The following is a guest post by ChopDawg.com, an award-winning app development company that has worked with over 180+ startups and companies from all around the globe, helping them bring their web apps, mobile apps, wearable apps and software ideas to life.
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What is the biggest contributor to why most companies fail?
I’ll give you a hint. It has nothing to do with leadership, employees, the market changing, or those stereotypical excuses that you’ll hear from your former colleagues or friends.
Give up? It’s easy.
The biggest contributor to why most companies fail is because they weren’t able to provide value in a way that their customers were willing to open their wallets.
Sometimes it can be that the company overpriced themselves for the value that they provide. Sometimes the reasoning can be that the company was trying to solve a problem that just didn’t need to be solved.
Here is a big one, though. What about existing companies that have succeeded, but lost their customer base? What causes that?
Simple explanation again. They fail to adapt. The market changes and instead of making sure that their company continues to survive in that new kind of climate, they choose to double down and they die.
Need examples? Let’s name a few.
All of these examples above share one common theme, and one common warning sign for any CEO, executive team, product team, and especially founders in a company… you can’t be romantic about how you make your money.
You need to understand that the market climate that you’re in today won’t always exist. The best companies, the most dominant ones that have been a leader in their industry for years, understand that more than most. A great example is Apple introducing the iPhone while the iPod was the leader in its respective market. They cannibalized their own product line to stay relevant and to increase market share and profitability.
Another great example is Facebook. Instead of losing the attention of its users to similar platforms like MySpace and Friendster of the past, they continue to buy out major digital properties and make it complementary to their platform. Think about what they have acquired and where they have pivoted. Instagram. WhatsApp. Oculus. Facebook’s product line is just as relevant as ever, making just as much revenue as ever.
One of the common threads about our enterprise clients here at Chop Dawg is that they behave in the exact same manner.
One of our clients is one of the largest paint and ink manufacturers in the world. They fully comprehend how important it is to ensure they are always innovating their distribution process, while at the same time, keeping their operational costs as low as possible to translate value to their customers. What was the solution?
Completely digitize their business operations.
Ordering process. Customer relationships. Sales management. Employee scheduling and check-ins. Start storing every single piece of data and the way they interact with one another to know when to purchase certain inventory items at certain times of the year for the best price. When to have more employees on payroll at the busier peak times of the year. Understanding when to push certain orders to customers for their own profit margins or for the best savings. A way for them to cut back on their operational headaches and provide their upper management with real-time data at a fraction of the time.
Another great enterprise example is a prospect of ours that runs a multi-million dollar babysitting company.
Instead of letting the on-demand marketplace of the future come in and steal her existing clientele and future attractability, she decided she wanted to be the first major player in the market using real-time, easy booking to find babysitters and customers. She realized that while fully digesting this change, she needs to take one step back as a company to take ten steps forward.
On paper, this all makes sense, so why do most companies fail to act when it comes to making such a decision to stay relevant and growing for the long term? Simple explanation. Outside of being romantic about how they make money, they more regrettably fear that their decision won’t work out.
Here is the thing. Calculated investments are not the same thing as gambling in a casino.
The playbook for tomorrow already exists for all companies out there. We understand the consumer better than ever before. We have more data than ever before. We know in our guts how technology can solve problems better than before. We can’t be afraid to invest now, knowing that it will build a bigger tomorrow, a better company and a more impactful product for our customers.
Let this article be a reminder to all the companies that read this. Always be asking yourselves, how you can improve your company? How you can improve your product? How you can improve your operations? How you can improve your customer’s experience? Every day that you aren’t asking yourself these important questions, it is another day that passes until your inevitable death. It is another day that passes until your company ends up like the Blockbuster’s, MySpace’s, Blackberry’s of the past. It’s not too late to start investing in what is most important today to have a bigger, brighter and more profitable future.