and/or clearly more useful & elegant than any competitor?

5) How fast is your niche growing per year?

6) How do your profit margins compare to the competition?

7) Have you built an enthusiastic customer fan base that is identifiably different from the main market?

8) Compared to my closest competition, my product costs___________?

9) My Market is:

  • Very finite – no matter how good or affordable the products get, demand is inherently limited
  • Expandable – the better & cheaper products get, the more people consume

10) How strong is the demand in my niche?

11) What is the ease with which I can mass-produce my product?

12) What is the ease with which others can replicate my product?

These questions can be answered at this website to generate a score to see if your company qualifies as a Star.

N.B. This formula can also be used for investments as well as to help you pick a company to work for.

Two ways to be a “Star” business

If you scored below 100, do not despair, there are things you can do to position yourself to be a Star. Next week, I will talk about possible ways to move your company to Star status. Koch’s new book, Simplify, goes into great detail with examples of the two main ways to follow in the footsteps of the great Stars in business – Google, Ford, Bain, Walmart, Amazon, Apple, Honda, McDonald’s, Charles Schwab and others.

Koch posits there are two ways to be an overwhelming success:

  1. Price-simplification, or
  2. Proposition-simplification

For fun, guess which of the two strategies were applied by the above companies to make them runaway successes? Stay tuned, I will provide the answers in my second post on the topic.

Thanks for reading!

Be Exceptional!

(www.catalystgrowthadvisors.com; bill@catalystgrowthadvisors.com)

I look forward to your comments. If you found this post useful, please share, comment and/or like.

7 rules to find out what customers really need (4 min. read, 3 videos, 2 book suggestions)

If you are an entrepreneur, you are very likely doing it wrong. Please take a few minutes to find out why I believe this. I also provide suggestions and examples of how other successful entrepreneurs have gone about the process.

Why we fail

Human behavior consistently wins over proven practices when building a startup (see previous post) . The key first step is to first find a market for your product idea. However, most founders do it the opposite way; They come up with the idea first, then build a product, and then look for people to buy it.

One of the main reasons is that like all of us we fall in love with our own ideas instead of our customers. I believe that you should focus on your market and your customer first. This process usually leads you to the proper order in which to build a winning solution.

First, ask yourself: Am I addressing a problem that is even worth solving in the first place?

Second: How do I go about figuring that out?

Keep these two thoughts in mind: Entrepreneurs are great at rationalizing (all smart people are). Avoid blind faith. 

Learn from the best

There are many who have gone before you who encourage you to learn from their hard-earned experience and mistakes: Steve Blank, Eric Ries, Cindy Alvarez, Alex Osterwalder, Ash Maurya, Tony Ulwick, Jay Haynes, Clay Christensen, Bob Moesta to name a few.

These pioneers teach us to understand the jobs, problems, and needs of your prospective customer. Once you do this and have found a large enough market where customers needs are not fully satisfied, move ahead in haste to provide a better solution than what they have today. There is no better way to do this than to talk to them face to face.

How do I get started?

It can be scary to ask complete strangers for information and their time. We may feel like we are imposing. However, you will be surprised how eager they will be to talk to you if they think you can help to make their lives easier or to solve a problem they experience regularly.

People will talk to you because they love:

  1. Telling stories
  2. Complaining

Seven Rules to Follow

Proper customer discovery follows these guidelines:

  1. No pitching – Even a whiff of a sales pitch taints the interview.
  2. No ice cream questions – Pretty much everyone likes ice cream. No need to ask.
  3. Pull, don’t push – Ask open-ended questions that pull information out.
  4. “N of 1” is not proof – Ask at least 20 people to start.
  5. Past behavior is the best predictor of future behavior – Ask about the present or the past as your primary sources of information and insight.
  6. Ideal self v. actual self – Most people have a slightly delusional view of themselves. See 5. above for further guidance.
  7. Stories are better than statements. This one reminds me of something that happened to me a few years ago…..

Please watch this short video for more in-depth explanations of each.

Your goal is to not have customers tell you what they want or if and how much they will pay for something. Your goal is to find out if they have enough of a need that they will switch to your solution and pay enough for it.

As stated above, human beings tend to predict their future behavior inaccurately. Here are a few things to remember about people:

  • We are irrational
  • We rarely understand what is possible
  • We are usually bad at describing what we want
  • We are bad at predicting our own behavior
  • We are REALLY bad at changing our own behavior

In a previous post I write about the steps to plan for and interact with customers during the interview process. I also recommend that you read Cindy Alvarez’ and/or Tony Ulwick’s books about the process – Lean Customer Development and Jobs to be Done – Theory to Practice.

There are also some great videos on YouTube.  Here are more from the guys at Liffft:

Above is a YouTube channel that two enterprising and interestingly quirky guys have created that provide a handful of short videos to talk about the customer interview process (dos and don’ts). I already provided a link to one earlier in the post. Great stuff!

In the above video, Cindy Alvarez addresses an audience and gives a great overview of her experience as a Customer Development (CD) maven. The whole video is interesting. The CD info starts at 7:00.

I have provided a number of things that you can do on your own and encourage you to do so. Please note that you cannot outsource this nor get away with a survey as your only process. You have to interview real people. Cindy’s book provides a great step by step process for DIYers. There are also folks that can accelerate the process for you.

No matter how you approach the process, I encourage you to dig deeper as you will learn many useful things. That learning will help you to find out much faster if your idea or a derivative idea will work.

Good luck! As always, feel free to contact me for further info.

Thanks for reading!

Be Exceptional!

(www.catalystgrowthadvisors.com; bill@catalystgrowthadvisors.com)

I look forward to your comments. If you found this post useful, please share, comment and/or like.

Tom Hanks explains what happens when innovation goes wrong (4 minutes and 4 videos)

Well, actually, his character, Josh (Big), shows how too often we just don’t “get it”.

Brainstorming is a proven way to come up with new and innovative ideas. Or is it? Let’s look a little deeper to explain why we usually fail to meet Josh’s and our own customer’s needs.

If you assume that in order for your idea to succeed, you have to address a good number of unmet needs and if you assume that you need to meet a combination of at least 15 of those unmet needs, you have about a 1 in 14 million chance of coming up with the right combination on your first try. Here is the math:

If you assume that there are 3 competing ideas for each of 15 unmet customer needs in various combinations, then you are generating ideas on the order of three to the power of 15, which is 14 million ideas that you have to brainstorm and then sort through to find the best ones to pursue! Furthermore, in most markets, there are typically more than 15 unmet needs. This brings your chances of success to nearly zero!

In a previous post, I talk about how there are 430,000 new high-tech businesses started each year in the US. If you consider these two things together, you can understand why most startups and new product innovations have such a hard time succeeding.

This is the bad news, but the good news is coming in a few more paragraphs.

Abbreviated history of innovation

We have gone from product-centric where we build something and then look for a market to customer-centric where we talk to customers to get an idea of what their needs are to job-centric where we find the actual causes that drive purchase behavior.

Product vs. Customer vs. Job-based approaches

Product-based innovations – The Edsel, PC Jr., Zune, Segway, Pets.com – Need I say more?

Customer-based innovation is a tremendous improvement over Product-based innovation and if done well can drive worthy breakthroughs. However, most companies go about it in a less that productive fashion. They ask their customers (usually inadvertently) to help them to innovate which is not the customer’s job nor are they particularly good at it.

There is a famous quote by Henry Ford who said, “If I had asked people what they wanted, they would have said faster horses.” If Steve Jobs asked customers what they wanted, we probably would have had a better Walkman versus the iPod and then the iPhone, etc.

I will get to Job-based innovation in the rest of the post.

What causes someone to buy?

I am 6’, 52-year-old, 180-pound male. I live just outside of Boston in an affluent town, I am married, have one child. I enjoy hockey, I read about 50 books/year and enjoy crossword puzzles (except NYT’s Friday and Saturday!). I drive a certain type of car, am a leadership coach and workout 2-3 times/week. That is a lot of information about me, however, none of these attributes alone or in combination caused me to buy a subscription to Harvard Business Review. What exactly did? This is where job-based innovation starts and many call it Jobs to Be Done (JTBD).

In JTBD, there are those that argue that what one is trying to make progress in one’s life with the purchases decisions one makes. They argue further that there is a Core functional job that one is looking to address with Related and Emotional jobs that also are part of the process. Here is a great video from Clayton Christensen to help illustrate:

Why brainstorming does not work (for innovation)

I believe strongly that we need to come at the problem in a different way. Brainstorming new ideas, while fun and rewarding in the short term, gives us little or no chance to come up with the right answer for creating new solutions.

The goal (and measurement) of success for brainstorming is typically to generate lots of ideas. In fact, the more ideas the better. We then vote on which ideas are the best to pursue, send those off to the designers and developers, wait for the first version to be built and then we proudly present it to our target customer (fingers crossed). It is an iterative process; idea -> design -> develop -> intro to customer -> get feedback -> change product -> rinse and repeat. It can take months, years or never to come up with something that moves the needle for your business and fully satisfies your customer.

Wouldn’t it be better to get it right the first time?

Jobs to be Done Example

As previously noted, the basic premise of JTBD is that there is a core functional job that has not changed much over time. Some examples of core functional jobs are “listen to music”, “do the laundry”, “sell a product”, “water the lawn”.

Let’s use “water the lawn” as our Core functional job example. Now that we have the Core functional job we must then uncover all of customer needs that surround that job.

Customer Need Example – “Water the Lawn”

We have been watering our lawns for centuries. Over time, we have used many different solutions to do this. Irrigation systems, sprinklers, nozzled-hose, hose and thumb to spray the water, etc. It is highly unlikely that the customer who was using a garden hose to water his/her lawn in the 19th century could ever have envisioned an irrigation system to do the job. However, they could tell you what job they were trying to accomplish – water the lawn.

They could probably articulate some of their desired outcomes as well – cover the lawn completely, minimize the chance of overwatering, minimize the chance of under-watering, minimize the chance of watering during, before or after a rainstorm, minimize the time it takes, minimize the discomfort the process inflicts on the waterer, increase the lushness of the lawn, increase the health of the lawn, etc. These and many more needs are the same today but some are even more important and urgent as we have more consistent drought conditions. These changes will affect the level of satisfaction we have in present solutions which could provide an opening for a new technology to address the unmet need just as Pandora and Spotify filled the gap left by MP3 players.

There are also emotional needs that we are looking to meet when watering a lawn such as pride of accomplishment, showing off to our neighbors, giving the kids a safer place to play, showing your family that you are taking care of them, etc.

It is the combination of these needs which usually range from 50-150 in total that is the basis for what solution we create for the market. If we pick the right ones for a big enough market then we have a much better chance of succeeding.

Importance and Satisfaction

The next step is to do some analysis. Now that we have identified all or most of our customer needs, we have to understand how important each one is to the customer and how much that need is being satisfied.

This information will give you a better sense of what combination of needs are of the highest value and least satisfied or unmet.

Once you have this information, you can begin to build a solution or set of solutions to meet a set of needs that will differentiate you from the competition by building something that your customers want even though they may have never asked you for it. This comprehensive approach also increases your chances of providing a total solution since you now know what the customer values most.

This process also helps you to understand how to market to and service your customers.

There is a lot more to know and I encourage you to look deeper as I think this approach can and will give you a significant market advantage.

To get you started, here is a video that gives a great example given by Tony Ulwick, the professed originator of JTBD, explaining how Bosch used JTBD to build a better version of the circular saw. The example starts at 4:00.

There are lots of other resources that you can look at to learn more about JTBD. Here are a few:

Two books I recommend are –  Competing against Luck and Jobs to be Done – Theory to Practice.

Here is another video from Bob Moesta (another practitioner of JTBD – he applied it in at least two of his wildly successful businesses) who explains it to a class at Harvard Business School. (You can see Clay Christensen in the back).

If you are interested in learning more or talking to experts, please let me know.

Thanks for reading!

Be Exceptional!

(www.catalystgrowthadvisors.com; bill@catalystgrowthadvisors.com)

I look forward to your comments. If you found this post useful, please share, comment and/or like.

Competing with luck – 4 steps to a great strategy (#9 in a series – 5+ min read)

Do you have a proper understanding of unmet demand of your customers or industry, or do you mostly just invent new products or add new features to existing products and then search for a market? (paraphrased from How Companies Win)

Most companies do the latter regardless of their size. Often, they get pulled in many directions and build whatever the latest customer wants or what the salespeople are selling or something they are convinced customers want without ever talking to or observing enough of them to get a market-sized view.

They end up chasing revenue constantly and sometimes end up having to perform unnatural acts to make the month or the quarter.

They do get revenue in the short term and all seems great for a while but months or years later they find that they are stuck. Revenue has stalled and they cannot figure out why. They and the team are stressed to the breaking point or nearly so. They wonder why they cannot grow, why there is no time to get to the important work, how will they make payroll next week or next month. The founder/CEO begins to wonder if s/he wants to continue this way and should maybe just close the doors, sell the company or feels the company may be better off without him or her. I have not come across one client that has yet to experience at least one of these issues.

Usually, this happens due to the decisions (or non-decisions) that were made years earlier. Some or many of those decisions were made out of necessity or to accommodate a particular circumstance and may no longer be appropriate. However, over time, previous decisions become sacrosanct and are rarely, if ever, questioned. An important decision to question and make sure it is still relevant is the company strategy.

We, at Gazelles, define STRATEGY as the long-term plan of action to drive sustainable top-line revenue.

Two questions are key:

  1. Do you have a simply-stated strategy? That is, if I asked anyone in your company what the company strategy is, could they tell me in one phrase or sentence?
  2. Does that strategy drive sustainable top-line revenue? That is, how are you differentiated from your competitors and meaningful enough to your core customer(s) to drive consistent and predictable revenue?

Four steps to a solid strategy

1)  Get to know your Core Customer(s). I believe this is the fundamental building block of any decent strategy. Most companies build products and then look for a market whether they are startups or F500 companies. According to a number of research studies and experiential books, there are a few ways to go about really getting to know your customers. In How Companies Win, authors Rick Kash and David Calhoun talk about demand pools. They identify different types of customers that buy your product for different reasons. There is a great example about dog food and how the industry, for years, segmented their customers by the size of the dog which turned out to be a suboptimal model for profit maximization and customer satisfaction. The industry was ignoring a key insight – why customers bought certain types of dog food. It was much more about the relationship they had with the dog than the dog’s size. Here is a link to an article that touches on the topic. It was a game changer for the company they worked with (not named in the book). Tony Ulwick and Clayton Christiansen have a compelling approach discussed in Jobs to be Done and Competing with Luck. They talk at length about Jobs To Be Done (JTBD) Theory and Clay reiterates the very entertaining anecdote about selling milkshakes to illustrate his point elegantly. Bob Bloom, Inside Advantage, is another great resource in this area.

I am partial to JTBD where there are three main tenets to identify a Job that your customers hires you or your product for. When you do the work to nail this, it makes designing, developing, marketing and selling much easier. They are:

  • A Job does not change over time. For example, people want to “listen to music” as the JTBD. This has changed from live performance to radio, to cassette to CD to streaming service. The delivery and technology have changed but not the Job. It remains “listen to music”.
  • A Job has no geographical boundaries. The Job does not change in the UK, China, Russia or Lichtenstein.
  • A Job is solution agnostic. The Job does not care if you provide product, software or services. A deep understanding of the Job will inform the creation of the total solution.

I can go into a lot more depth here but will save it for another post.

2)  Be clear about your Core Competencies. This revolves around what you enjoy doing AND are the best in your world at. Core Competencies typically have three main attributes:

a)  They can be applied to multiple industries or markets

b)  They deliver a significant contribution to your customer’s perceived value of your company and products/services

c)  They are difficult to imitate

3)  Fine-tune the essential strategy components. In Gazelles, we talk about the following:

a)  Words you own – This is usually reflected online in SEO and top page rank on Google and other search engines (e.g., “Pizza delivery” is Domino’s)

b)  Sandbox – The “Who, What and Where” of your selling proposition

c)  Brand Promise – What your customers can consistently expect of you. Starbucks is great coffee. McDonalds is speed. 3M is innovation. You can also offer a guarantee to help shorten your sales cycle.

d)  One Phrase Strategy – For example, IKEA is “Flat Pack Furniture” or Southwest is “Wheels Up”. Each of these has a number of important business principles supporting them. For Southwest, it is a quick turnaround from when the plane lands to when it is back in the air (i.e.A,B,C boarding process, 737s only, no in-flight meals, etc. ) Southwest knows that the principle way they make money is having planes in the air and do that better than any other airline. They have been profitable for 40+ straight years following this strategy and being hyper focused on execution.

e) Differentiating activities – These activities separate you from the pack. They attract certain types of very profitable customers and repels those that are likely to be less profitable. They may even turn away some folks that were initially interested. There is a famous return letter Herb Kelleher wrote to a flyer who complained about one or more of Southwest’s main differentiators and threatened to not fly Southwest again. All he said was, “We will miss you.”

f) Profit/X – This drives your economic engine. For instance, there is a laundry delivery company, New Systems Laundry, in Portland, OR area, that focuses on Gross Margin/Delivery. They focus their fundamental business operations on how to maximize that number.

g)  BHAG – A stretch goal of what you want to hit in 10-30 years. This typically revolves around your Profit/X, your Purpose/Passion and your Core Competencies (what you are best in your world at).

h) Keep Track of Industry Trends – Many companies had a great strategy to start but lost sight of the industry as they were heads down executing their strategy only to be left behind. Paying attention to what is going on outside your walls is important. Some of these trends are Social, Technology, Consumer, Markets, and Demographics. Please note that this is NOT copying what your competitors do but continuing to build out a complete solution for your customers.

i) Innovation – Too many of us think about innovation as a huge jump forward where we leapfrog the market in one fell swoop. This is usually described as Invention. However, the most innovative companies make a science out of the innovation process. They know that there are multiple ways and places to innovate. In How Companies Win, the authors talk about 5 ways to innovate within your company.

  • Invention – Breakthrough solutions that are “category-makers”
  • New Product – Delivering new solutions with existing technologies or products
  • Product Enhancements – Variation on an existing product or service
  • Non-Product Enhancements – Packaging, merchandising or channel/distribution are examples
  • Operational – Changes to process or service can thrust a company forward
  • Business Model – Changes in how the product/service is delivered, produced, priced, or used can make a huge difference in the business

4)  Establish a number of SMART goals that get you started on your long journey to your BHAG.  A BHAG is usually a stretch goal or a North Star. Usually, it is a target that makes you a bit uncomfortable and when you set it, you do not quite yet know exactly how you are going to achieve it. The best was to get started according to Charles Duhigg in Smarter, Faster, Better is to break it into smaller chunks that you can start right away. Here is an example from his book.

As cited in the graphic above, running a marathon can be a daunting goal to set but when you break it down into Specific, Measurable, Achievable, Realistic and Time-Bound bits, it can be done. It also seems a bit less scary. The U.S. put a man on the moon with a very similar approach. Japan built the first bullet train as well using a similar long-term goal and then a series of smaller steps to get started.

There are a few other more sophisticated techniques you can employ to really dominate a market. I wrote about one of them a few months ago (click here).

A solid strategy is pivotal to having a winning company. It is not an easy task. It takes a fair amount of thinking to get started and needs to be reviewed on a regular basis as you learn more from your customers, employees, and the market. However, without solid execution, even the best strategy in the world is very likely to fail. That will be the topic of our next post.

Be Exceptional!

(www.catalystgrowthadvisors.com; bill@catalystgrowthadvisors.com)

I look forward to your comments. If you found this post useful, please share, comment and/or like.

4 Decisions to get right for scale-ups (#7 in a series – 3 mins)

We have now covered all the main areas in previous posts to tackle in order to successfully navigate through the startup phase. We will now move to the next stage of your business growth – scaling up! (This assumes that you have customers, employees and are at least near or at break even if not making some profit.)

That is the good news! Here is the not so good news:

Now you have to unlearn almost everything you have learned in the start-up phase (please see my companion post). In order to make sure you scale in a healthy and thriving fashion, you must identify all major business decisions you made along the way, revisit them as a team, and re-make them in a deliberate and thoughtful fashion.

You will keep some, discard others and modify the rest.

Until now, most of your progress was made by making decisions on the fly. Some may be correct but others may hurt you down the road. Some of those can be deadly as they may lack warning signs until it is possibly too late.


Speaking of warning signs – for example, what if one of the founding or early managers hires poorly. That lack of skill can have enormous repercussions as you scale. Those poorly hired people may turn into managers who will then hire other people. Over time, this cascading practice could have an insidious effect on culture and performance. You could find, as founder, a few years down the road, that you come in one day and do not recognize your company anymore. The well-oiled machine that took your blood. sweat and tears over many years to build is now dysfunctional, moving at glacial speed and the competition is crushing you. Worst of all, you don’t like coming to work anymore at your own company!

Looking Forward

Over the next several posts, including this one, we are going to cover why most businesses fail. We will then work through the four critical decisions you have to get right to build a company of steady growth and high value.


The decisions we will cover are the following:

  • People – How do you create a harmonious culture of accountability?
  • Strategy – How do you create a strategy that is simply stated (by everyone in the organization) and one that drives sustainable and predictable revenue?
  • Execution – How do you optimize your profit in a drama-free workplace?
  • Cash – How do you create sustainable sources of cash to fund your growth?

Here is a list of companies that made these four decisions right:

  • Starbucks
  • Apple
  • Boeing
  • Medtronic
  • Red Hat
  • Ford
  • Atlassian
  • Southwest

Now let’s pivot to why, arguably, most businesses fail.


Growth is one of the major reasons (if not the main reason) why businesses fail. It is the silent killer of business.


Here is a great example of a company that grew too fast but survived – remarkably, by slowing down.

I just heard a great podcast with Yvon Chouinard, founder of Patagonia. He talked about his experience re: the growth of his now $750M business over its fifty-year life of the company. He mentioned how he lived through two main growth types over that time:

  • Fat growth – Growing for growth’s sake which can lead to eventual death due to uncontrolled expansion or similar affliction.
  • Strong growth – Growing thoughtfully and deliberately balancing productivity and people keeping the customer at the forefront perpetually.

A start-up can be driven to scale prematurely (usually by its well-intentioned investors) especially before it has nailed the product market fit. A scale-up can suffer from what Patagonia’s founder mentioned above by growing out of control usually in a haphazard fashion. Your organization may also get stuck due to an incomplete strategy and/or one that is poorly executed and/or possibly issues with the senior team that affect the organization negatively at all levels. As the senior team goes, so goes the rest of the organization.

There are many ways that organizations can fail. However, companies that improve and/or endure over many decades or generations typically do the same few things well. I like to use a modified version of the Anna Karenina principle that Tolstoy writes about in the novel of the same name to articulate this phenomenon.

“Successful companies are all alike; each unsuccessful company fails in its own way.”

Although it does not apply 100% across the board, it is pretty accurate.


I have been lucky enough to hear (Ret.) General Stanley McChrystal (Commander of JSOC), CEO of Red Hat, James Whitehurst, Greg Brenneman, CEO that orchestrated Continental Airlines turnaround and Alan Mulally, CEO of Ford and Boeing, all speak this year. They all told basically the same story about how they were able to become successful.  Some had the odds stacked against them and were in very unfamiliar situations.

How did they do it?

They did a few extremely important things very well and they all revolved around people, strategy, execution, and cash.  The four decisions eery company has to get right to scale up.

Next time, we will start with PEOPLE as this is a keystone “decision” that affects everything else in your organization. I will share the principles behind this important decision and provide some stories to reinforce them.

Thanks for reading!

Bill – Certified Scaling Up Coach

Be Exceptional!

(www.catalystgrowthadvisors.com; bill@catalystgrowthadvisors.com)

I look forward to your comments. If you found this post useful, please share, comment and/or like.