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Luck Factor

Reaching maximum success in any business requires an element of luck. Luck can come in many forms, each can be beneficial as you analyze the strengths and weaknesses of the current organization and related business plans. It is often true you create your own luck through pursuit of excellence in the right way, so being 'born' lucky is not the essence of the message that follows.

The following explores different elements of a “luck” factor, each one meriting analysis. In many cases you are looking to determine if the current team, product or operational activities are capable of adapting to the changing needs of the business -- if yes, consider yourself lucky, if not, manage the changes well as they can undermine your pursuit of excellence:

  1. Does your company have the right team to achieve its business strategy?

    It is not easy to build a team that automatically can execute the chosen business strategy. The strategy should be defined first, after which the team is mapped into it. The “luck” factor can come into play in a big way when a business is in transition, say from services to product, or when the market around you is changing. Does the current team have the experience and talent to deal with a changing strategy? If yes, pass go and collect more than $200. Otherwise, some serious changes need to be made which can impact the ability to achieve the strategy in the time frames set out.

    Common weaknesses in early stage teams include lifecycle product management, product marketing, overall sales management and a business-oriented infrastructure. It is uncommon for a team to be able to survive the various dynamics of a growing business without some fundamental changes -- those that can, execute more rapidly and better integrate the changes as they occur. Those teams that require revamping from time to time create internal disruption and dragging down the ability to innovate at a fast pace.

  2. Do the correct technical skills exist to deliver what the market needs?

    Recruiting, training, planning, developing new products, etc all takes time. That time is often not available when pursuing a specific market window. As a company transitions from its original technical foundation into a product-oriented company, there may be huge gaps in its product offering between what it has and what is needed. Strategic planning is one of the most important things a company does as it is ultimately necessary to have as long a range view of where you want to go as possible – you need to give time for the “production” side of the organization to create what is needed to be successful.

    New marketing plans can be developed over-night, product branding can be established in a few weeks, alliances can be built in a few months, but whole products take person-years of effort. If the technical skills are not available now to do what is needed for tomorrow, the time taken to fill the gaps will rapidly chew into the opportunity to be successful.

    Startup's are often fortunate enough to have a highly technical team able to take on the challenges put forth in getting the first pieces of product to market (implement proof-of-concept for the first innovation). The luck factor comes into play when you challenge the team to complete the product mission, which often requries a level of success experience that most developers do not have (e.g. most products are not successful). The missing pieces include product management skills, sound architecture, scalability, robust packaging, etc. Companies need to know what it should be building now for selling two or three years from now and have the organization (and financing) to make it happen.

  3. Is the market ready for what you have to offer?

    Many businesses fail by pursuing a market that does not exist or does not grow in an expected way.. Although there is always someone out there who can be found to buy atleast one copy of any software product created – a long-term business strategy can't be built around it. For companies that focus on several lines of business, each one needs to be analyzed individually. The following kinds of questions are good ones to ask yourself and your organization::

    • Does the market have an established sector? Unless you are a trendsetter (which is actually really hard to achieve), you need to fit into an established sector in order to be properly recognized and differentiatied as a participant..
    • Does the market have an obvious lifecycle? What will the market look like in a few years? Is there the concept of early adopters, mainstream and laggards? The best markets to enter are the ones where the bigger players enter as the market matures? If there is no chance bigger players will enter than it is likely the target market is actually part of some other market and will disappear at some point in the future as the smaller one merges in with the bigger one.
    • Are there customers looking for what you are selling? If so, then the market is already pre-conditioned to buy. Competitive strategies can be worked out, alliances established and product lifecycle planning can take place.
    • Can you establish a level of differentiation? Especially important when leadership is part of the business strategy. What makes your company different than its competitors? Are these differentiations sustainable or will the competition easily be able to catch up or copy them? What is being done to sustain or develop new levels of differentiation?

    Is it clear that markets exist for the major line of business (or businesses) you are considering? If so, it can be a cornerstone of a confident business strategy? The market may be ready for your innovation, but will you have any experience operating within the next stages of market growth? This would drive both team development and your ability to guide the strategy through the stages.

    The above issues are handled well if you can put in place an Innovation Program so that the company does not mistakenly go after additional businesses for which a market does not exist.

  4. Is the company financially able to support entering new markets?

    You don’t want to have to devote substantive management team time to secure on-going financing. Management time is needed to make key strategic business decisions and assist in managing key partnerships. All business plans should address course correction contingencies, which will typically mean surviving less-than-expected revenues during a period of high growth goals.

    Some companies have interesting dynamics to deal with, such as having many employees as shareholders. This can create too much pressure to watch each dollar that is spent. A side affect is a disproportionate amount of justification is required to make each strategic move – something that would not garner so much microanalysis if the employees were not offered so much involvement. The market passes you by given the pace of innovation is slower and the ability to make 'risky' moves keeps maximum excellence from being achieved.

The “luck” factor is really about all of the above and more coming together in a single business venture. Hitting the market window, with the correct products with the right amount of financing, all managed by an appropriate experienced team is the ideal position to be in. Given that few businesses are that “lucky”, it helps to be disproportionately strong in one or more of the above areas to compensate for weaknesses in others. Exceptional financing can allow a company to buy market share, seasoned sales and marketing staff can carry a customer base until the products catch up to what is needed, and expert technical teams can help clients solve problems no one else can. Any strength area can compensate for weaknesses in other areas.

As a company grows out of the first stages of startup, the following are suggested to help create a suitable balance between the above “luck” points:

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