The Untold Secret to Business Success
Define your business by what you’ll become, not by what people expect.
I see many founders today often try to compare their new startup to other well known companies. For example, it’s common to hear “my company is the Uber of X.”
Familiar comparisons are terribly tempting, but it’s critical business owners define their own path. For customers and investors to embrace your new idea, you may need them to re-imagine the product or service entirely and challenge their preconceived notions.
You won’t always have control over the narrative of defining your brand, nor to whom you’re compared. That’s why it’s so important to do this thoughtful work at the very beginning. If you add to your business or change your direction of growth, it becomes very difficult to change what people expect from you.
Start by deciding what you want your business to be.
Even 10 years after we launched Kabbage, lots of stakeholders still define us solely as a lending platform. But that’s not where we see the business growing. To challenge their expectations, we’re building new solutions that redirect their perception of us from a company helping small businesses access capital, to helping small businesses manage their cash flow. Each time we launch a new product, we bump up against similar long-held perceptions.
Some people still think we exclusively serve eBay sellers, even though it’s been years since that was our primary business. As our offerings expand, commenters are beginning to make comparisons to Square and PayPal, proving we are successfully challenging those assumptions.
Elon Musk manages his brand definition especially well. He says Tesla is an energy company, not a car company. That invites outsiders to think of the cars’ distinguishing feature–a high-capacity, rechargeable battery–instead of comparing Teslas to typical car brands.
Grab, one of the few companies that might be justified in calling itself “the Uber of Southeast Asia,” says food and financial services make up 50 percent of their gross merchandise volume, and has better margins than ride hailing. They’re re-imagining what customers need, and are providing it.
This kind of challenging of expectations isn’t just for tech companies and national brands – it’s vital for every small business as well.
Imagine, for example, an interior designer in middle America. Most of the potential customers use “interior designer” and “decorator” interchangeably, and don’t really understand the additional skills and training that the designer brings to the table. To compete effectively, the interior designer will have to define themselves as someone with construction knowledge and the ability to define a space’s functionality. Designers have as much in common with architects as with decorators, but most clients won’t know that. Failure to define–or correct wrong assumptions about–their role will lead to a lot of unsatisfying upholstery selection and not much chance to distinguish themselves and add value.
The same goes for a large-scale business. Look at Apple and their evolution from the Macintosh to the iPhone. We were all impressed with the slim design, touch screen and promise of accessing greater computing power from the device in our pocket than our desktops. Now I do most of my work on one. Apple did a great job of re-positioning from a computer company to a device company and never letting a single product define them. Now with Apple TV+, Apple Music and Apple Card, they continue to expand their definition from a device company to one where we increasingly interact and live our lives.
One last piece of advice: the things that are most important to you about distinguishing your business might have to be re-framed for customers. When I was in college, I worked at The Gap. They encouraged us to learn the features of the clothes, but to speak to the customers in terms of benefits and experiences. Denim is made of pre-shrunk cotton, but no one cares. What people needed to hear is that the jeans were soft, machine washable, and conform to your shape when you wear them.
Figure out what your most loyal customers rave about (you might be surprised) then drop the jargon that doesn’t convey that feeling. It’s okay for you to know that it’s the White Lily flour in your biscuits or the pre-shrunk cotton in your jeans that make them so special, but you’re not competing for customers based on ingredients–just end-user experience.
Kathryn Petralia is the president and co-founder of Kabbage Inc., a financial services, data, and technology platform that helps small businesses manage cash flow. Kathryn is a seasoned leader in financial services with more than 20 years of experience across credit, payments, and lending. Recognized as one of the 100 Most Powerful Women in the World by Forbes, Kathryn helps lead Kabbage to simplify the way small businesses access the capital and services they need to build lasting businesses. www.kabbage.comFollow on:
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