Three things that hit the spot: An analysis of the Mike McDerment interview
If you missed Part One of Fireside Chats with Fiery Entrepreneurs™ with Mike McDerment, CEO, FreshBooks, you can read it here. There were a number of great topics that Mike touched upon during the interview. I thought it might be of value to you if I picked out a few points that resonated the most with me and explored them in more detail. Of course, I would love for you to share your thoughts about parts of the interview that you found most interesting. Please feel free to leave a comment. For now, though, here are my thoughts:
1. ‘You can’t take your customers literally. You need to listen to their pains and envision something that delivers what they need – not what they say they need. And that takes a bit of vision from time to time.’
Profound stuff. This only underscores the importance of being in constant contact with your customers – talking to them, putting yourself in their shoes and reflecting on their pains and needs with the sole intent of solving their problems and making them happy. The vision part, I believe, will follow naturally. I’ve seen several successful entrepreneurial companies simply lose touch with their market. And before they know it, they’re building products and services that nobody wants. This is a great lesson – costly mistakes can be avoided simply by keeping your customers close to you.
2. ‘I can’t overemphasize the importance of knowing how to craft your stories’
I love companies with great stories. To me, stories help make companies interesting. More importantly, stories can help build strong connections or bonds with customers and other stakeholders (employees, for example), which in turn can help build loyalty. In this particular case, Mike was primarily referring to crafting a story that helps communicate FreshBooks’ value and purpose to its customers.
But I’d like to take it a step further, and examine the concept of ‘stories’ in general. I’m always curious to learn about the various little stories that help build a company’s brand – how it began, it’s purpose, what problems it is trying to solve in the marketplace, how it innovates, what it does better than any other company, and so on and so forth. I don’t care too much about what the story’s about, just as long as there is one. Sadly, the majority of companies out there do not communicate their stories well enough. I believe every company out there has a story, but isn’t doing enough to communicate that unique story. It’s not easy to launch and build a company – there’s got to be a story in there somewhere.
Take McDonald’s, for instance. That’s a company that has a few great stories. My favourite is the one about the company’s early days. That a 50-something year old Ray Kroc, a milkshake machine salesman took over a small restaurant franchise and helped build it into what is now the world’s largest chain of quick service restaurants is an awe-inspiring story in itself. True, unless he’s a geek like me, the average Joe enjoying a Big Mac at McDonald’s may not have heard of Ray Kroc, rendering this story meaningless to him. But there’s a good chance he might’ve heard about some of McDonald’s other great stories, one of which involves its legendary fries and how consistent they taste across every restaurant in the chain. Every little story has the potential to make a big connection with your audience and drive loyalty.
I don’t believe it’s necessary to operate in a ‘sexy’ industry in order for your story to be interesting and to help you connect with your customers. Just look at FreshBooks. These guys admit they focus on ‘boring stuff’ (invoicing), but every little story about them tells us how passionate and committed they are about solving their customers’ invoicing pains. And their customers love that.
There are several companies I admire, and each of them has a terrific story that resonates with me, personally. My favourite story of all time? Apple. Enough said.
3. ‘Once you get started, throw the business plan out the window’
This is obviously what I didn’t want to hear, considering my company specializes in developing business plans that you could actually use to build your business once you get started. But then again, Mike was referring to the limited value of a traditional business plan after you get your business off the ground. On that point, I concur. Developing a traditional business plan is a terrific exercise to go through pre-launch, but these plans are not built as living, breathing tools that entrepreneurial companies can use post-launch. Besides, your business circumstances (i.e. market, industry, financial position, etc.) will sometimes change so fast that the business plan you wrote before launching the business may no longer be relevant after you launch.
My take on this? I’d say don’t throw your business plan out the window. Rather, change the way you develop your business plan. The vast majority of businesses don’t need elaborate business plans written in flowing prose (unless banks or investors require you to have one). In the end, it’s not about the business plan; rather, it’s about business planning. Make business planning a habitual process and develop an action-oriented business plan (one that you periodically refine), complete with goals, budgets, responsibilities and metrics – a plan that will serve as a tool that will help you and your team execute effectively and build a thriving, profitable company. That’s what I genuinely believe most entrepreneurial companies need.
