By David Kirk, Bailador Co-Founder
Let’s start by being crystal clear what we mean by ‘resolution’. A resolution is not an idea or a proposal or a maybe-I-will or a that’s-a-good idea-I’ll-think-about-it. A resolution is what you definitely intend to do. People make lots of resolutions at New Year — drink less, lose weight, go to the gym more, do the dishes occasionally — and good on them for trying, but, as we know, hardly anyone lives up to their New Year resolutions. But you have to. Because if you don’t, you may not be around in a year, or you may have missed your market opportunity, or you may have lost growth momentum, or you may still be struggling with an under-capitalised business with a big market opportunity and no quality team to help you succeed.
So, choose a small number of New Year resolutions and work your butt off to make them happen. Your first New Year resolution should be to put in place a performance review process to make sure you achieve your New Year resolutions.
Your business is complicated, right? And there are so many things you need to do to get to where you need to be, right? And you are crucial to making everything happen, right? Well, actually no. The key to great leadership and performance is to understand the simple essence of what your organisation needs to focus on, to communicate that simplicity clearly to everyone and to relentlessly do it. Of course, you need to be alert to competitive and market changes and not everything will go to plan. You will have to adapt to new information, but if you cannot get your head around the simple essence of your business and align everyone to that essence you won’t know how to respond to the new information anyway.
The simple essence of all businesses is answered by two questions. First, why will people or companies pay for the product or service I provide? Similar questions are what problem am I solving? or what benefit am I providing to my customers? or the fancier, what is my CVP? The second question is, what are the economics of providing my product or service and how do those economics change as my business grows?
If you don’t have very clear answers to these questions your second New Year resolution should be to get them. And if your CVP is only so-so and your unit economics are not good enough and don’t improve as you scale (adjusting for step changes in costs as you hire) your third New Year resolution is to focus on product and market fit to deliver a stronger CVP and to focus on pricing, channels, and go-to-market costs to deliver stronger unit economics.
For bigger, more established businesses growing well, the essence of the business is the same (CVP and economics) but your resolutions should be to develop new and better products for current and related markets to expand total addressable market and to improve unit economics as you do so.
And finally, every New Year you should resolve to stay healthy, get enough sleep and make sure you have someone to talk to about your business challenges, worries and hard decisions. There are plenty of people who will be happy to help. Just ask.
Next week I will talk about New Year resolutions for investors in tech.