A Job Description for the Business Owner - стр. 15

If you read the mission statements of different companies and analyze their operations, you will find that every strong business has a distinct purpose. Very often, that purpose involves some know-how. To John D. Rockefeller, the purpose was merging small oil-producing and refining companies through stock purchases in exchange for shares in the merged Standard Oil Company. This purpose very quickly led to his control of the entire industry. Moreover, he gained total control of the transportation of oil from the wellhead to the refinery and distribution beyond, thereby enabling himself to set prices that forced producers either to be absorbed by Standard Oil or to go out of business.

While highly successful in this goal, his monopoly of the process from production through transport and refining to retail sale led to the antitrust breakup of Standard Oil. Note that there are no absolute decisions, one being the best over all others. Any purpose is successful to some degree, and to some degree it creates a weakness. For example, Steve Jobs’s refusal to sell licenses for Apple’s operating system resulted in Microsoft’s complete domination of the operating systems market. Every personal computer manufacturer used the Windows operating system and more than a few software developers produced versions compatible only with the Microsoft system. On the other hand, this same purpose by Apple helped create the most convenient computer platform, which is just a pleasure to work with. Those who have used Apple computers do not usually switch to Windows unless they are forced to by some specific circumstance. The almost cultlike loyalty of Apple computer users provided a critical base of early adopters of the iPod, the iPod touch, and all the subsequent products—users who spread word-of-mouth testimony and enthusiasm that supercharged Apple’s launches and incredible growth in unit sales (at premium prices).

When formulating purposes, it is important to take three things into consideration. First, there are products (merchandise or services) that potential customers are ready to pay for, and there are those for which they are not. For example, what can be more important than preschool education for children? Whether a child will be creative, whether he will want to learn and apply his knowledge, and what his values will be all fully depend upon the way he is treated during his preschool years. Essentially, his future, the future of those around him, and that of all mankind will be determined during this time. You would think providing preschool education would be a priceless service, right? But the truth is, for some strange reason many people believe that anyone can take care of children, and therefore they do not like to pay for it. The idea of paying a thousand dollars a month for a child’s preschool seems crazy to some parents, even when that parent is driving an eighty thousand dollars car! There is nothing rational about it. In five years, that piece of metal will not be worth even half of what it cost, and eventually it will fall apart completely. But try to open a kindergarten where kids are taken care of by caring and highly qualified professionals and charge a reasonable price, and you will see that a purpose like this is difficult to bring to life. By the way, start-ups with uncommon purposes very often fail not because they don’t benefit the consumer, but because their purposes are too complicated for most of their potential customers to understand and recognize their benefits. Tremendous effort is required to convey the benefits to them, which is not an easy job for a small company.