Create Value, Focus on Contribution
A company and an individual are there to create value in society. An individual and a company exist insofar as they generate value for others. A successful company then is rewarded with profit when it provides value for others. So when building things the first focus is not how can I maximize profit, but how can I maximize value for my customers.
By focusing on value creation, and making our customers lives easier we focus on what matters creating value in society. So why is value more important than a focus on profit? “For what shall it profit a man, if he shall gain the whole world, and lose his own soul?”, Jesus, Mark.8. The answer is incentives. Focusing on value is focused on helping others, focusing on profit is focused on helping yourself. As social animals our focus should be on creating value for others, we derive our happiness not when we focus on ourselves but focusing on our abilities to solve problems for others.
So what is the question to answer if we are focused on delivering value? The question is is the product we are building for ourselves or is it for the benefit of others? If it is for others how does it benefit them?
Like all things there are exceptions. If the business exists to generate value by generating profit for its customers then the business exists to generate profit. The value it creates is by maximizing profit.
The Customer is Not Always Right (for You)
There is a general assumption that the customer is always right. However, I do do that believe that is the case. There is a right customer for you. The customer may be right in what they want but to achieve what they want they may not be the best customer for you. A customer is a the most important relationship for a company. You can choose who you service as much as a customer can choose you. So if a customer isn’t well defined then what you end up with is neither side being particularly happy about the choice they made.
So in a customer first relationship the best outcome is to take care of your customer and point them to a solution or a competitor because the relationship of taking care of someone is more important than getting money from them. The relationship we have is that we always take care of others and point them in the right direction and point them to solutions that solve their problems as opposed to over promising and underdelivering.
One of the primary objectives on Operationalization is to have Operational Excellence. We need to do the fewest things that generate value and in return cash. While it may be tempting to keep adding new shiny things the problem is that without having a clear operations setup it will be next to impossible to grow the business. So the primary focus on a company is to do the fewest things that it can do well. Once it has fulfilled certain actions in a cash flow positive way it can then add additional capabilities.
Reduce the Threshold of Bugs
In the process of doing things we may reach a point where bugs are lower but absolutely lower. Speed of delivery and collecting cash faster matters and that comes down to optimizing how fast the task is done. So anything that reduces the delivery speed is a big and must be improved.
Why customer first?
What if we are a bad fit for the customer?
What if we realize a customer is a bad fit after we have signed them on?
Why should we always do quality work?
Why should we always pull versus push a new offering?
How to think about the customer when making decisions?
A company is nothing without its customers. To solve their problems the best we can and to invent for them, to move them in the right direction is our first principle. Taking care of the customer may mean that we may not always benefit. That is okay. We don’t need to win all the time, we focus on helping our customers move in the right direction. We seek to understand our customers’ problems and solve them by first doing the work for them, we seek to invent for our customers the best we can. It is our customers that drive us forward.
Why are we customer first instead of competitor or product focused? While these other paths are valuable alternates they are not paths we seek because they don’t focus on what being customer first means. Customer first means innovation and building for them. Being competitor focused means a close follower, copying what a competitor does closely behind. A radical new invention can destroy a competitor focused company. Being product focused leads to solutions without actual problems. Product focus companies end up creating complex messes that no one can actually use in the real world. Both of these fail to understand the customer’s problems and are blind to what the customer wants.
Being customer first leads to figuring out what problems customers have and solving for those problems. It is inventing for the customer to understand what they are facing, and how we can make the world a bit better for them. From there it is a matter of figuring out how to scale the solution to others.
With this it follows that not every prospect is a good customer. If a customer prevents us from following our principles then they are not a customer that we should be engaging. However,
Always start by optimizing for the customer success even if it means doing things manually that don’t scale. Do the work to make them succeed. Do the work fast and to a high bar and always seek to understand how you could make it better for the customer. Take this input and optimize your workflow after the fact for the next customer, and the customer after that, and after that. If you are starting from the vantage point of product and making the product work for how you think a customer interaction should work it doesn’t work. You either overcomplicate it or you peg a customer into a hole that you don’t understand. The best way is to start with them, figure out their problem and what they are facing and from there work backwards to solve the problem in a more generalized fashion. Solve it like an inductive proof. Solve for one customer, and then move to solving for n.
Solve the problem for the customer then figure out how to create a process for it. The latter works much better because well you released something and worked on a problem and solved a problem as opposed to creating a process that may not actually hold true for super long. It creates complexity since you imagine you need to do something automatically that can be done manually. Solve it quickly by hand, then go back and optimize.
What does customer centric mean? One of the struggles I’ve had is that I always place my fun over solving people’s problems. This is exactly WRONG. I feel like I have to solve my problem first. Certain things in life that is true. But for business the most important thing to do regardless of anything else going on is to solve your customers problems. How can you improve their life? For a business there is no one whose problem you can solve faster than your customers. The happiness of the customer is paramount unless it is unethical or infringes on our team.
Solving a problem for a customer, you realize couple things:
- What is the friction they have in their life and what are trying to accomplish? How can we reduce the friction as fast as possible?
- What is the problem that they actually have? When we do a competitor or product focused approach we are guessing what people want. We want to understand how people actually work not how we think they ought to work.
- How can we solve this problem for other customers?
- How can we do the work to deliver something and then figure out how to make that process faster? The only way to do this is to ensure customer first focus.
We live in a world where people have accesss to everyone and everything. So the only thing that stands out is work that delivers. Deliver and delight our customers. If they are unhappy, we need to obsess over making them happy. If they don’t see from our vantage we need to pull them to our view. Nothing is as important.
What we do is ensure the customer is happy. From there we do the work that is more important for the customer. We delegate all work that is not helping us engage with our customers. This way our processes are building off customers as the first element of that equation. If we can help them we can build the tooling and process in reverse and figure out who to hire. If we start with product or competitor first we may be looking backwards instead of figuring out and hiring based on what the customer needs.
Finally, all sales and marketing needs to be from the vantage of helping the customer first. Seek to help them figure out everything else. What we can do is to solve people’s problems. Don’t worry if others copy you instead.
Frankly, customer first is hard. It requires building empathy and understanding where people are coming from. Understanding their backgrounds, where they want to go and what they want to accomplish. Everyone is a Hero in their journey and it is important for us to remember that we are supporting cast in the customer’s journey. We are there to help them accomplish their goals.
Pull Instead of Push
It can become too easy to build something that no one wants. Instead build the system that solves our customer’s problem. Using a pull system is to figure out what they need instead of building it and then figuring out if they need it. This is as opposed to the Push system when you build the product or service and figure out if the customer needs it. This method is usually a waste of time since you don’t know if it is a problem people have.
Instead, by using the Pull system you are reducing waste since you are building exactly what the customer needs and you are building things as the customer is requesting them. This JIT building also leads to less pain overtime because we are only building what we need and can focus on making our customers happier. This leads to less stress and overall we can improve over time without having to plan everything up front.
Being Customer First also means we will solve hard problems. The world is full of easy problems that need to be solved and those are great, but if we just solve the easy problems no one will be there to solve the hard problems. Being customer first means looking at problems from the point of view of the Barr problems customers want solved. There are a million people solving the easy problems. However, can you look at the customer and solve the hard problems?
A customer has hard problems. We have easy problems that we want the customer to have. However, if we listen to the customer and solve their hard problems, we’ll we should be able to solve the problems that matter.
It is ideal that you are the customer that has the problem but it should be that the problems that you want to solve shouldn’t be limited to you. What can you do that is bigger than yourself that isn’t limited to you? How can you bring this solution to other people? This is a big problem that needs to be really solved well.
Our customers are people who are doing good for the world and advancing humanity. We will help them advance their cause by being the shoulders on which they stand to make their Vision come true if it agrees with our Vision. Not everyone will benefit from our Vision and we cannot make everyone a customer so we must be okay with that.
Even if we don’t get a customer strive to ensure they are doing well. Help first! Make the human connection and understand them. Understand that the other person is a son or daughter of someone and that they have their own wants and needs. Try seeing from their point of view. Help first, before selling. Help first, before receiving anything in return. Make the other person happy and reduce their stress. Remember that is not the customer’s job to know, it is our job to teach them. We will teach the customer the right way to do things ad we will not be content if we find things that do not hold to our high standards of how things should be. We cannot move the world with fixing every single thing, but we must be willing to move and advance the good practices for the small part that we have control over if it helps the customer also advance.
Job to Be Done
Figure out the Job the Customer wants us to hire us for. Solve to do that job. Cut out everything else that doesn’t fill that goal.
Avoid Being Zero-Sum
We grow by expanding the pool, not by bringing others down. A company focused on fully optimizing its own profits will not survive in the long run because it will generally piss off the customers and partners. It is okay to not be optimal in profit taking so that a customer is a relationship over the long run. We seek to help others with this goal.