Page 112 - 6 Secrets to Startup Success

The Pull of the Market 91

EXECUTE ON YOUR MARKET OPPORTUNITY

In his 1987 book, Moments of Truth, Jan Carlzon tells the story of how
he reinvigorated his ailing company, the Swedish Air Service (SAS),
by focusing his 20,000 employees on the customer experience. His
logic was straightforward: The airline served 10 million customers a
year. Each customer came into contact with approximately five SAS
employees during the year, and each contact lasted an average of 15
seconds. He wrote, “The SAS is ‘created’ 50 million times a year, 15
seconds at a time. These 50 million ‘moments of truth’ are the mo-
ments that ultimately determine whether SAS will succeed or fail as
a company.”11

More than twenty years later, this notion still cuts to the heart of
what makes any business viable and enduring. Carlzon was operating
a large service organization, but the idea that businesses are the sum
of their customers’ experiences perfectly applies to founders of seed-
stage startups, whether they are hawking websites, widgets, or ac-
counting services. The global economic crisis of 2008, and the fact
that it was caused by bubbles and run-ups largely empty of assumed
value, returned us even more squarely back to fundamentals. Under-
neath all the noise and clutter that can accompany your startup
process, it’s helpful to remember a simple truth: If you create enough
value for enough paying customers, much of your initial risk melts
away.

When your product or service is ready for prime time, here are
five guidelines for gaining an early edge in the marketplace.

1. Invest to acquire customers. By “invest,” I don’t mean spend
wads of cash, unless you’re a well-capitalized founder with a
clear-headed plan calling for that. I am suggesting that you
put other assets to use, including the most precious resources
available to you: your focus, time, and energy. Are you di-
recting these toward generating prospects, converting them
into paying customers, and stoking the sales engine to build
a longer-term revenue stream? Or are you hoping that cus-
tomers will flock to your better mousetrap simply because
of its magical, magnetic pull?

American Management Association • www.amanet.org