There is nothing like attending a business networking event such as a business after-hours or morning coffee session and encountering a “local business card distributor.” No, this is not a reference to someone who does delivers or that provides a brokerage service for a print or copy shop. This is an individual who spend her time during the entire networking function distributing her business cards, especially in an unsolicited manner. To actually observe this process is super intriguing. A more interesting activity though is attempting to ascertain whether or not an individual of this type actually desires to provide goods and services to each and every individual who is attending the particular networking event. A similar set of circumstances often arises when an entrepreneur is asked, “So, what is your preferential customer type?” The reply is often “anybody/everyone” but is this truly the case? Should a newly created Money Machine founder embrace each and every potential customer who darkens the doors of his business operations. Let’s just agree upon the following – doing so is a recipe for an entrepreneurial disaster of the highest order!!
This subject matter quickly becomes a point of contention for start-up founders who accept external funding, especially funding of an equity investment nature, far too early in the business development process. For some Money Machines, accepting equity funding at any time during the lifetime and existence of the particular business operations is considered far too early. 8^) The details of the source of this conflict all revert back to the circumstance that under the constraints of having received equity funding, the Money Machine founder has to become beholden to an individual or group of individuals who are not true customers of the Money Machine. Simply and straight forwardly stated, investors desire a return on their equity investment and are not often too patient with entrepreneurs who desire to be finicky about the type of customer to whom their Money Machine provides its goods and services. Some investor types may actually move to have this type of Money Machine founder committed to a mental institution but here at the “Musings…” we have elaborated on this topic before, some may say somewhat too extensively here and here. This is why bootstapping a Money Machine’s existence, especially during its early days, is stupidly crucial.
The other side of this particular coin is the fact that there is nothing quite like having the phone ring or the email inbox receive a new correspondence and once the caller id or the “from” field is recognized the stomach of the founder begins to turn in knots and her head miraculous begins to feel pain. This is often the result of a Money Machine founder taking on and providing products and services for someone or some organization/entity that is not his “ideal” customer. Please keep in mind that choosing the right/wrong customer is much more that offering a product or service to someone who may or may not have a need for either. It is also about the Money Machine founders having a filtering system in place that allows them to interview the potential customer is such a manner that before taking them on as a customer the founders has ascertained that they share the same vision, goals and path to the desired results of that of the potential customer who is attempting to engage with the Money Machine’s product or service. This is why Money Machines are heavily dependent upon the science of the Lean Start-Up business development methodology and it is within this confine that one is quickly introduced and heavily relies upon the process of customer discovery and customer development while simultaneously measuring the experience that the user/customer is having throughout the life cycle of having engaged with the Money Machine and its goods/services.
Now you may be saying, this all sounds great but how in the devil is a start-up founder suppose to begin this process? I am glad that you asked. Believe it or not it all starts between the ears of the Money Machine founder when she asks the proverbial question, “What is my meaning and why in the world am I even contemplating creating and founding a Money Machine?” Some would argue that this is possibly the most difficult question that an start-up founder will every have to answer. Fortunately there are some superly cool social scientists out in the world like a crew out of the Austin, TX area who have begun assisting start-up founders and prospective entrepreneurs with addressing this very question. The Austin group’s virtual presence can be found here. For the far left brained technical types this particular type science and respective training exercises can be the source of a series of excruciating painful engagements but the research has shown and is continuing to show that this type of professional development is time well spent.
Some of the readers of the “Musings…” are now beginning to understand how the added pressure of answering to an angel investment/venture/debt funding groups too early in the Money Machine creation and entrepreneurial development process can seriously affect and hamper the greatest type of learning that needs to occur, namely, the Money Machine founder and creator learning about himself. But a couple of questions still remain, inquiries such as,
- How in the world does a Money Machine survive while its being superly scrupulous about the characteristics of its customers?
- What is the methodology that founders need to utilize to vet out these precious customers among the vast number of potential clients?
These and other items will be addressed in a future installment of the “Musings…”
BTW, if there is an interest in following the mmhacker saga via twitter please feel free to subscribe to @mmhackerU.
Until next time…