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New CEOs, startup founders, and sole proprietors are listening to this advice. all Time: Start of the day one task That makes the biggest difference. Ring the cash register. grow your business. If it’s clearly obvious what it is, then it’s all good – or it will be – one task teeth.
The truth is, to business newbies, it’s not at all obvious. A whole zoo of activities seems to stand between them and profit. Whether it’s building websites or creating instructional videos on Fiverr, it’s no surprise that they’re reaching for the most familiar activities.If they do enough small jobs, surely it must add up Something Over time, right? Wrong.
The new CEO should focus on the highest-margin tasks, the ones that really move the needle in the business. If it’s not clear what they are, today is your lucky day – I’ll tell you the life cycle of a business he breaks down into three phases. In each phase, you, as CEO, one job It’s worth most of your time. No hanging carrots or cliffhangers, just explaining exactly what that one job should be.
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Phase 1: Product Market Fit
My students are tired of me talking about “product-market fit”, but I tell them that, and there’s a reason for that. In the first phase of the business ($0 to $100,000 or even $1 million in sales, give or take), he devotes 90% of his time as CEO or founder of the business to validating product and market fit. have to spend.
If you’re selling a service, what is “product market fit” or “service market fit”? It’s a state that exists when you’re willing to do whatever it takes. How do you know when product-market fit has been achieved? You know you have Product-Market Fit when someone pulls out a credit card and asks for the privilege of buying something you offer.
This next part is hard for many of my students to take, but until I’m blue in the face, I highly recommend selling the product before they make it.. Without Product-Market Fit, your business will not exist. No earning potential.that is, any The effort you put into developing your product is a waste of time.
Don’t fall into that trap. Spend time instead checking for Product-Market Fit. Do what it takes to get in front of your target audience and market your product. If you buy now, let them know you’ll get first access when it’s ready in 30 days. If they agree, congratulations! If they disagree, ask for feedback. What problem can your product adapt to solve?
Validating product market fit is an ongoing, iterative process, even after you make your first sale. In Phase 1, you should spend 90% of your time improving your product, improving your target market, defining your niche, and making your product more market-fit.
Related: 3 Marketing Dos and Don’ts to Maximize Profits with a Bootstrapped Budget
Phase 2: Distribution
Once you’re confident that you’ve sharpened your Product/Market Fit to a razor-sharp turnover at roughly $100,000 to $3 million, you can begin Phase 2. Please note that the Product-Market Fit validation is not final.what are we talking about one task Takes up most of your time as CEO. Phase 2 reduces the time it takes to validate Product/Market Fit from 90% to 20%.What takes up the other 80% of your time? Distribution. Validating Product/Market Fit is important, but it’s not. Do your business until you finalize your distribution. The more you improve your distribution, the more profit you can make.
Take John D. Rockefeller’s Standard Oil Empire for example. He clashed with another industrial giant of his own, railroad tycoon Horace Vanderbilt. Vanderbilt, knowing that Rockefeller relied on railroads for oil distribution, decided to charge him an exorbitant price. Instead of acquiescing, Rockefeller took a loss and bankrupted Vanderbilt, driving down the railroad stock price until he could buy the railroad.He also crisscrossed the country on pipelines to transport oil without it railway.
As my students discovered, for modern businesses, distribution usually means some kind of customer acquisition funnel. As Phase 2 CEO, she should focus 80% of her time figuring out how to get $2 or more in revenue for every dollar he spends on customer acquisition. Google ads, Facebook ads, YouTube, direct mail, SEO, homing pigeons, or banners tied to the back of biplanes, it doesn’t matter. Earnings, game over, you win. If you can make $2 out of $1, you can grow your business.you can spend all dollar.
Related: Avoiding the Sea of Identity: How Hiring for Culture Improves DEI
Phase 3: Talent and Culture
Phase 3 may start with $3 million in sales, or it may cost $10 million or more. Once your distribution is ready, it’s up to you when and how to move to Phase 3. Phase 3 begins when 80% of his time as CEO shifts to developing people and culture within the organization. This phase continues as long as you are the CEO.you a bit While there is time to improve product-market fit and distribution, hiring, firing, and building culture occupy a large part of executive management’s attention.
Many entrepreneurs stall their businesses for fear of jumping into this stage. They try to operate as individual entrepreneurs — outsourcing, automating and staying in the trenches with busywork are not good uses of executive time. , you need to let go of that “ditch the trench” mentality and focus on building a motivated team that is united in line with your organization’s goals and committed to achieving them. With great talent and culture, you’ll be able to hand off tasks well and spend more time on talent and culture.
All three of these activities (market fit, distribution, culture and talent) are huge subjects worthy of a book. At least with this breakdown, you shouldn’t be confused about the most leveraged uses of your time. You always know where to focus as CEO, depending on the phase of your business.
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