In this podcast, I talk about company success and some of my experiences consulting for different companies. Read on to find out more.
In this article:
- Why Companies Fail
- Keys to a Successful Business
Hindrances and Keys to Company Success
Why Companies Fail
It’s interesting to think about company success — why some companies win and why some lose. Sometimes the reason why people actually lose is not because of the reasons they believe were the cause.
Certainly, the competition gets heavy and market conditions go up and down. Yet so much of the company’s ability to win or lose depends on them and their ability to turn their business into a machine.
You’ve got to get out of your own way to become a successful business.
As I observed the companies I worked with, I found several reasons why companies lose. Below is a breakdown of the main reasons why company failures happen:
1. They Don’t Know Who Their Target Market Is
Companies lose because they don’t know who they’re selling to. I know it sounds basic, but it’s not as simple as you think.
When we enumerate our target market, we use broad terms like, “I sell to the CIO.” or “I sell to the Head of Sales.” Those are nice, but you need to be more specific, more niche.
This is especially important when you’re starting out with a new product or a new venture. You should really know who you’re selling to.
Go as specific as, “I sell to the Head of Demand Gen.” or “I sell to the PR Head.” You can’t just roll up to the highest level. It’s too vague, and it doesn’t help you.
I’ve seen that happen too many times and it’s messy. It certainly doesn’t contribute to company success.
2. There Are Inefficiencies in the Process
The second thing I believe hold back companies is process inefficiencies. Most people know what their sales process looks like because they can pop it in their CRM.
You can have different stages, but those processes are a joke. Some people even argue on the timeline of each stage.
Yet very rarely has a company taken the time to go through an exercise to understand their pipeline from beginning to end. You really need to know your process and understand your stage gates to achieve company success.
3. They Overshoot Their Bounds
Another thing I’ve seen companies do wrong is they overshoot their bounds. They say that the investor pitch deck shouldn’t be the same as the customer pitch deck.
Most likely, the investor pitch deck is the big-picture vision — like where the company intends to be in five years. Yet when it comes to customers, you can’t always sell vapor.
You’ve got to find a way to know where the puck is going. You’d want to be ahead of the game.
Yet a lot of companies debut in the market and instead of being fancy and trying to be cutting-edge, they just take a simple concept and win with it.
I think companies who really understand exactly what they’re selling and don’t try to be too far ahead are the ones that win.
One good example is video communications providers. They came into a very crowded market and offered slightly different business ideas.
They didn’t say they were something crazy-fancy — they only said they were a video provider for communications, yet the end result is they grew like crazy.
This is a great story of focus, simplicity, and understanding who you are and who you are not.
4. SaaS Companies Are Sales-Led
I need to be careful with this one, so I say it delicately. If you’re in SaaS, you can’t be a sales-led company.
You can’t have sales run the show and dictate everything. I’ve been a salesperson for years, so I say that gently.
Ultimately, sales is the last room to turn out the lights, and it keeps the company going. But in today’s modern SaaS environment, you need to be product and marketing-led.
Companies with well-built products succeed because users like their products. We’re not in an age anymore where you can sell top-down and shove products down to force users — that needs to change.
I’m a believer in the modern SaaS economy. Find a way to make sure your product and marketing teams aren’t absolutely squashed by your sales team.
That basically means that sales shouldn’t dictate everything. Sales should design the roadmap because they’re selling what they want to sell.
Salespeople are never let go. They’d stick around because they get to do what they want if the product is good.
Keys to a Successful Business
There are also good practices that companies apply, which help them achieve company success. Here are two good practices that I’ve observed in the companies I worked with:
1. They Focus on Revenue
Companies that win have a pig-headed discipline and a myopic focus on revenue. Your company’s focus should be on revenue.
You’ll know you’re in a bad place when you don’t hit your target and employee retention is down and below an acceptable threshold. When you skim over those and start focusing on what you see, like the brand, awareness, or business cards, you’re out of your game.
If you’re going to pound the table, pound the table on revenue.
2. They Go with What Works
This may sound more obvious, but you have to go with what works. We all want to become big companies and move upstream, there’s no doubt about that.
Yet the truth is, not everybody can. Not everyone can become an enterprise.
The key is to be who you are and not try to fight it. I’ve heard way too many leaders say things like, “I don’t want to do that because it’s not sexy.”
Really? That’s the reason why you’re not going to do something? You don’t want to associate yourself with a certain product for that kind of reason?
What if that product is winning? What if that’s the product that’s selling and dominating the market?
You have to double down on what’s winning. If you don’t want to do that, go somewhere else.
I think that’s so important. Our biases can sometimes limit our potential for company success.
For instance, you settle for only $10 million deals. You might also refuse to sell to a niche market or you’re unwilling to go out of your comfort zone into a new market.
I’m not saying you have to kill innovation or stop testing new ideas. All I’m saying is that you ultimately have to go with what works.
Whatever product or market is working for you, double down there. It sounds like an obvious thing to do, but some companies don’t get out of their own way.
Get out of your own way and focus on what works.
If you want to experience company success, follow these essential do’s and don’ts. Avoid the practices that won’t benefit you in the long run so you don’t have to suffer the consequences.
The key is to actively and consistently apply best practices so you can achieve long term success in business.
What are the best and worst business practices you’ve learned based on experience? We’d love to hear from you in the comments section below!