I just finished reading a provacative article written by Steve Denning titled What Killed Michael Porter's Monitor Group? The One Force That Really Matters. It is a long piece but definitely worth reading for anybody interested in business or strategy.
The basic premise of the article is that Porter's Five Forces Model for strategy is wrong. The model has been taught in every business school and has been accepted globally as gospel by most people so it is a pretty ballsy thing to come out and say that the legendary business guru is wrong and there is a better way to think about strategy.
Having read the article and spent some serious time thinking about it, I think Steve Denning might be right. My current experience at Weebly convinces me that he is on to something.
Denning basically says of Porter's model:
"In the theoretical landscape that Porter invented, all strategy worthy of the name involves avoiding competition and seeking out above-average profits protected by structural barriers. Strategy is all about figuring out how to secure excess profits without having to make a better product or deliver a better service."
He argues that radical innovation focused on delivering more and more value to the customer is what sustainable companies have done to stay ahead and to deliver above average profits over the longer term.
"Instead of seeing business as a matter of figuring out how to defeat one’s known rivals and protect oneself against competition through structural barriers, if a business is to survive, it must aim to add value to customers through continuous innovation and finding new ways of delighting its customers."
Having been at Weebly full time since June and having watched the founders build the company over the years, I believe Weebly is a real life example of a company that lives and breathes this approach every day. It absolutely works and I am a definitely a convert to this way of thinking about business strategy.
At Weebly, we don't worry about the bottom line. We worry about our customers and the bottom line will take care of itself. We want to deliver steadily more value to customers. That's the beauty of the strategy. It is simple to understand, it doesn't take months of data analytics to pick a direction and there is no need expensive strategy consultants. All it takes just a clear view of who drives our strategy and our business success... our customers.
For example, whenever we talk about building new features, we always come back to how it helps customers. When we build a feature, it is never finished until our customers try it and tell us they love it. We never say "now we need to build feature X because competitor Y has it". When we decide to send an email to our customers (which we rarely do since they don't often add value) we always make sure that the email is going to have a net benefit to the user and their Weebly experience. When we work with partners, we take the same approach. When we partner with other companies we do it is because we believe we can help them add value to their users or they add a lot of value to our customers.
This all sounds really simple. I am sure every company says that their customers are the most important thing and every feature or product line they introduce is meant to make lives easier. Trust me, it isn't easy. It is surprisingly easy to believe that everything is going to improve a customers life and when you can send a single email that drives a lot of new revenue it is even easier to "just send it" and fall into the getting revenue today trap. All these things send signals to customers and they all matter, every single one of them. Being able to say "no" matters and it is the things that you don't do that often make the difference when you think about strategy like this. That's probably the biggest lesson I have learned in my time at Weebly.
I am definitely a convert and I have Dave, Dan and Chris (Weebly founders) to thank for it. This isn't how I used to think about strategy at all and am really enjoying being part of a company that thinks this way. It is making me a better executive for sure. There is an amazing amount of clarity to be had when you take this approach. When making money isn't the immediate goal and the customer truly comes first, you can really focus on the things that matter. It isn't easy by any means and takes a lot of hard work but the benefits are worth it.
Recently I have had discussions with people getting into sales for the first time and they all seem to ask the same question: "What are the basic rules I should follow to be successful at sales". There are plenty of rules and no lack of information out there on this very subject but I like to focus on the four things I think are undervalued by most. Here are my most important rules:
Sales is not selling, it’s understanding.
This is the single most important rule. Read it carefully. To be a great salesperson you have to care about the problems you are solving. The best salespeople I know put themselves in the other person's shoes or go out of their way to experience the problem firsthand. That's how you really take an interest in solving that problem. When you really mean it, people on the other side can tell and will trust you to help them. Actively listen, ask questions and really dig in.
Love what you sell.
As a salesperson, you are an educator. It is hard to educate somebody and be really compelling unless you love what you are offering. Do you use your product? Are you passionate about your company? If you don’t like what you are selling or aren’t passionate about it, quit and go find something else.
Pick up the phone.
Cold calling, cold emailing or meeting people at a networking event are all hard things to do for most of us. It is difficult to put yourself out there, to meet people and strike up a conversation. Most people worry that they will immediately come off as a "salesperson", which just scares others away. Be yourself, just a regular person who wants to learn. Remember the first rule and being genuinely interested, it works for meeting new people. Be interested in people, focus on listening and really caring. You will be surprised how many great people you will meet and some of those people may even buy what you're selling.
Understand that your product isn't always best
This is a hard one for most people to believe, but sometimes your product isn't the right solution. If it isn't, then don't push for a sale. If your product solves their problem, then so be it and push hard for the sale. If it isn't then help them find the right solution even if it is a direct competitor. You will always win out long-term. Plus, there is no benefit to selling somebody something they don't need. You will end up with unhappy customers and a bad reputation. It isn't worth it.
Just read a good piece by Alex Taub on The Most Important Part Of A Product Integration Deal. The key takeaway that every person in business development should remember is:
If you are trying to get your service/product integrated into somebody else's product, then I 100% agree with Alex's view which is if you cannot get the proper placement, you should walk away from the deal. These things always end badly if you don't get it right. The results will be bad, the partnership won't last very long, both sides are unhappy, typically the consumer experience will also suck - all bad things and a waste of precious time and resources.
This advice also works for people who are on the receiving end. If you are going to integrate a 3rd party into your solution/service, you should also make sure that placement is perfect. I know the pressure is often to do a deal and give somebody an integration and call it quits. It is also easy to give your own internal features a preference or better placement. That's not good enough. If you are going to have somebody integrate into your product, you should focus on the consumer experience above everything else. First, make sure the product is valuable to your users, that the experience is fluid and simple and that they can find it. That's good for everybody involved.